Real estate investment, who you know not what you know

While the real estate market has been by far and away the largest investment arena in the world for many years it has benefited enormously of late from the ongoing popularity of the Internet. This has allowed relatively inexperienced real estate investors to look at markets overseas which they would normally never have contemplated. As a consequence very often we see real estate investors moving like packs from market to market trying to make a turn and benefit from the latest hotspot.

Even though your knowledge of real estate investment, how the mechanics move and how the finances work will assist you in making money, in many ways it is who you know not what you know. So what do we mean by this observation?

Timing is crucial

Real estate investments come online every second of every day and very often the “value deals” are closed before the for-sale sign is up. Therefore, if you are looking for a serious career in real estate investment not only do you need to understand finance, how markets move, etc but you also need to build up an array of contacts which you can use in the future.

Quote from PropertyForum.com : “Can we trust governments to look after real estate markets?“

It is essential to have long-term arrangements with real estate agents and others who will see property cross their desks every day. It is all good and well real estate agents approaching you out of the blue with a “great deal” but by the time you check them out and see what they have done in the past the deal could be gone. That’s not to say you should trust all of your contacts with “blind faith” but the more contacts you have and the greater the trust factor the more great value deals you will be offered.

Investing overseas

One thing which is becoming more and more apparent is that while many less experienced real estate investors can spot good markets overseas and potential for future growth it can be very difficult to manoeuvre through the mechanics of an overseas purchase. One way to at least lessen the risk and hopefully lessen the timescale for an overseas transaction is to deal with international real estate agents with whom you have a long-term relationship. The fact is that if you have a strong relationship with someone in the UK and a property became available in for example Spain, they would be unlikely to risk this long-term relationship with a dubious deal through their Spanish division.

There are ways and means of arranging your overseas investment over the Internet, there are ways and means of cutting out the middle people but the fact is that any astute real estate investor will use third parties to gather information on deals which they do not have ready access to. Even the best investors will approach third parties for advice, data and statistics and while they will make up their own minds, there is nothing wrong with having a number of different views. At the end of the day, if we all had the same view then there would not be a liquid real estate market.