#3 - Do Your Homework!

On every investment that you make, you should do your homework, or in other words, know your project. Get all the necessary information about the project which include its location, developer and all the details about the property you are investing on. If possible, make a visit to the site as well. Remember that the price of an airline ticket is cheap compared to the size of your investment and you can pick up so much more information by putting your “boots on the ground” as well.

Since you are investing in a preconstruction project, you may want to check out other existing projects from the developer to see the kind of quality their properties have. It is also important to know if they are reliable and if your money is safe with them. A couple more things you need to know are: When will the building construction start? And how long should you expect the property to finish?

There may be a lot of things that need to be researched about the project but it is necessary that you have the right information so you will have a great feeling about the project right from the very start.

#4 - Create a Team of Experts

Every successful business person will tell you to surround yourself with experts. The same holds true in Real Estate. As a real estate investor, you should gather up a team of experts who will be able to give you good advice and suggestions on every investment that you make, tell you which is a good investment and which is not (and why), and be able to provide some help in such cases where an investment fails. You can also turn to these people if you have questions or if you need advice in areas where you feel you need a little more help on such as financial or legal aspects of investing.

How do you find your team? Start off with recommendations from fellow investors. Contact them, interview them, etc. It may a bit of time to complete and round out your team, but it is definitely worth the effort!

#5 - Knowledge is Everything

Ask! Ask! Ask! There is no harm in asking questions. If after reviewing all the materials and information that you gathered on a project, you still have some questions in mind, go ahead and ask. Being the investor, you are entitled to have the answers to all your questions. You may start with the source of the information you initially received, whether it is an agent or the developer themselves. They may be able to make everything clear for you, especially on project specific questions. If after consulting them again you feel that there are still some gray areas, feel free to ask your team of experts. They most likely have the answers to the things that you are looking for.

#6 - Know Your Financial Strength

No one else knows your specific financial situation better than you do! An exception to this might be your accountant or a financial advisor, if you have any. It is recommended that you personally assess your current financial situation if it can make you qualified for the project before going too far down the road. Perhaps you already have a bunch of properties and are tapped out? Whatever the reason, check it out. This can save you (and others) a lot of time if properly done up front.

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