Investing in real estate is a process that is prone to many challenges at every step. You need to overcome these challenges to succeed. Below I have listed eight primary challenges that I have personally experienced in the last few years.
- Finding properties with justifiable risk-reward profile is extremely difficult. This is due to increased competition, improved housing market, and substantial improvements in the economy since the financial crises of a few years ago.
- Coming up with a realistic, unbiased, and professional assessment of a property to invest on is absolutely critical for success, yet, most assessments are not realistic, are biased, or are inaccurate (in time, budget, sell price, etc.)
- Real estate investing has become very competitive resulting in higher risk and/or lower reward investments.
- The cost of real estate transactions is (unjustifiably) too high. This factor alone could become the sole deciding factor in making or breaking an investment.
- Real estate investments often need financing (not everyone has enough cash to fund the investment on their own.) So there is often a need for financing. However, traditional approaches to financing result in realizing (often substantially) lower returns on the investments.
- Time-to-market is another important success factor. A renovation project that takes too long adds to the holding cost; which in turn results in a lower return on the investment.
- Tons of rules and regulations (local, state, and federal), many of which I am in favor of, can substantially change direction of a project. They could play a big role before and after committing to an investment. Therefore, you must be well aware of them.
- Planning, budgeting, and sticking to both are not optional! A set of tools to plan and budget and the discipline to use them is essential.
Renobits is designed to address these challenges and to make you a disciplined real estate investor. One that is successful! It is designed by investors for investors. And it is evolving every day.
Investing in real estate is a business and you should treat it as such! Even if you do not plan to make investing in real estate your full-time job, you should still treat it as if you were running a business. A successful business is able to bring all the necessary resources together at the right time, to the right place, and with the right cost to produce and deliver its goods and/or services. Failing to deliver on any of these results in sub-optimal business performance which in extreme, but not rare, cases bankrupts the business.N. Kazemi, Renobits Founder