When first starting out, the novice real estate investor discovers the process is a little mind-boggling at first. From the outside looking in, investing in real estate seems rather elementary.

Find a property for a good price then sell it for more after applying a little TLC. Yet when the rubber truly meets the road a tidal wave of questions arise. Which property? How much to offer? What should I fix and what should I leave alone? Yes, cable TV shows make flipping real estate seem rather easy but in reality it can be a rather complicated project.

Finding a prospect is of course the first step, so how do real estate investors do that? What methods are used? The fact is that real estate investors choose a variety of methods and most stick to one or two and fine tune them. Practice does make perfect and investors tend to specialize in a specific group of property types. Some like condos, some like to work directly with a bank’s REO department while others find property owners who are facing a possible foreclosure.

Once a property is identified, what’s the best offer? When investors decide how much to pay for a particular property they typically source the talents of a professional real estate agent who can provide property comparisons for homes in the subject’s immediate area. The agent helps hone an offer price as well as determine how much the home will sell once repairs have been completed.  As well, a general contractor needs to visit the property to see what needs to be fixed and what might need nothing more than a little elbow grease.

If the property is to be financed and is in relatively poor shape, a bank might balk at providing a loan. In this circumstance, the investor seeks funds from a private investor who will lend enough money to buy the property as well as issue enough funds to make any needed repairs.

The entire process is rather complicated but you must notice the common thread throughout the process: the real estate investor takes advantage of the experience of others. Doing so takes away the anxiety. Your first step when investing in real estate? Don’t do it alone.