Like most things in life, real estate investing is not without its challenges. From finding available and affordable funding options to evaluating the right deals, there are a wealth of challenges that all real estate investors face at one time or another.
Whether you’re just getting started or have years of experience under your belt, here are three of the biggest challenges, and our suggestions for fixing them:
#1. Evaluating and Vetting the Deal
Especially when you’re first starting out as a real estate investor, it can be hard to spot the right deal. And, once you think you’ve found the right one, how do you ensure you’re making the right decision? This challenge has always been there —whether in real estate, stocks, or any other investment.
In today’s market, there are a number of emerging platforms that connect real estate investors with potential deals —many of which have a rigorous pre-vetting process before the deal can ever be made available on the platform. While this certainly helps to mitigate this challenge, there will always be some work involved in making sure you’re doing your research and due diligence —to feel comfortable moving forward.
#2. Qualifying for a Bank Loan
Even though we’re seeing some of the lowest rates in decades, many individuals are having a hard time qualifying for a traditional bank loan. This is especially true for entrepreneurs and the self-employed. While there’s no quick fix for this challenge, there are some options for real estate investors who need alternative financing.
Borrowing from a private lender has always been the default solution here, but if the real estate investor lacked the networking skills and personal connections, finding a private lender could be quite challenging. With advances in technology, real estate lending platforms like Patch of Land can now connect qualified investors (private money lenders) with real estate investors who need funding for their projects. It’s a win-win for all involved.
#3. Marketing, Managing and Maintaining the Property
You’ve found the right deal, secured funding and closed the deal —now it’s time to market, manage and maintain the property. Who’s going to do that? This is particularly challenging for those real estate investors who work deals outside of their geographic location.
Of course, the solution here is to hire a property manager, do it yourself, or create a team who can help you. Each has their own positives and negatives. What’s important is that you have a plan on how you will take care of the daily needs of the property and its tenants.
Taking the Next Step
Whether you’ve new to real estate or are a seasoned investor, check out the options available to you on Patch of Land. We take the challenge out of real estate lending and investing.