There are several shows on television that feature people buying properties and then flipping them after minor repairs. Many people make a profit doing this, but if you really pay attention, you will often only see what the house could make the owners. The shows often leave out when and for how much the home sold for. RealSuccess will teach our students to break it down systematically and ensure the numbers add up for the right deal.

Many of the richest people in the world started out in real estate. That’s why real estate investment is so popular. There are some essential things you should know (as an investor)  before jumping into your first deal.

1. Know how market timing works.

You should research how market cycles work and also sit back and watch them for yourself. The fact is, markets go up and markets go down. A lot of successful investors aren’t looking for a three-month buy and flip. They buy when the market is low and sell when it is high

2. Know how to analyze real estate numbers.

You have to be able to identify all of the factors that are affecting your profit.

There are four major parts of real estate investing: cash flow, appreciation, loan reduction, and tax benefits. You need to understand how the four factors work together to produce a rate of return. Real estate isn’t simply making a profit when the property appreciates or losing money when it depreciates.

3. Know the economics in your area.

You have to look beyond the simple growth of the neighborhood. You’re investing in the overall health of the city, state, and country. For example, if interest rates are rising, you need to understand that borrowers are being cut out of the market.

The six aspects of the economics you must understand are mortgage interest rates, affordability indices, supply and demand, demographic information, commercial real estate, and the job market.

It helps potential investors to take classes in both macro and microeconomics. Macro will help the investor understand the large forces that impact real estate, such as recessions, national interest rates, war, and demographics. Micro will look at individual sectors and focus on the local real estate market, such as local disasters, local recessions, unemployment rates, supply and demand, new housing developments, homes for sale, and types of vacancies.

There is a lot that you need to know before you jump into being a real estate investor. Yes, if you are just buying, fixing up, and selling one house, you have the potential to make money. But, if you plan to do this as an investment, you need to obtain the necessary education. Otherwise, you’re gambling with your money.

Real estate, no matter where you make it a career, will always be challenging and fulfilling because nothing is ever the same. Every deal has its own life. Every buyer is different, as is every seller. You never get bored. It’s a people business and people are different. This makes it even more challenging to succeed—unless you manage your career as you would a business. Educating and training will help you get there. It’s easy to explain why training and education are important. It’s up to you to take advantage of the resources available to you and do the work.