Published by Forbes.com | January 9, 2025
You can shift from being a real estate service provider to an investor, but you’ll want to make sure you’re prepared and ready to take the leap.
If you’re working in real estate as a broker, analyst, or property manager, you might be thinking about becoming an investor. When carrying out multiple roles, you’ll want to think about the pros and cons related to your options. In some cases, you may want to do both, such as being a service provider and also investing.
Before making the shift, you’ll want to make sure you’re prepared and are ready to take the leap.
Follow these steps if you’re in the real estate industry and are considering becoming an investor.
Build on Professional Expertise
One of the greatest advantages of transitioning from professional to investor is the wealth of industry knowledge you already possess. As a real estate professional, you are likely aware of market trends and recent transaction data. The firsthand experience you have can be used toward evaluating your own deal. You might be able to identify opportunities that others could overlook.
Start Small
You might think about acquiring a single rental property or a small multifamily building, which will allow you to apply your professional expertise while gaining hands-on experience in ownership. Managing a small portfolio helps you refine skills like tenant relations, budgeting, and operational efficiency without taking on too many responsibilities. You can also test different investment strategies to see what’s right for you.
Deepen Your Financial Knowledge
While real estate professionals often work with basic metrics like cap rates and rental yields, successful investors often need a greater understanding of financial analysis. You’ll want to evaluate cash flow projections, financing structures, and returns to make informed decisions. You can acquire these skills or bring someone onto your team to help with the financial details.
