Winston Deloney is a real estate businessman, developer, and self-proclaimed foodie based in Chicago, Illinois. He is also passionate about educating and advising people on everything that has to do with real estate.
There is no other better person to give insights on real estate. We had an interesting conversation with him. He shared exceptional advice on real estate investing.
How can someone without experience go into real estate?
Just like every other field or industry you need to have information about real estate. What can seem to be a bewildering array of business jargon and acronyms—1031s, REI, REITs, NOI, collateral, LTV, amortization, and Cap-Ex—will all become common territory with time.
You’ll be more secure and be in a better spot to make educated decisions if you understand more about the vocabulary investors use—not just what it is, but why it matters. So, take out time to read and gather information about the industry and its terms. This will save you from putting money in the wrong or low-yielding investment.
Most people consider the amount involved to start investing in real estate and get discouraged. How can one who does not have so much to start investing?
You just have to know where to look to find cash-flowing investment assets for less than $100,000. You can buy a premium investment property that produces passive income and lets you create long-term wealth for as little as $20,000. I know that this amount is not very affordable for the average investor, but with a schedule and a strategy, you can save up for the down payment.
Another option is to take up a mortgage loan. This will require you to pay back in a couple of years with interest. Also, you can decide to partner with other people to purchase the property especially if you know that none of you will stay there. The profits earned will in term be shared.
Where is the place or area you advise people to buy properties from?
I advise you to buy the property in an area that is developing. This should be an area that is predicted to become urbanized.
The primary aim of real estate investment is to purchase a property in a hot market. You will appreciate a city beyond your wildest imagination if you can get in on it before it gentrifies.
In the future, you’ll be able to greatly increase rentals. This is because the environment surrounding your home is improving and more prosperous residents are coming in. In the long run, you will be able to recover all that you spent.
Is there a type of building that is best to go into?
I advise most people to get rental properties. Just make sure you are prepared to be a landlord should you decide to venture into rentals.
My method in buying rental properties is quite simple. After deducting expenses like property taxes, maintenance fees, and other expenses from the amount you get from your tenants, you will earn profit as far as the money received is more than the amount you spent on these expenses.
This is why researching, and due diligence is very important. You make sure that whatever you have to pay for the expenses is not higher than the income you receive from the rent.
Winston Deloney, is it compulsory to have a house before you invest?
Absolutely not. If you wait until you own a house, then you might never invest in real estate. You can start small if you do not have enough funds.
You can just get a small bungalow or duplex depending on how much you can afford. You will then lease or rent the house. This will serve as extra income. The money you make from investing can even be used to purchase your dream home.
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