Real estate investing has become an intriguing business venture for those with some money and time to start. The one constant throughout time has been that real estate is an excellent long-term investment, but some people also make plenty of money on short-term investments.
Jerome Karam of JMK5 Holdings isn’t new to real estate investing, which puts him in a great spot to share tips for those just starting now. Whether commercial or residential investment properties, Jerome Karam has a strong portfolio in his home state of Louisiana and the Greater Houston area, where he resides today.
What are some of his top tips for investing? Throughout the years, he’s shared his thoughts on what works for him that’s replicable.
Focus on a Specific Market
New real estate investors have no reason to spread themselves too thinly. The better option is to focus on a specific market to become experts.
Jerome Karam did precisely that early on, and he stuck to those principles time after time. Look at all the projects he and his team have done on their website, and there’s a common theme.
Virtually every real estate redevelopment project is going on in Louisiana or Texas. Jumping into a foreign market would take away a significant part of his advantage.
Avoid Following the Trends Only
An introductory article online will describe some of the fastest-growing markets in the United States. While that information can be helpful, those areas will also become littered with competition. Those starting might not be able to keep up with those who have been in it for decades.
A solution to having less competition is to look for hidden markets. Maybe the overall paydays won’t be as enormous as the first few, but it’s still an excellent option to kickstart a business. It also tends to be more friendly to first-timers without experience thriving in the hottest market.
As simple as that sounds, real estate investing should look like investing in a dividend-paying stock. The cheaper a place can be purchased, the more profitable the opportunity. In the beginning, a good return on investment can fund projects.
Jerome Karam says people shouldn’t be so caught up in bidding wars or trying to land a perfect option every time. Only if there’s an opportunity to buy low can an investment property turn into a profit. Overpaying by falling in love with a specific property gives all the advantages to the seller.
Calculate Overlooked Upfront Costs
Many new real estate investors make the mistake of not understanding all the upfront costs. It goes beyond paying for the property and giving a realtor their cut.
Re-developing a property means paying for any repairs, fixing electrical issues, and so much more. It might take quite a hefty investment just to get the property back into working order.
Getting everything done correctly usually means involving professionals, whether it’s a residential or commercial property. This can eat into the profit margins, but calculating beforehand will give people a better idea of what to expect.
Handle Risk Properly
There’s a risk when starting a new business venture. Real estate investing is no different. Many get into trouble by going into debt and not figuring out how to get out. Investment properties require some down payment.
Having money ready can help eliminate the risk factor quite a bit. Whether a person uses their own money or has a partner for support, it fixes a lot of risks. There’s still a matter of executing, but at least the investment isn’t a failure before it even reaches the selling stage.
Network and Encourage Referrals
Networking and referrals come when people develop friends in the real estate industry. Even if it’s not someone’s personality to do this, there needs to be a focus on overall friendliness and helping others out when possible.
Jerome Karam has found ways to use networking as an advantage to find future projects. Despite moving away from Louisiana, he keeps in touch with many in the area to have great ideas when opportunities arise.
Thanks to his successful re-development projects in certain areas of Greater Houston, people are willing to go to him with new opportunities.
There’s no telling what a little bit of networking can do to grow a business as a whole. Those in the residential side of real estate might lean more on referrals. Gain the reputation of being a hard-working individual in real estate, and referrals become more accessible and easier to pick up with minor effort.
Understand Rules and Regulations of Real Estate Investing
Going in without proper knowledge of rules and regulations with real estate investing can cause many unwanted issues. Learning some of the ins and outs of how everything works take time. Knowing what to expect won’t put a budding real estate business under scrutiny by breaking unknown rules.
People always make mistakes when jumping into a new business. Reading all the rules and regulations and even having them memorized wouldn’t stop that from occurring. It’s worth the extra effort to reduce risk.
Why Jerome Karam Believes More People Can Find Success in Real Estate Investing
Real estate opportunities exist for those willing to put in the work. It’s not easy, and it usually takes time. Those dedicated to the craft and wanting to move along as one of the best in the industry can start reaching goals in a relatively short amount of time.
For Jerome Karam, success didn’t happen overnight, but now he’s settled into a career that employs his entire family. Whether a person has expectations to meet the standard of JMK5 Holdings or they just want to invest in one or two properties, it’s possible with the proper blueprint.