CHECK YOUR WALLET
OK, before anything it's strongly suggested that you evaluate your level of tangible assets, liquidity, and credit and or access to investors. Refresh your credit score, begin setting aside cash instantly (yes today) and begin seeing who in your network can be of help (Ie brokers, investors, current landlords etc). There's thousands of writeups on bank financing etc so we'll treat you all as though you know how to apply for financing.
DEVELOP YOUR BUSINESS PLAN
We're steering clear off the beaten path here because too often people think "I can afford a multifamily in bushwick" etc yap yap yap. The answer is no; you're not a Real Estate expert, you don't have a clue what you're capable of. Work from the top down; begin by identifying your ideal locations and type of property if you're already familiar with what you'd like to own.
Next begin with what kind of cashflow it would take to make this deal work for you (Ie A property that nets you 7-9% annually is safer, effective and great leverage). If there are areas of homeownership you're unfamiliar with you can either learn or play it safe with contractors.
TIME IS YOUR GREATEST WEALTH
We'd all love to win the Lotto, marry a model and drive a Ferrari daily, but for the meantime be realistic. If you're short on time and cash then you're most viable option would be to look into buying a Condo (coops suck, but there are some liberal and lax boards out there … somewhere) because the peace of mind when owning and renting a Condo is that there's little to no time needed to be invested into the property since the building takes care of all that.
If you're able to take a more intensive approach then multifamily and or commercial properties may be your road to riches, they require more work but many a time (remember the financials) a bigger property may seem as a bigger headache at first but yield you a bigger return at the end of the year.
Case in point: a multifamily in Brooklyn costs you $ 900,000 and yield you $ 63,000 annually, meanwhile a 2 bedroom in midtown Manhattan costs you the same $ 900,000 but yields you $ 81,000 all because of operating costs. Plan ahead!
UNCLE SAM BECOMES ALOT NICER
For every person who knows this, there are just as many that don't. The minute you buy property you're taxed differently on your than an employee or an independent contractor and that's a real initiative in itself.
Extra tip: Have a Real Estate attorney do a lien and judgement search on any property before proceeding. As well as search for tax abatements (tax breaks) that are available to many investors especially those who make improvements on their properties
WILL YOU LIKE YOUR NEIGHBORS?
Yes that's a pun on good ol Mr Rogers. A key point that savvy investors take are to look at the area they're interested in. Take a look at how sales prices have been reacting alongside rental prices. This one fact will help those investors decide whether they're looking for a quick flip (a few months to 3 years) or a long hold (3 years and longer).
Last but not least, take your time. There's always a great deal out there, too often a potential investor will let the shiny project cloud their judgement and they'll often end up screwed. Doesn't matter if you've been investing for 20 years or 20 minutes getting a real look at every deal with unbiased perspective (including other professionals input) is the key to your financial future. Remember the old Army mantra "Slow is steady, steady is smooth, smooth is fast."
Go Be A Maven