Zamir Kazi is a serial entrepreneur who has found enormous success in the real estate industry. He started out with a $60,000 duplex and made some aggressive moves to flip properties for gains. Over the next year, he built a portfolio of 200 properties and began experimenting in more areas of real estate.
Originally Kazi was based in Los Angeles and dealt mostly with a specific property niche, but as his portfolio grew he started to experiment with other markets. He has since worked in a wide range of cities, and in land development, multifamily, single-family and other areas of real estate. Now 4 years into his real estate career, Kazi has over 400 properties in his portfolio and is raising a $25 million real estate investment fund.
For any entrepreneur looking to enter real estate, Kazi has a set of tips for learning the ropes and minimizing mistakes. However, he emphasizes that most real estate needs to be learned through mistakes and it’s important to simply plunge in. Even with just a few thousand dollars, you can get started in this lucrative field.
Step 1: Find a quality team
Ultimately, every property you look at has a potential value and a potential cost. Your job as a real estate entrepreneur is to constantly improve your discernment in evaluating what the value and cost of a property are. Setting up processes to help you to learn more and optimize your deal flow are critical from day one. This will initially require you to find a mentor who can share wisdom about broad real estate practices, as well as local information.
After reaching out to a few real estate professionals in your area and finding a mentor, you need to learn what things cost and how you can go about minimizing those costs. If you are working with a contractor or plumber who consistently overcharges, goes over budget or has major mistakes or delays, you will quickly see profits vanish. Ask around and learn about construction yourself so you can recruit a solid team.
Step 2: Think about why real estate prices change
Once you have a team to help you and a mentor to guide you, you should start looking at properties and do as many deals as possible. With every deal, you will learn a wealth of new information and get much better at spotting quality properties and executing successfully. It’s important to pay attention to things such as what factors impact returns across markets.
Recently, one of the obvious signs for potential growth lies with the rise in incomes from the tech industry. As cities such as Seattle, San Francisco and New York see average incomes rise, there will potentially be a rise in housing prices. Understanding this will allow you to analyze long-term growth in prices and avoid experiencing a bubble and market crash. Kazi warns that we may currently be in a bubble, and that investors should proceed with caution.
Step 3: Find a setup that works for you
As you decide what property to start with, think about what you know about real estate. In your hometown, there were likely desirable neighborhoods and less desirable neighborhoods. Furthermore, as different schools popped up or restaurants closed, neighborhoods would change in desirability. These the factors, along with price, signal the best place to purchase property.
After spotting a market you feel would offer a good return on investment, think of ways to safely leverage your assets. Due to the ability of banks to hold houses as collateral, mortgages allow real estate investors to acquire a property for anywhere from 3 percent to 20 percent of the face value. This means that even starting with $10,000 can allow you to purchase a $333,000 house. However, if the house price drops too much, as happened on a large scale in 2008, the bank will foreclose your property.
Step 4: Leverage technology
A number of emerging technologies are revolutionizing the real estate industry and making the real estate investor’s job easier. One company at the forefront of the technological revolution is Zillow, which brings a range of single-family property data to your computer. Furthermore, data-analysis tools and machine learning offer more accurate ways to evaluate property value and costs.
Finally, new services have popped up that offer improved services for real estate investors. One of these is a flat-rate brokerage service that can save investors thousands of dollars on a single deal. Much of the real estate industry is technologically stagnant, but every technological advancement will make investing in real estate easier and more profitable.
Real estate is an incredible asset class for wealth generation and when done effectively can lead to massive wealth creation, as Zamir Kazi has shown. As you start out, find people to help you succeed and always try to understand why certain markets appreciate and depreciate. It might be scary, but taking the first step into real estate will be a hugely valuable move in the long run.
