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APRIL 2021 • WWW.AAGLA.ORG
MY TEN RULES FOR
SIMART REAL ESTATE INVESTING
By Harma Hartouni
f you ask any successful businessperson amenities you want. Just ask yourself, for advice on building wealth, I guarantee “do the numbers make sense?”
they will tell you to invest your money. But “invest” is such a broad term. It is almost as broad as saying “work” if you want to make money. Invest in what? I do not invest in stocks, mutual funds, bitcoin, or any other
popular investment products. I stick to what I know best and I only invest in real estate. Throughout my career as a real estate broker, investor, and executive, I have purchased many properties that yield strong returns and have increased my net worth and retirement security. As an investor, there is certainly a lot I would do differently if I could go back in time. For example, I would invest in more distressed or “REO” properties and start younger so that I could enjoy my investments for longer. But in my 20+ years of experience, I have learned what works and what does not. Successful real estate investment comes down to these ten rules.
1) CAPITAL IS KING
Let us start at the beginning. What makes a good real estate investor? The most important piece of investing in real estate is making sure that you have the capital to invest. Do not invest in anything that you cannot afford or don’t have the money to take care of.
2) KNOW YOUR MARKET
Invest in markets that you understand and know intimately. I have primarily invested my money in the Los Angeles market because I know it best. That being said, the shift in rental restrictions and the regulatory landscape has made Los Angeles a less desirable market for investment. Many are selling their Los Angeles area portfolios and going to different markets. If you decide to invest in a market other than your own, study it, spend time in it, and become an expert at it.
3) IT IS ABOUT NUMBERS, NOT EMOTIONS
A common mistake among new real estate investors is that they invest in a property they would want to live in or have an emotional reaction to. The best investments are about numbers, pure and simple. A great investment does not have to be in your favorite neighborhood, fit your personal needs, or have the
4) HIRE THE BEST PEOPLE
From the moment you decide
that you want to invest, you
must hire the best people to
help you. You need a top-quality
real estate agent experienced in
investment properties and a good
title company to make sure the title is clean. Hiring the best people becomes even more important after closing. This is not a time to employ a close friend or family member to manage your property if they are not an experienced property manager. It may seem attractive to lower your carrying costs by hiring the most affordable person you can find or doing it yourself, but it is not a smart way to protect your investment. Hire a highly qualified on-site manager.
5) INVESTMENT IS A LONG-TERM GAME
Many television shows about real estate investment present massive short-term returns with just a bit of “sweat equity.” That is one way to invest, but I am a firm believer in thinking long-term. Warren Buffet said, “If you are not willing to own a stock for ten years, do not even think about owning it for 10 minutes”. The same can be said for real estate investment. The best returns are found over time as neighborhoods change and value increases. Investing is not a get-rich- quick scheme. Remember, success happens gradually, gradually, gradually, and then suddenly.
6) INVEST IN NEWER PROPERTIES
If you are a beginner investor, I strongly recommend investing in newer buildings that will not require large capital expenditures for maintenance for at least 15-20 years. Doing so gives you time to continue to invest back into your portfolio and build up reserves.
7) INVEST IN A B-TIER NEIGHBORHOOD
If you want to see great returns, do not invest in the nicest neighborhoods. Invest in neighborhoods that are still growing and improving. In my 20+ years of experience, I have found that it is inevitable that the most desirable “A-tier” neighborhoods become so expensive that they prohibit investment. B-tier
 





































































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