Real estate purchases have made many people wealthy, but as with any purchase or investment, you should be aware of the risks involved. Whether you’re buying a turn-key rental property, plan to fix and flip, or otherwise, choosing a high demand location is almost always a good choice. Here, we will discuss 6 things you should do prior to buying real estate.

#1 Research Multiple Markets

It’s always a good idea to know what’s out there. Before buying property in any area, you should consider researching a few different markets and seeing how they stack up. While the news and various financial publications are quick to identify the nation’s top markets, those are far from your only options.

In fact, you might face less competition and comparable value looking in a market that isn’t at the center of media attention. Memphis is a good example, currently in a state of continued growth but having faded from the media spotlight last year in lieu of new “hot markets” they want to cover.

#2 Know Your Numbers

Investing in anything requires a solid understanding of your own finances and your financial projections. You need to know your budget, property values, and current rental rates in whatever area you’re looking to buy in. If you want to fix and flip, you need a good estimation of repair costs before you make an offer on the home, and you also need a realistic, fact-based number of how much you might be able to sell the place for down the road.

#3 Find Skilled Professionals

Whether you have bought real estate before or not, it’s always worthwhile to have a team of skilled professionals on your side. Beyond an agent who can scour the MLS for you to find listings, you should also get a qualified and trustworthy home inspector and even a property appraiser on your side for help.

#4 Take Emotions Out Of It

Easier said than done for some people, making any sort of large purchase always seems to lead to some emotional involvement. Buying real estate is no different, especially when you consider how much time goes into the search and closing process. However, at the end of the day, if you’re buying real estate as an investment, you always need to focus on the bottom line. Buy low, sell high. Think logically about market value, not necessarily about what you like.

#5 Prepare Your Funds

You won’t be able to qualify for the same no down payment and low down payment loan programs that consumers can use. Instead, you need to get some cash reserves set aside to cover any portion of the down payment, closing costs, and renovation costs that will ultimately be coming out of your pocket.

#6 Research Loan Options

With some cash reserves and an idea of where you’ll be shopping, you can begin to research investment loan options that fit your plans. During application, most will require you to go ahead and plug in the purchase numbers and the projected profit you intend to make. It’s often best to speak to a loan officer directly, especially if you’re trying to secure a loan before you have a specific property in mind.