The following is a guest post on real estate investing from Brabble CEO and Founder Patrick Mackaronis. Pat is well-versed in investments and entrepreneurship, and runs a high-level social media startup in New York City.

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Deciding to invest in real estate can, for the long term, yield a profitable return. Along with market conditions, it is important to remember that there are other factors that can influence your success. To have a prosperous real estate investment business, you must have a detailed strategy and you must know the local market.

Real Estate Strategy

The most important aspect of real estate investing is to remember that this is a business, and all businesses take time to grow. A good business plan, cash reserves and patience are key components to a successful real estate business. A business plan will outline exact goals and the steps needed to get there, and will also delineate your exact financial position. A clear plan will serve to guide your business through both downturns and growth.

Cash reserves are essential to run your real estate business properly. Having reserves on hand will make the difference between waiting for a suitable tenant versus renting to just anyone, or selling your property at a very reduced price instead of waiting for market conditions to improve. You will also need cash reserves for building repairs, appliance replacement, yard work or general maintenance items that may be necessary.

The Real Estate Market

Perhaps the most important piece of real estate investing is to know your market. Knowing the market does not mean having knowledge of national trends and figures; while this is indeed important, it is more important to know the local trends and numbers. This means knowing the median sales price for single family homes and condominiums, as well as the median rental fees for your area. Sometimes prices can vary from one neighborhood to another, so it is important to do the research prior to making an investment.

Stay current on houses listed for sale and what the prices are, as well as the final sales price. In certain markets houses are selling significantly below list price, while in other markets houses are selling at or above list price. The U.S. Department of Housing and Urban

Development has a fair market rental tool for rental market analysis in your area. Remember, national trends do not provide an accurate reflection of local market activity.

Foreclosure Investments

Foreclosure investing can be tricky. Unlike regular real estate investments, these properties have the potential to be fraught with hazard. For the most part, houses that have been through foreclosure will need more work than regular houses to make them worth market value.

It is important to remember that foreclosure properties might have other surprises, as well. Federal tax liens, unpaid property taxes and incorrect property information are just a few issues you might be facing. It is imperative to thoroughly research all applicable state laws prior to making a purchase. Also research the property for sale as much as possible. Incurring hidden costs is not favorable for any business, but it can be especially devastating in the real estate investment business.

When considering purchasing foreclosure properties, remember that there may be hefty competition from other investors. Typically, foreclosure properties can be bought at a public auction which takes place in or in front of the local courthouse. If there is a bargain to be had, you may find yourself in a bidding war with others, ultimately driving the house price higher than intended. Be certain you know exactly how much you can spend, taking into account expenditures for repairs and maintenance on the property.

Real Estate Decisions

When treated as a business and approached with caution, real estate investment has the potential for long term financial growth. Always do your research and avoid risks, no matter how big the alleged payoff. Remember, this is not just a business, this is also your future.

Patrick Mackaronis can be reached on Twitter at @patty__mack, or through the Patrick Mackaronis blog.