Real estate investing success is available to anyone who wants it. All over the country there is a growing number of people who have turned to real estate as a means of income. Despite the growing numbers, simply diving into the business does not mean you will flourish. There are several important steps and actions you must take if you want to be successful. As you are just starting out it can be quite overwhelming knowing what to do and who to listen to. Instead of trying to master every area of the business there are a few basic tips you should focus on. Here are five key tips to help you get started in real estate.
- Know the process. With the boom in interest there has also boom in real estate investing programming. Many of these shows are quite entertaining and can even be educational, but don’t always tell the whole story. The investor you see on your favorite show has most likely been in the business for years and has multiple systems and lead funnels in place. What they do in their market may not work for you and the market you choose. The first thing you need to do if you want to invest in real estate is to study the process. Whether you want to focus on quick flips or buy and hold rentals you need to know, and understand, how everything works. Too many investors get started without knowing what steps to take and end up boxing themselves in a corner. They end up scrambling just to make a small profit, or worse. Knowing what to expect keeps you one step ahead and gives you the best chance of making a good decision with the property.
- It’s ok to walk away. With the increase in competition it is very rare to get a slam dunk, too good to be true deal. This doesn’t mean there isn’t profit to be made, but you need to find a way to outsmart your competition. Whether you are looking for your first deal or have had some time from your last one you need to know that it is ok to walk away. Some of the best deals you will ever make are the ones you don’t make. It is easy to bend the numbers or imagine everything breaking right if you really want it to. If you need to rely on the best-case scenario you may be taking on more risk than the property is worth. There are always other properties out there. You may need to change up how to find them, but it is always better staying patient rather than forcing the issue on a property you know isn’t worth it.
- Consider all options. Even if you are laser focused on one specific area of the business you still need to keep all your options open. You never know when you will be presented with an opportunity that is too good to be true outside of your comfort zone. As you are just getting going you should become familiar with as many different ways to earn as possible. If you get a deal that you can’t do, you may be able to pass it along and make money wholesaling it. There may be a property that fits better as a rental than a flip. A good rental property can help generate short term monthly cash flow as you figure out what you want to do with the property. Perhaps you are not into flips and rehabs right now, but you may be at some point down the road. The more you know about each different area of the business the easier it is to not only make money but figure out where you want to hang your hat.
- Join a club/local investing group. If you want to invest in real estate, you need to commit to it. You can learn valuable skills and education online but that is only part of the process. You should talk to as many people who are actively investing in your area as possible. The best way of doing this is by joining a local investing club. In most markets you can find a REI club or something similar. These clubs have monthly meetings where you can network with people in different areas of the business as well as guest speakers on a particular niche. You can learn more simply from talking to people than any book you will read.
- Make a plan. Never do anything in real estate without a plan. By making offers on properties you don’t know everything about you will end up facing an uphill battle. As simple as it sounds start by mapping some short and long-term goals. What do you want from the business? Do you want to invest part time or are you looking for a way to supplement your full-time income? Do you want to generate funds for the short term, in the way of flips and rehabs, or do you want to invest for the long term with rental properties? The more defined your plan is the easier it is to market for the kinds of deals you want and act when they become available.
By focusing on these five areas you will be comfortable acting when a new deal comes your way.
