The beautiful thing about real estate investing is that you can do it with little to no formal training. You don’t need an advanced real estate degree to get started. You don’t need to spend time and money attending trainings and workshops. You can find a lot of the resources that you need to be successful online. On our recent learning the basics of real estate podcast, we discussed tips and tricks first-time investors can use to be a star player in the real estate game. Learning from professional investors is the most efficient way of becoming a pro yourself.
Be Informed When you are just getting started in real estate, you want to soak up as much information as possible. If you’ve been wondering how to become financially independent for a while, educating yourself is the first step. Listening to investment podcasts as you drive, workout, or during your quiet time can help you become familiar with many important real estate terms and jargon. Hearing about the tricks of the trade from investors who have made big money can help you create your plan of action. Reading articles and blogs online is another great way to soak up this information. Of course, it’s important to do your research and make sure you’re reading information from credible sources. If there are networking or real estate investing seminars for beginners in your area, it wouldn’t hurt to attend one or two, just to immerse yourself further in the industry.
Pick A Strategy
Once you’ve gathered enough information to get started, the fun begins. Your first step in real estate investing will depend on which investment strategy you’re using (flipping houses, buy and hold, turnkey properties.) You may need to start searching the area for affordable homes to flip, or if you’re investing in turnkey properties, you can skip a few steps and move right on to making a profit.
If you were to ask experienced investors what their advice on investment for beginners would be, they would say:
- Learn to love reading
- Connect with local investors
- Make a written plan
- Start small
- Treat your business like a business
- Focus on exceptional bookkeeping and accounting practices
- Don’t quit your day job- yet.
Get Organized Write down a detailed 90-day plan about your goals, deadlines and action steps. You’ve done enough research and contemplating, now is the time for action. Don’t be afraid to go back and adjust your written plan. A smart investor will “Plan, Do, Check and Adjust” throughout his/her career. This strategy will help keep your goals attainable and help you focus on specific action steps to help you reach them.
Learn From Mistakes Before You Make Them When you are first starting out in any business venture, there is no doubt that you will make some mistakes. Some investors go for deals without having cash buyers in place. Others fail to do a proper deal analysis and end up shelling out way more money than they should have. If you can learn from your mistakes, that’s good. If you can learn from the mistakes of others, that is even better. Other common mistakes that can cost you time and money include:
- Getting into this business to “get rich quick.”
- Failing to plan
- Misjudging cash flow
- Trying to do it on your own
- Overpaying for a property
- Remodeling without permits
- Not having an exit strategy
- Being impatient
- Analysis Paralysis
Find A Mentor You don’t have to work as an apprentice for years for very little pay to learn the in’s and out’s of the investing world. But connecting with a real estate mentor who is willing to share his/her knowledge with you and show you the ropes can be priceless. Don’t ask your best friend to be your mentor simply because he’s your best friend. Talk with a few successful investors to find someone who meshes with your personal and professional style. Your mentor should be able to guide and serve you, answer your questions and offer advice when you hit an obstacle. They should act as a sounding board to bounce ideas off of, and help you identify which investing strategy is best for you.
Explore Your Options One of the best things about real estate investing, especially with turnkey real estate, is that you can do it from pretty much anywhere. For first-time investors, this means being able to invest in some of the hottest markets without having to move there. Beginners can invest in popular areas like Indianapolis or Jacksonville without uprooting their families and quitting their jobs to relocate. When you’re first getting started in real estate, don’t assume you can only invest locally.
Explore other cities and even states to find the best deals. Investing in turnkey properties is easy from a distance, as so much of the hard work is already done for you. In Indianapolis for example, many areas that were previously classed as “D properties” are now becoming C-class areas. This is good for investors because it means they can buy decent properties in suitable areas for really low prices. Don’t feel like you have to stay local when it comes to real estate investing.
You don’t have to memorize the entire Real Estate Investing For Dummies book or go back to school and get a formal degree to get started in investing. You simply need a desire to learn, strong work ethic, and a community of people to support and guide you.
You may be about to take the first step towards wealth, freedom, and happiness. You may be on the brink of changing your legacy. Real estate investing has the ability, if done correctly, to change lives. Do your homework, listen to those who have come before you, and go for it!