How to Get Started in Real Estate Investing?
Updated: Feb 26, 2019
Is it just me or has real estate investing a tremendous amount of "popularity" over the last coming years?
What do you guys think it is from?
Is it due to the fact that we are exposed to so much information on a daily basis? What about the fact that our generation has come out college with a tremendous amount of debt and are always looking for ways to earn extra income?
For whatever reason, real estate has grown popular and there are more and more people trying to get involved (not saying they last, but are intrigued by the concept)
It is growing popular for good reason. Real estate is offers very unique benefits that have the ability to change financial futures for anybody who wants to learn, take action and execute.
Investing in real estate is a smart way to build immediate and passive income. The concept of being able to relinquish a pay check of anywhere between 20-40k in 3-5 months or building a portfolio of cash flowing properties can be very appealing to anybody. It is very possible to earn and build wealth through these assets.
Although there is increased competition in all market's, meaning less supply of discounted properties you can still find tremendous success if you execute a plan.
When I speak of a plan I don’t necessarily mean a written business plan, I mean specific goals and action steps to get there.
If you are looking to get into investing, you have to begin to take control of your life, your finances, your spending and your actions. Here are some steps that you should take/consider if you are interested in getting into real estate investing.
1) Identifying an Investment Vehicle
The first step you need to take is to identify the investment vehicle you will use to get started in real estate. Whether it’s rehabbing (flipping), traditional buy and hold multi-family investing, wholesaling, lease options or any other creative investment method, you will have to choose an investment vehicle that fits your personality, resources and current financial situation. This will take some time, I suggest you read on each of these topics and see what benefits these vehicles offer, hurdles they entail and if this medium fits your current lifestyle and goals. Each of these vehicles requires a different plan, so make sure the one the one you choose fits you. I also suggest when first starting out that you focus on ONE vehicle and try to master and set up systems so this vehicle runs smoothly before moving on to a different venture.
In my opinion, education is the starting point for any new endeavor you are looking to pursue. A good understanding of real estate, your niche and how to succeed is necessary prior to starting out in real estate investing. By learning about the specific topic of your choice you will be able to cut down the learning curve, mitigate the risk of failure and increase the odds of success. Here are some great ways to start your education cycle:
These books will give you better insight on all of topics you need a firm understanding on to be successful when starting off investing in real estate. When educating yourself do not get caught up in learning every little thing about the vehicle you choose, get a good feel of what needs to happen and begin your action steps (we will touch on later).
3) Develop A Plan
After you have a good feel for what vehicle you want to invest in and the associated goals, begin developing a plan to reach your goals. You need to be very specific with the goals that you lay out. Goals force you to take action and begin moving in the right direction. Some specific goals to think about are:
Owning 4 rental properties by the end of the year
Purchase 12 units in the next 6 months
flipping 4 houses in the coming year and buying a house every quarter
Wholesale 12 properties this year
After you figure out some specific goals, write down the action steps you will need to take to achieve your goals. If your goal is to earn 100,000 in 2016 through flipping houses, I want you to write down how many houses you will need to flip and what profit you will need to make from each flip to reach that 100,000 goal. Next, write down what steps you need to take to purchase your first property, how you will purchase your first property and the specific property you are looking for. I am not going to touch on each step you should take to develop your plan but you want it to be fairly detailed so you can come back to your plan and see where you stand. This will give you a road map to your goals and will allow you to stay on track to reach them.
4) Take Action
One of the biggest problems many want to be entrepreneurs have is taking action. You see it all of the time, they get so caught up in reading and learning and forget to take action or they tell themselves that they do not know enough to move forward.
Your ability to take action sooner than later is directly correlated with how soon you will see success (obvious right?). The sooner you get started, the sooner you will fail or the sooner you will have success. Like I said earlier do not get to caught up in learning every little thing about real estate investing, instead get a good feel of the basics and get out and start making moves. This is where developing a plan will be helpful. By laying out the groundwork of the necessary steps you believe you will need to take to reach your goals, you will be able to start making progress towards your goals. The sooner you start taking action, the sooner you will get your first deal.
After you get the first deal, you will be begin to understand what it entails to get that deal and move those experiences to your next day. The sooner you can gain real experience the sooner you will be able to grow your business.
By taking action you are going to be forced to put yourself in uncomfortable positions. These uncomfortable positions are going to force to make uncomfortable decisions. The uncomfortable decisions are going to make you grow and learn to assist you in your next deal.
Other Tips to Get Started Investing in Real Estate
These steps are not necessary to your real estate success but they will help decrease the learning curve and put you on the right path much sooner.
1) Find a Mentor
In our opinion, an underrated action step to get started in real estate. First, let me clarify what I mean by mentor. I am speaking about someone locally who has been in the game for a long period of time and is having great success using the strategy that you want to begin investing in real estate with. I am not talking about a real estate "guru" that you may find on a infomercial. By networking and going out and finding a mentor you will put yourself in a position to reduce the learning curve and move towards success at quicker clip. However, finding a mentor is not always an easy task. You have to put yourself in a position to help them while not expecting much in return. You have to go out and get that mentor, that mentor will not come and find you.
2) Attend REI groups
Each city or county that you want to invest in, will have a Real Estate Investing (REI) group that meets once a month to discuss specific topics. Here you will meet some of your peers, lenders, brokers and other players in the game. Each REI group is set up differently, so give your's a try and see if you think it will be beneficial to your success. It is always a good idea to get out and network with individuals who are trying to accomplish the same tasks as you. This will allow you to learn a lot about your market and see if the area you are investing in offers a chance to be successful.
Go Out & Get Started Investing in Real Estate
I want to clarify something before we finish up with this post. Real Estate Investing is not that difficult. In my opinion it is one of the easiest business models to emulate and find success in, if you want to take the time to learn. The most important tip we can offer is to take action. Educate yourself on the process and go out and start hustling. The sooner you fail, the sooner you will be able to find success. If you follow these simple steps you will set yourself up for success. Remember this process does not happen overnight and you have to continue to evaluate your progress and see if you are making the right the steps toward your goals.
Best of luck investing and if you guys ever have any questions, just reach out to us at firstname.lastname@example.org and we get back to you with answers as soon as we can.
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