Starting in Real Estate: Our Top 3 Tips
You may have heard about the excellent opportunities there are for investing in real estate. Maybe you know someone who has several properties. Maybe you have just seen articles and blog posts like this one talking about the benefits of real estate investing. You started looking some things up online, but there are so many gurus trying to sell you information, so many different investors and friends telling you their way is the only way or the best way. There are so many options to choose from, so many ways to get started. Everyone has their own opinion on the best route to take, but you ended up here! So this is my opinion on the top three things you need to be thinking about in order to get started on your real estate investment journey.
Education
In my opinion, this is one you can’t skip. Educate yourself, invest in yourself, take the time to develop your understanding and mental game. Read and listen to anything you possibly can about real estate, money, business, and the investor mindset. Talk to as many people as you can, especially those in the community that you want to invest in. Go to real estate meetups and make connections with people in and around the real estate industry. Get book recommendations from people who are doing what you want to do… and actually follow through and read them. You don’t have to know exactly what niche of real estate you want to be in yet; you can decide that later once you know more about the industry as a whole. No matter what facet of real estate you ultimately settle into, you will need a solid basis of knowledge overall. Another educational source I have found helpful is to look at Zillow as often as possible and keep track of what prices properties are going for in the area to get an idea of what the local market is like.
Don’t wait until you are “ready” to actually invest to start educating yourself, or you will never actually be ready. Start now. The more you can learn, the better off you will be. One of the best things about the education step is that there is plenty of information out there for free or minimal cost! You do not need to pay for a course to get an education in real estate and investing. Start with books, podcasts, and blog posts. Consume as many books and podcasts as you can, it’s a lot of work and time, but it can save you enough money and headaches and get you so much farther in your investing journey that it is worth every minute. If you would like some resources to get started, you can visit our book and podcast recommendations at the bottom of our education page!
Purpose
Tip number two is having a clear purpose. You know real estate is a great investment, and you are now educating yourself on everything money, real estate, and investing. As you read and listen to everything you possibly can, you might start thinking about your purpose. What is your goal? Why do you want to get into real estate? Are you trying to build cash flow for supplemental income or to replace your current income? Do you want to buy several rentals and then pay them off for a simple but hassle free retirement? Do you want to invest your money into purely passive income? Maybe you are looking for a side hustle that can include your whole family and teach your kids valuable life skills. Maybe you want to branch out and learn some new skills yourself. Maybe you want to learn a little by working hands-on first, then pass off your investments to professionals to free you up for things you love more? Or could this be your dream job if you can just get into the real estate space? There are so many different ways to work and invest in real estate. Your purpose will help you narrow down which way is right for you. Dig deep, make sure you know what you really want out of your investing endeavors and why you want it. Without a firm grasp on your purpose, you will not have the right insights or clarity to ultimately succeed.
Action
At some point you have to take the leap. My third and final tip for you is to remember to just take action. You have to take the jump and get into your first investment or take that first step in the business and real estate world. First, understand and gauge your risk tolerance; everyone has a different level of this depending on personality, stage of life, and what your goals are. Sometimes single family homes tend to be less risky than multi-family because they are easier to sell to homeowners if things don’t go well. Small cosmetic remodels are often less risky than major structural remodels because it is easier to accurately plan out the costs with less hands-on knowledge. Higher risk can sometimes equate to higher rewards, but not always! The more education and experience you have, the lower the risk while maintaining those higher payoffs. Another great low risk, high reward route to take that can encompass your education and action steps is working with or for another investor! You don’t have to have one-hundred percent of a deal to get a great payoff. Would you rather have all the equity in a money and time sucking deal, or part of the equity in a great investment? As you make yourself more valuable to the people you are working with, more opportunities and knowledge will seek you out. Working around and in the real estate industry can open up some great opportunities for you even if you don’t get ownership in a property right away.
Secondly, be content taking the base hit. Your first deal will most likely not be a home run. Whatever route you decide on going, you have to take that jump to get an active role in the real estate world. Don’t wait for that incredible deal to jump into your lap, at this early stage in the game, that just isn’t as likely to happen. Deals are often made, not found. You can still get into a solid investment with some work and patience, your first try will always be an excellent learning experience and confidence boost.
If you want to learn a lot fast, and you have the time and desire to be an active participant in the investment, I would encourage a very hands on approach initially to help you learn the ropes. Once you know what you are doing, you can look for team members or third party companies to help take over or assist you. Whether you start out very passively, with another team, or jump in doing everything on your own, you still have to be the one that makes that first move to start your investing journey. Take action!
That’s your 3 tips to get you thinking about real estate investing! Please check out our book recommendations on our education page to get started on step one, and check out our real estate meetup to connect with like-minded people!
