Beginner’s Guide To Investing In Real EstateBy Paul Esajian on December 7, 2018
If you have spent the past few years watching home flipping shows on TV wondering how you can get started the answer is simple: do it. There are no barriers of entry that can’t be met. You don’t have to pass a class or have a certain reserve requirement to submit an offer. You don’t need to have experience in a real estate related field or even own your own property. If you have had enough of the corporate world and are fascinated by real estate, you can make a career out of it. The best part is you can do it your way, without having to emulate other investors in your area. Breaking into any new business can be difficult but you can do it. Here are five tips to help you get started in the world of real estate investing.
- Study your craft. If you wanted to open an ice cream shop it would stand to reason you would know everything about the product. As obvious as it sounds, the first step in any new business is education. On the surface, real estate is full of difficult terms and jargon that can be intimidating. The reality is that just like anything else the more you study and learn, the less intimidating the business seems. Instead of trying to digest everything at once you should break the business apart into sections. One week you should learn about specific real estate markets, the next about property evaluation, the next on financing and so on. Learning the business certainly won’t happen overnight, but if you are willing to take the time and study you will slowly get the hang of it. The more you know the easier it is to talk to people and ultimately feel confident making an offer.
- Find a mentor. Even with all the education in the world it is natural to feel hesitant making an offer. For all the stories of achievement, there are many stories of newbie investors getting in over their heads on deals they should have run from. The best way to help get over this initial fear is to find a mentor you are comfortable with. A mentor can be any friend, family member, networking associate or educator that is willing and able to guide you through the process. They will act as a sounding board with any questions or scenarios you may have. They should help push you away from speculative deals and steer you towards one with a reasonable return. You may question why they do and say what they do early on, but over time you will begin to see their reasoning. A mentor may want to be part of your deals to compensate for their time, or they may simply be willing to help guide you. Either way, a good mentor is an invaluable presence for any new investor.
- Make achievable goals. Every successful investor has goals they try to achieve daily. Without goals you will find it difficult to have any footing in the business. You will jump at every new opportunity that comes your way, without really knowing what you want out of it. One day you will be chasing deals in a market 30 miles away and the next you will be looking at a three-family foreclosure. Not only will this prove to be unproductive you will quickly become frustrated and annoyed with the business. Conversely, by setting goals and mapping out an action plan it will expedite your path to success. You will have an idea of what type of properties to look for, in what markets and at what price point. You will not waste time on properties that don’t fit exactly what you are looking for. Make your goals for 30,60 & 90 days as well as 6 and 12 months out. These will be your marker and help you evaluate where you are in the business.
- Find your own way. The real estate investing business is a blank canvas for you to do whatever you want. You can study the path of proven investors in your niche, but you can also create your own way. If there is something you don’t like about the business, you can tweak your plan to fit your personality. You don’t have to look, act and talk like everyone else around you. You can have success investing to your style and your personality. This may take your network a little longer to warm up to, but if you stick to it eventually they will accept it. Whatever you want to do in real estate and however you want to do it is possible with persistence and repetition.
- Be willing to work. Real estate deals are not going to fall on your lap. All the education and experience in the world are not going to help you find new deals. You need to go out there and get them. There are many deals that can be had simply with a little effort and follow up. Calling a FSBO listing one time and hoping for a call back will not get the job done. You need to do what the people around you aren’t willing, or don’t want, to do. There are going to be early morning and late-night networking meetings that can seem like a waste of time but will be the backbone of your success. There will be new listings where you must drop everything and drive to only to get outbid by someone else. Hard work and persistence are as important as anything else in your business.
Breaking into real estate is difficult, but far from impossible. Every day new investors dip their toe in the investing waters and wonder why it took them so long. Don’t wait another day to get started investing in real estate.