Everyone knows there is money in real estate. You see home prices going up all over the country. You’ve watched the shows and see people making a profit. Maybe you know someone who has done well investing in real estate. Well, are YOU ready to get started? Everyone’s journey is different and there are a lot of factors to consider. Here are 4 keys to help you get started in your real estate journey:
- Begin with the end in mind
It’s important to know why you want to start this journey in the first place. Are you looking for a quick gain, long-term cash flow, to pay off debt, early retirement or a real estate empire? Whatever it is, you will need to take small steps to get there, but if you don’t know where you want to end up, you might get off track and go in the wrong direction. For example, if your ultimate goal is to grow your passive income through rental properties, flipping houses for down-payment money is a great help. However, if you get so good at flipping houses that you never buy rental properties, you’ve gotten off track.
So, what’s your goal? Figure it out and write it down. Create visuals like a thermometer chart to remind you how much more you need to go to reach your goal. Make it an agenda item to review every year. Before you begin, knowing where you want to end up will ensure you get on, and stay on, the right track.
- Be open to learning
There are two ways of learning and both are important – theory and practice. Theory is everything you have already learned through reading books, listening to podcasts and going to seminars about real estate. Practice is doing a deal. The real deal, if you will. The real knowledge comes from the doing, but before you can do that, you need to soak up the theory. This will help you figure out what you are really after (remember key #1 above?) and prepare you for what lies ahead.
Don’t become a know-it-all. Sometimes new investors feel like they need to prove that they know what they are doing and don’t need any advice. This is a big mistake. If a more experienced investor is willing to tell you their story, or give you some advice, LISTEN. You don’t have agree with them or take their advice, but you can always learn something. The market is always changing, so if you want a long-term business, you need to continually learn.
- Figure out your financials
You know what they say in real estate – “Cash Is King.” Well, what if you only have a little cash or no cash at all? You can still get into the real estate game, but you need a strategy. One of the beautiful things about real estate investing is that other people are willing to lend you money if you know what you are doing and have a good track record. All you need to get started is a steady income and a decent credit rating. If you don’t have these, you will need to find a partner to work with who does, and who is willing to trust you to follow through on your end of the bargain.
If you do have the money, make sure to use it wisely. You don’t have to pump all your cash into one deal. Using a combination of cash and loans will allow you to do more deals at once. Where ever your finances are, know that you have options. Explore them!
- Believe in yourself
Real estate investing has its ups and its downs. There are many variables that come into play and things never go exactly as planned. You will experience times of doubt. Even so, you should know that whatever comes your way, you can navigate through to the other side. Remember in Key #2 when I said that the real learning is in the doing? Sometimes that means you learn a lesson the hard way. THAT’S NORMAL. There isn’t anything wrong with you (or your partner/contractor/agent, etc.), it’s just the nature of the business. Keep your chin up and keep moving forward. The most successful investors are the ones who make the most mistakes… and learn from them. That doesn’t mean you can be reckless; it just means that despite your best efforts, there will be some unexpected hardships. Be confident that you have what it takes to finish strong.
If you begin with these four keys in mind, you will be on track for great success as a real estate investor. Many people make money in real estate, so there’s no reason why you can’t be one of them!