Are you just starting out in investing in real estate? Sometimes real estate investing for beginners can seem a bit intimidating and it’s easy to get lost in the lights and sounds of all the blogs, books, and television gurus with their slick hair. To help cut through the crap that’s out there we wanted to create a short list of tips you can use as you embark on your journey to find financial freedom through real estate.
No, this isn’t going to teach you everything you need to know about how to invest in real estate. However, we hope this list will help point you in the right direction. It’s not exhaustive by any means, just a brief list of lessons we’ve learned along the way and hope will help propel you toward success. Here are ten tips for beginner real estate investors
1: Be Resolved: Real estate is not something to do on a whim. Investing in real estate is a lifelong pursuit to take control of your financial future – not a get-rich quick scheme. As an investor you will struggle. You will make mistakes. You will fail. The successful investors are the ones who can take those experiences and turn them into lessons to improve their skills.
2: You Don’t Need to Be an Expert in Real Estate Investing: Too many individuals talk about investing in real estate but instead just get bogged down with the vast amount of information out there the simple The simple fact is no one knows it all. You don’t need to be total expert in all things real estate to make smart choices while investing in real estate.
3: You DO Need to Do Your Homework: On the opposite end of the spectrum are investors who heard about real estate being a great investment and jump in with both feet – unsure of where they are going to land. Sometimes these investors get lucky and make it big (and usually go on to be the next big guru) but the majority of the time these investors fall and fall hard. Don’t be like them. Do your homework. Study the niche you want to invest in and learn everything you can about that subject.
4: Learn to Love Reading: You are obviously reading this article, so you apparently know how to read. Do more of this before you buy an investment property. If you don’t like reading – at least learn to listen to audio versions. Books have so much information in them and it’s a shame so many individuals are losing their love of books.
5: As a Beginner, Connect with Local Investors: This doesn’t mean to spam them with requests – but simply reach out. Begin hanging out where they hang out. Ask them to show you some of their properties. Most investors love to show off their accomplishments, so allow them to and pick up on every tidbit of information they can give you. Local investors will have a much better grasp at what works in your community than I or any other online investor will know.
6: Learn the Lingo: If you don’t know the lingo – you are going to look like a fool. Plain and simple. Don’t start talking to an investor about how you think his cap rates are the wrong color. You’ll just look stupid and display your ignorance. Be honest if you don’t know something and don’t try to be something you are not.
7: Get Creative: Lasting wealth is built through creativity. Practice changing your thought patterns from “I can’t” to “how can I” in everyday life. This simple practice will change the way you view conflict in all areas, including your investing in real estate.
8: Learn to Sacrifice: How bad do you want financial freedom? If you want to use investing in real estate to start living the life you’ve always dreamed you are going to have to sacrifice. You may need to forgo a vacation and use the money toward a down payment instead. You may need to move several times in order to build up enough capital to begin investing. You may need to learn how to use a paint brush and do your own work. If you are looking for a get-rich quick scheme – look elsewhere.
9: Learn (and Trust) Basic Math: The math involved in a investing in real estate is not college calculus. We’re talking fifth grade math and it isn’t difficult to learn. Income minus expenses equals cash flow. A gallon of paint costs $20 but a painter is going to cost $200. That’s the kind of math you need to get good at. Don’t assume anything – but use your math to make sure a deal is solid. Use a basic spreadsheet to analyze a deal. Once you understand the math – don’t deviate from it. Trust it. Don’t let your emotions get involved. Real estate is a numbers game and the quickest way to fail is to forget that.
10: Make a Written Plan: You wouldn’t take a road trip across the country without a map, so why take your trip through financial freedom without a map? To learn more about getting into investing in real estate, contact a member of the Asset Quest investment team at (239) 541-8448.