BiggerPockets

Getting Started As An Investor

When getting started as a real estate investor you always have many questions that need to be answered. In this article, I hope to answer many of these questions for you. What comes first? What is more important? How do I do this?

Where to begin? As a new investor you have no idea where you are going. Therefore, the first step you might want to implement is get a good education. Read as much as you can on your interest area. See if there are any courses that do not cost an arm and a leg to take. Ask experienced investors as many questions as they will answer for you.

After getting a good education you need to sit down and list your short, medium and long term goals you want to accomplish from investing in real estate. These must be put in writing to be more effective. Once they have been committed to paper, your subconscious mind begins to strive to help you achieve these goals. You will have to do all of the hard work while awake, but your brain will also be assisting you while you are sleeping. At the same time there will be friends and family trying to tell you this won't work. Your mind has to learn to block out these "negative nellies" or to devise a good response to all of their negativeness.

Once you have your goals down in writing and your mind is working on getting you there, you need to select one of the many real estate programs to get you where you want to go. Some refer to this as selecting a niche market to specialize in. You want to be the resident expert in your particular area that you select. Choose one area to specialize in and get all the education on that particular subject.

After selecting a niche to accomplish your goals you need to start getting properties, buyers & sellers into your marketing pipeline. Word of mouth advertising is the cheapest source available to you. Some refer to this as networking. Everywhere you go you must let everyone you meet know what you are trying to accomplish. Pass out business cards, use a letterhead, develop a flyer, do whatever it takes to get the word out.

Once you have deals floating through your pipeline, you need to have a good time management system in place. Only work with the decision makers. If an individual is wasting your valuable time, don't be afraid to ask them to go some place else. Do not get caught up in over analyzing a deal and then missing out on a good deal because you were not ready to make a decision. Learn to evaluate properties quickly and if the deal is there you have to take action. Some refer to this as "turning off the TV and getting yourself off of the couch". To help you manage your time better many suggest you build a good team or even find yourself a mentor to get you to your set goals faster. Others suggest joining a local real estate investor group. These are becoming harder and harder to find - at least in my area. One thing that ticks me off is for a commercial broker or a lender to never return a phone call or they return it a week or two later and you have forgotten why you called them. In the real estate business the rule of thumb for phone calls is to return them as soon as possible. If you wait over 24 hours to return calls, it has been proven that you have just lost yourself a potential customer or client.

How do you make real estate investing work? You have to make offers! Realize it is a numbers game - the more offers you make the better off you are to get one accepted. You may have to make 20 offers before you get one accepted. Learn to accept the rejection of your offers and look to the one that will be accepted. Make sure that when you make your offers, your credit report and credit score are in good order. Do not have any bad debts carried on your personal or business credit cards. Know some local lenders in the area of your expertise. Build up two accounts: One for investing initially in real estate and the other to have as a reserve account for when things are not going so well. You never want to get yourself over leveraged or all of your investments will start tumbling down one by one.

A new investor looks at investing as buying a Cadillac to drive down the street with the back windows open for people to toss money into. It does not work like that. There will be a lot of hard work involved, but eventually you will get to the point where you are financially free. Investing in real estate for the long term as a buy and hold strategy will make you wealthy according to some. Others want to grow faster and feel it is done by buying and selling properties for a profit and rolling the money into a 1031 exchange for a larger property. Whichever way you choose, to get started you have to make that first deal. After making your first deal, the excitement kicks in and you ask yourself why it took you so long to make that first deal. Sometimes you have to start at a very low position, but look at any opportunity to get your foot in the door as acceptable. You might start out as a bird dogger for another investor. You might work at a property management company as the handyman who preps the homes for the next tenant. You may even start out working as an onsite property manager for an investor or for a property management company. Learn all you can and move on to the next rung of the ladder.

This article started out with the first step being to get a good education. We will end it with the same or a similar step. Never stop learning about real estate. Times change and if you do not change at the same time others will pass you by. You must stay current and on top of all changes that affect your particular segment of the real estate investing arena.

Before you decide to retire from real estate investing, take the time to pass some of your knowledge on to others. Be a true mentor by providing all the info desired for free. You do not want to be associated with the saying "Those that can - do; those who can't - sell books and tapes". Some refer to those who can't as gurus. Why are they so busy selling books and tapes if the real money is made in real estate? Mentor can also be interchanged with coach. Be a coach/mentor by training others on how to become wealthy by investing in real estate!

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