Concrete Goal for Real Estate Beginners: Find and Execute *ONE* Deal

As a beginner to real estate investing, it is one thing to intellectually understand the principles of cashflow, passive income, appreciation, leverage, and tax benefits.  It is another thing to put those principles into action and actually purchase properties.  This is where many of the well-known real estate books cannot tell you what to do, because the actual steps are specific to each project: researching listings, making calls, putting together financials analysis, making an offer, and managing the project to success.

The fact that there is no definite "manual" for doing real estate deals is a good thing, because it allows you to find your own niche.  If the methods for real estate investing could be reduced to a single formula, a single big company could dominate the whole industry like happens in some manufacturing business segments.  In real estate, there is always room for a beginner-investor to find a project, finance it, and turn a profit or create cashflow.

I strongly recommend writing down concrete investing goals (desired amount of cashflow, net worth, number-of-properties, etc).  When I started, I came up with $10k/month of passive rental income as a concrete goal.  This goal becomes a compass, against which individual deals can be compared: "Will this deal get me closer to my goal?" Once long-term goals are in place, and general real estate principles are understood, there comes the point where there is only one immediate goal: Find and execute ONE deal.

This is the point I had reached when I began attending weekly investor meetings to review foreclosure properties in 2012. My goal was to find and buy one deal which would offer cashflow, equity, and the opportunity to acquire real-world education and experience.  My thought was, even if I lose some money, it would be better to lose it in a real-world deal than spending that money on a real estate course, due to the experience I'd gain.

This concrete goal of "execute one deal" can then be broken down into definite tasks, such as:

1. Perform financial analysis on 25 properties in your target area.
2. Talk with 3 hard money lenders in your area to find out if you can obtain financing for a distressed property.
3. Attend the weekly foreclosure auction in your county to observe how it works and see what prices properties are selling for.
4. Make a plan for saving $25k in cash which can become a down payment or renovation budget for a deal.
5. Approach 5 people in your friend/associate network to share your real estate goals and find out if they have any goals that overlap with yours, for potential partnership.

After performing these steps, the odds are good you'll find at least one deal that gets your creative juices flowing to shift from "theoretical desire to purchase real estate" to "actual real estate investor" mode.  The learning you obtain from your first deal will propel you to the next step!