Real Estate Investing? Be Patient!
Author: Troy Schuricht • URL: http://www.communityfirstfinancial.comMay 15th, 2008 •
I talk to hundreds of investors every month and there are some thoughts I would like to share with you on my experiences with investors, particularly first time investors.
The question I hear the most for our investors is, How do I to get ready to start investing?
The answer for me is two parts.
- Are you ready to invest?
- Are you patient?
The key to investing is to be prepared financially, physically and emotionally.
- Financially - Make sure you have your credit in order and you have an understanding of the financial commitment in order to invest. Understand cash flow, entry strategies and exit strategies for real estate. Have your financial advisor’s in place, loan officer, CPA and real estate attorney.
- Physically - Can you move into your investment at any time? Do you have a property manager? Will there be any work that needs to be done to your property? If you are not ready to get physically invovled with your investment do you have the people in place to help? Have the individuals like property mangers, general contractors, and handyman’s ready to go.
- Emotionally - Does finding a renter stress you out? Do you trust a good deal when you find one? Are you missing all the great deals because you think about it one day too long? The very best real estate deal do not hang around for long. They sell and move quickly because other investors that are better prepared or willing to take more risk move quickly. Investors do not need to be cold as ice to make a deal, having help and advise is valueable. Talk to other investors, Realtors, and loan officers use their experience if your unsure. From a mental stand point investing is not easy. If it was there would be no room for you and me.
Remember to be ready financially, physically and emotionally you have to be patient.
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Tags: landlord, lease, real estate, real estate investing, Real Estate Investing, real estate investor, renter
Joshua Dorkin
Charles Feldman
Ted Karsch.
Troy Schuricht
Anwell Tsai
Richard Warren
Jim Watkins
I think for me the preparation I needed boiled down to a single decision: that to start investing automatically. I set up an account with Vanguard and bought into their index fund, then set it up to take 150 bucks each month out of my checking account automatically.
This has been a critical move on my part, and I can tell you what prepared me for it: increasing awareness. I really feel that I matured a bit in terms of honestly assessing my life and my current financial situation to the point that I wanted to turn things around.
I got sick of buying stuff and then having to work harder and longer hours in order to get more and more “stuff.” Every tech gadget that I don’t buy now gets invested right into an index fund.
What does this mean? I am buying my future back. Thanks so much for the inspiration here at Bigger Pockets….I know mine are!
Being prepared means being ready in every consequence associated with your decisions.
Very nice article. I really impressed with the 3 investing keys. Mostly we talk investing only by seeing the external factor. But these keys made different review.
I agree wholeheartedly with your advice and would add the following:
1. Talk to your accountant and get your company set up whether it be an LLC, S corp or whatever.
2. Establish your minimum financial hurdle rates. Then set up your financial models so that you can make a decision quickly. You have to be ready to pull the trigger fast. Good deals are rarely around longer than a week.
3. Establish your property criteria. Looking for minimal investment of time with credit-worthy tenants? Looking for a fixer-upper or “value add” deal? Whatever your criteria, establish it and then stick to it. You won’t waste yours or anyone else’s time looking at deals just because they sound like a bargain.
Essentially, determine everything you need in place to establish a business and actually purchase a piece of property. Then narrow the types of properties you are willing to review and establish your minimum financial hurdles. Don’t waste people’s time. It is a big investment. Take it serious and get to the point where you can quickly pull the trigger on a deal that meets your criteria.
Troy - great post. Much of the single family mess in some markets was fueled by impatient speculators, not by patient investors. Real estate investing is not a way to “get rich quick”. Sound principles like you’ve outlined combined with thoughtful attention to market and deal fundamentals will create real estate wealth down the road.
You’re post reminded me of a great quote - “Luck is what happens when preparedness meets opportunity”. Your call to be prepared is right on line.
It is such a great time to get involved in real estate investing if you know what you’re doing. If you’ve got the drive and a mentor of some sort to help you work through the deals than it is my opinion that we may never see a better time to get started. With prices discounted the way they are and the number of foreclosures reaching the levels they are it’s hard not to get involved.
A very interesting article. Listing the three keys to investing is a very useful thing, as many people pay attention only to the financial factor and tend to forget or ignore the other two.
Those people who are going to invest here can’t wait.Thanks.
This is looking cool.Thanks a lot for sharing.
Good!This is looking cool.Thanks a lot for sharing.
Excellent post thank you! Some things I hadn’t considered. Also Terry provides some very useful input above.
In all honesty I am not very patient.
I think a lot of people ignore this simple rules that most investors should always follow. Great post.
Well, I guess I will star predicting more often. I will start today based on 19 years of real estate sales experience. I will predict that 90% of the new home buyers are going to buy a house to live in and are going to wait after the elections to have a better view of where we are heading and what our leaders are going to do about it. Investors are going to be about 10% of the home buyers but they have to adjust their mindset about profits and a quick buck “still there but not as big”.
Sidney Manzo
Now a days the real estate company going to be as a money sucker, so I want to invest in it. It could bring me rich.
I needed boiled down to a single decision: that to start investing automatically. I set up an account with Vanguard and bought into their index fund, then set it up to take 150 bucks each month out of my checking account automatically.
Man I dont like the real estate business those all sucks.
I know this good, looking cool.Thanks a lot for sharing.