I began walking just minutes from childbirth.
I walked right out the door as my mother was being carted out in a wheel chair. The doctors were amazed.
By three months old I was power walking around my local shopping mall (with sweat pants), by six months old I was running side by side with my old man, and by one year I had completed(and won) my first Boston Marathon. It’s all been easy since then.
Of course this isn’t true.
I doubt I could do more than burp and cry by one year. I didn’t begin walking till almost two, and I still have trouble running to this day (that coordination is a tricky thing…).
Forgive my earlier lie (you didn’t believe me, I hope) but I bring it up to illustrate a point:
Learning to walk takes time.
Learning to walk takes patience.
Learning to walk takes determination.
I can guarantee there isn’t a soul reading this article who didn’t fall down many times before finally getting the hang of walking. Many of us still fall down often for no apparent reason (I swear, that sidewalk just moved on me…) No one is born with the walking talent but it must be learned and experienced by each and every person.
The same applies to real estate investing. It’s not something you are born with. Sure, maybe you are naturally good at math or built like an ox so remodeling is a one man job. The career, however, is a learned process. Like my parents pulling me up by my arms and encouraging me to take my first few steps, investors must also take those steps and learn how to invest.
I am often asked by readers of my blog, “What are the first steps I should be focusing on?”
While this question largely depends on the type of investing one wants to engage in, there are a few key steps that every investor should try to take early in their journey. These are not rules, just helpful guidelines. If you are an active investor, please feel free to add more tips below in the comments. And if you aren’t an active investor – well, comment anyways. I like feeling popular.
Read, Read, and Read Some More
I’m not kidding. Read… a lot. Don’t tell me that you don’t have time to read. Unless you’ve thrown your television and computer away, you probably are not that busy. Consume the best real estate books you can find. Internalize the lessons learned by teaching your spouse, parent, roommate, or best friend everything you just learned. Even if you don’t like to read, download the audiobooks and listen in your car. Read the BiggerPockets forums. Read this, and other real estate blogs. Read, read, read.
Reach Out to Other Investors.
One of my favorite quotes of all time was found in The Four Hour Work Week:
“You are the average of the five people you associate with most.”
If you want to be a real estate investor but spend the vast majority of your time with your World of Warcraft video game guild – you probably are a pretty great gamer but not so hot in the investment (or lady) department. I’m not suggesting that you abandon your friends – but open your mind (and schedule) to the people who you want to be like.
The “rich” are often accused of being snotty and separate, but the simple fact is – the rich enjoy spending time with people who like the things they do. Therefore, if you want to build wealth through real estate – make friends with those who build wealth through real estate. BiggerPockets is one of the best ways on planet Earth to do this, because you don’t even need to put clothes on (yeah, that’s a little weird). Real estate clubs and landlord associations are another great way to meet other investors (but please, wear clothes.)
Furthermore, what do you bring to the relationship? What are you good at? If you are great at web design – why not offer to help an investor with their website. Do you like building things? Why not help an investor remodel a house. Are you just really fun to be around when intoxicated? Well, I’m sure that’s an asset somehow. However you do it – connect.
Begin Planning Your Escape
If you are looking to get out of your day job and into real estate, you need a plan. This life transformation will not happen by itself. No one is going to give you the keys to your financial freedom. Instead, you need to take it.
Begin with a piece of paper (go ahead, I’ll wait…)
Where are you today?
Where do you want to be in five years?
What will you need to have in order to get to that place in five years?
Chances are, you are going to need money. You probably are going to need good credit. Those things you can begin assembling today.
You will also probably need property. Begin mapping your journey. It’s okay if you don’t know every part. Making the plan is half the battle.
Let’s walk through one together. If it’s your goal to leave your job by making $4,000 per month in passive income within five years – write that down.
Next, how many properties does that equate to? I suggest- at minimum – to achieve $100 per month, per unit in passive cashflow. This means that after every bill is paid, including setting aside money to pay for vacancies and future repairs, you have $100 per unit in your pocket (for more information on this, see The 50% Rule in the forums). So how many units does that take to get $4000 per month?
Now we have a concrete number to work toward. Forty units that meet your minimum requirements. Whether you are buying single family homes, duplexes, small apartments, commercial properties, whatever.
Don’t get overwhelmed. Forty units is not that bad. Not when you have five years to do so. Perhaps begin with a house, then a duplex, then a small apartment, and finally a large apartment. With each purchase you will gain experience, relationships, and knowledge.
It does get easier.
Walking Through Your First Investment
I didn’t start walking at birth – and neither did you. I also didn’t suddenly become a real estate investor.
I learned, I grew, I worked.
I took steps. Small ones, which gradually became larger, and now I feel I can finally keep a steady jog through the real estate investment world. Don’t be discouraged if you haven’t yet begun taking those steps. You don’t need money to begin. You don’t even need a lot of time. They are called “baby steps” for a reason – because they are easy.
If you are struggling to get out and make your first steps – you aren’t alone. However, don’t let that fear keep you from experiencing one of the best and most rewarding careers out there. Real estate investing is not easy, but it is not a complicated game either. Begin taking those steps right now and sooner than you realize you’ll find that walking isn’t really so hard.
Image: seandreilingerYour First Steps as a New Real Estate Investor by Brandon Turner