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12 Simple Tips For Beginner Real Estate Investors

by Brandon Turner on August 16, 2014 · 4 comments

  
12 Simple Tips For Beginner Real Estate Investors

1. Don’t blindly listen to me or anyone else. What works for me isn’t always going to work for you. You are in a different market, with different skills, and have different resources. Do what works for you.

2. If you don’t know what works for you, keep reading and listening to podcasts until you figure it out. We have 83 episodes of the BiggerPockets Podcast, and they are all free. Listen to all of them and I guarantee a plan will start to form in your mind. 

3. Remember: You don’t need to know everything about everything. You just need to know enough about the one niche and strategy you are going to get into. Don’t get overwhelmed with knowledge. Focus on what matters. 

4. Real estate investing is not a competitive sport. Ask for help from others. Build relationships. Learn from those with more experience than you. As the famous quote says, “You are the average of the five people you associate with most.”  Go associate. 

5. Get your spouse on board or wait.  Your marriage is worth far more than your net worth. 

6. Write out your business plan. This doesn’t need to be super formal, but it should be written down. Where do you want to get to? How are you going to get there? Without a road map, it’s hard to stay on the right path.

7. If you are buying a rental property, budget for property management, whether or not you plan on using it. If you can’t make money while still paying a manager, you aren’t buying an investment – you are buying a job. If you choose to manage, great! But don’t buy a job.

8. Do your math like your wealth depends on it; because it does. To help with this, try out the BiggerPockets Property Analysis Calculators. You’ll love them. Then do the math again. Be conservative in your estimates and don’t fudge the numbers.

9. Sweat equity is a good thing. Don’t be afraid to get you hands a little dirty if needed, but also understand that you don’t have to. Manual labor can be a good trade for cash, but it’s not the only way.

10. You will have problems, stress, drama. Don’t be surprised by it, but receive it carefully like you are catching a water balloon. Problems are a puzzle that you need to solve, not a dead end. Remember this when times get tough and it will help keep the stress down.

11. Treat your business like a business, not a hobby. Create systems, processes, and rules that govern how you do things.  Pretend that you will be handing your business off to someone else very soon – so you need to have a carefully defined process for doing things. This process will change – and that’s okay.

12. Share your stories, mistakes, lessons, successes, and more with others. We are all on this journey together!  The BiggerPockets Forums are a great place to do this!

Do you have any tips to add? Anything you would change? Let me know in the comments below! (That rhymed… I’m a poet and I didn’t know it!)

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{ 4 comments… read them below or add one }

Wendy Noble August 16, 2014 at 12:26 pm

Nice article:
Tip 5: Got my mom on board. My mom lives in the market where I invest and she has great fun going to view properties for me and gives me the low down on what maintenance needs to be done, what she likes and doesn’t like. She’s an older lady and the realtors, owners and current tenants warm up to her and she has a good chat with them (while collecting lots of useful information for me). Once, she was chatting to a tenant (an older lady who was renting from her daughter who owned the apartment) who was telling my mom all about the apartment including that the home owners association (it was a condo) was about to embark on a big capital project. I made sure I put a condition in my offer that all special assessments for the home owners association were paid before closing. Saved me a bunch of cash on that deal.

I don’t have a spouse but I couldn’t do what I do without the support of my family. My family have just come to the conclusion that I’m a little crazy to be this passionate about real estate investing, but their support is unquestionable. They always ask me the difficult questions which makes me go back and do my math over and over again (tip 8) but my mother has guided me away from more than one bad deal and caused me to tighten up my “policies and procedures (see tip 6).
So whether its a spouse or family, you need their support, you need them to be your sounding board and you need them to question you so that you are the best RE investor you can be.

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Kendall Todd August 16, 2014 at 7:58 pm

Nice post I especially like the part about having your spouse on board.

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Sharon Vornholt August 17, 2014 at 11:50 am

Brandon-

I love this article. These are alll great tips. I especially love #10. “You will have problems, stress, drama. Don’t be surprised by it, but receive it carefully like you are catching a water balloon. Problems are a puzzle that you need to solve, not a dead end….

So many new investors throw in the towel when those inevitable problems crop up. There will always be problems and our ability to solve them will ultimately be one of the reasons we succeed or fail.

Sharon

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Gabe Sanders September 14, 2014 at 9:10 am

Great advice. Most important to keep the personal emotions and personal taste separate when dealing with investment property.

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