8 Steps to Starting Out In Real Estate Investing
My goodness if I had a nickel for every time I have been asked this question. It really makes me realize that with as much information that is available out there, that maybe there is just TMI (too much information). It gets to be overwhelming to the point that Newbies just end up not doing anything or WORSE end up getting involved in some b.s. $5000, $10,000 or $15,000 mentoring program and at the end of it – they still don’t know what to do! Oh the agony of hearing the stories from sweet innocent newbie investors who have finished being mentored by big name gurus only to still be left scratching their head.
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So How Do I Get Started as a Newbie in Real Estate Investing
I always start by telling them “well that depends on what your investing strategy is going to be”… and then the next question that I get asked is ” What’s an investing strategy?” ….oh my. OK. Let’s start from the beginning.
It’s almost like the chicken and the egg theory. Which came first? The chicken or the egg? How do I advise people that they need to be very choosy about where they spend the educational dollars and only spend money that pertains to their strategies – when they don’t have a strategy yet?
There are two different types of real estate investors. There is the passive investor who is happy to be investing in long term holds. They don’t even really want or care to go out and find the deals and negotiate them. They are happy to have good real estate deals presented to them and they will buy and hold. Then there is the investor who wants to be involved in the deals from A-Z. They market for the deals, the negotiate, they manage the repairs, the sell the house one way or another.
You don’t have to be one or the other. You can be both too! I get both types of folks asking me where to start! I think I might be able to get this information out in a nut shell.
The 8 Steps for Getting Started in Real Estate Investing
- First – figure out if you want to be “in the trenches” investor or a buy and hold investor. If you do want to be a in the trenches investor then you simply must get educated immediately. Don’t go and learn every single strategy for investing, but rather gear your education toward whatever the current market conditions are in your area. For me in L.A. it is REO’s, short sales, buying properties subject to, raising private money. I am currently working on my biggest undertaking yet- with a commercial property – BUT I have partnered up with someone so much smarter than me who has been commercial investor for the past 30 years! Depending on the deals, I am also interested in some buy and holds out of state. With these I talk to investors who have properties out of state that are turn key already when I buy them. I don’ t want to do ANYTHING like a “in the trenches” investor for properties that are out of state. I need to know I have a solid and strong out of state investor who handles all the ins & outs of the deal. If they can property manage for me too – then all the better!
- Network & Education. Meet as many people as possible all the time! Go to real estate meetings in your area and ask your investor friends who they are studying from and what they are working on. Who’s product has helped them a lot. Befriend as many experienced investors as you can. Ask them for guidance too. Don’t be a mooch though! Give something in return for their time and information. Maybe offer to help them in someway.
- If you are a newbie DO NOT, and I mean it! Do not go to a seminar or workshop that is a pitch fest and buy anything! When you are new- those guru pitches really are alluring and like compelling! If you do go – as I wrote in my last article – do not bring your wallet!
- Find a partner and/or internship. Talk to the successful experienced investors in your community and ask if they are willing to partner with you if you do all the work in exchange for them educating you. This is a very under used strategy as far as I am concerned. Experienced investors are really busy! They need a lot of help! Heck – I could use about 2-3 interns right now! Tell them you can be their marketing assistant or their bird dog, or go out in the field and take photos for them, or go run and get their car washed and dry cleaning in exchange for education and guidance. I would love to have more help! You never know until you ask people!
- If your local real estate club has classes for newbies – like a “getting started class” or an intro to creative real estate class, sign up and take them!
- For goodness sakes – get yourself some business cards. There is nothing worse than meeting an investor and they can’t give me their card. Sure the exceptions – like when you are already a successful investor and everybody knows who you are. But when you are new or newer – get yourself some freakin’ business cards por favor.
- Having a passion for real estate really helps. Or at least be very business oriented. Real Estate investing is a business. If you don’t have a passion for it or are not business minded you will not last. In my years I have seen people come and go in this industry. It is truly the folks who are passionate for real estate – or those who simply recognize it as a great business to be in and treat it as such – who last.
- Don’t be flaky. Don’t be lazy. There is nothing worse than newbies who do not commit and do the hard work that is takes to getting their career off the ground . Yucky caca poo poo. Please – be willing to work hard, pay your dues, educate yourself. Real estate investing is not a get rich quick scheme. It will take a lot of hard, continuous, never ending work… but the rewards are worth it. As a matter of fact – you simply MUST have the strong drive and steadfast ambition to make it in this business. It is not for the faint of heart. You will have a lot of ups and downs and in the beginning you will feel like you are getting nowhere fast. But trust me…. you do the work – it will pay off!
Personally I love this business! LOVE IT, LOVE IT, LOVE IT! I couldn’t think of a better career….. If you see the vision of being a successful real estate investor and the huge opportunity – then you will love it too! Yippie!
Photo Credit: extranoise