Real Estate Investing Basics

Are You Getting Ready to Get Ready to Invest in Real Estate?

Expertise:
110 Articles Written

He was hungry.  Not literally, of course.  Although tall and lean, I doubt he’d missed many meals.  No, Eric Sage was hungry in the “I’m miserable at my job and will do anything to change my financial situation” sort of way.

Want more articles like this?

Create an account today to get BiggerPocket's best blog articles delivered to your inbox

Sign up for free

At the time Eric had very little time, education, or money.  But that didn’t matter.  He was determined to become a successful real estate investor.

Eric found a list of homeowners in foreclosure and started knocking on doors – after work each night and on the weekends.  It didn’t take long before he met a homeowner that said “yes, I’d like to sell my house to you.”  And here’s the funny part.  Eric had no idea what to do next.

But I did.

Eric and I had been friends since high school.  He knew I was a real estate investor.  So he called me up and asked if I’d be interested in the property.  I looked at the numbers and determined that Eric had found a very profitable deal.  I showed him how to put the house under contract and assign it to me.  We agreed on a fee.  I closed it and later flipped the house to a retail buyer.  Eric and I both made money.

That was 8 years ago.   Eric eventually figured out how to do it on his own and didn’t need me anymore.  And that’s fine.  He helped me make money and I taught him the business.  Talk about a win-win.

What Eric lacked in time, education and money he made up for in raw determination.  He refused to let a lack of resources keep him from reaching his goal.

So what about you? Are you getting ready to get ready to invest in real estate? Is a lack of time, money, or education holding you back? Are you waiting to get started until your business cards are printed? Or maybe you're perfecting your door knocking script? Could it be you want to have your "team" in place (i.e. contractor, title company, Realtor, accountant, attorney) before you begin? Perhaps you want to get to know your market a little better. Or maybe you're just scared because you don't know how to write a contract.

Forget about all that stuff.  Take immediate action.  Get out there and find a profitable deal.  If it’s good enough an investor like me will have the resources necessary to get it closed.  And get you paid.  More importantly, you’ll learn something in the process.

Stop getting ready to get ready.  And remember, ignorance on fire is far more powerful, and profitable, than knowledge on ice.

    Anonymous
    Replied about 8 years ago
    Real estate is really one of the best industries to delve into if you want to make money. And with your story about “Eric,” I bet many people are deeply encouraged! Lack of money, education and time is really not a hindrance to making your dreams come true in this field. Just like Eric, all that you really need to have is determination. It is also best that you look for trusted and reliable people who knows the ropes of the business. This person will let you learn everything about the business which you will be venturing into.
    Marty Boardman
    Replied about 8 years ago
    I got into real estate because it didn’t require an engineering degree, high IQ, or athletic skill. For the common man, or woman, one of the best ways to build wealth and create financial freedom is through real estate investing.
    Jonathan Blackwell
    Replied about 8 years ago
    Agreed, get out there the deals are everywhere. Even with limited funds, there are several conventional renovation loan products you can use to fix and flip a property without having to pay cash or use hard money. Much safer investment than the stock market right now! 😉
    Jonathan Blackwell
    Replied about 8 years ago
    Agreed, get out there the deals are everywhere. Even with limited funds, there are several conventional renovation loan products you can use to fix and flip a property without having to pay cash or use hard money. Much safer investment than the stock market right now! 😉
    Marty Boardman
    Replied about 8 years ago
    Jonathan, as Eric proved the only thing you really need is a burning desire to succeed. The resources are there, you just need to know where to look.
    Teyona
    Replied about 8 years ago
    It’s just a matter of bravery in investing and a full knowledge in Real Estate business in order to be successful in this industry. Let’s just have a positive attitude towards it.
    Marty Boardman
    Replied about 8 years ago
    Teyona, it’s true that many people are risk averse. It takes guts to invest in real estate. But then again, it takes guts to venture into any new business. I’m curious how you define a full knowledge of real estate? I’ve been at it for more than 10 years and I learn something new all the time.
    Jonathan Blackwell
    Replied about 8 years ago
    Cut the learning curve by having a good team behind you; Realtor, Lender, Contractor, Home Inspector, etc.
    Marty Boardman
    Replied about 8 years ago
    Jonathan, I got started in real estate, and Eric did to, without a Realtor, lender, contractor or home inspector.
    Marty Boardman
    Replied about 8 years ago
    Jonathan, I got started in real estate, and Eric did to, without a Realtor, lender, contractor or home inspector.
    Jonathan Blackwell
    Replied about 8 years ago
    Cut the learning curve by having a good team behind you; Realtor, Lender, Contractor, Home Inspector, etc.
    Lisa Calhoun
    Replied about 8 years ago
    Do you have to be a licensed Real Estate Investor to do this legally? Go out and find foreclosures and write a contract and assign it to take it over and make money on the deal when it goes threw?
    Marty Boardman
    Replied about 8 years ago
    Lisa, you do not need a real estate license to put a house under contract in your name, or your LLC’s name, and assign that contract to another buyer. I’m no attorney so check with one in your state before you begin. But here in Arizona it’s legal.
    Lisa Calhoun
    Replied about 8 years ago
    Ok thanks for the information and I live in Calif. What is the LLC stand for?? I am sorry new to this but so excited about getting started. I know the best way to learn is to just jump in there and do it. I learn more by doing it.
    Marty Boardman
    Replied about 8 years ago
    Lisa, an LLC stands for limited liability company. You don’t need one to get started. However, after you make a few bucks on a couple of deals it would be a very good idea to set one up. Of course, seek legal counsel first.
    Lisa Calhoun
    Replied about 8 years ago
    Ok thanks so much for the information and advice Marty. Greatly appreciated. 🙂
    Marty Boardman
    Replied about 8 years ago
    Lisa, an LLC stands for limited liability company. You don’t need one to get started. However, after you make a few bucks on a couple of deals it would be a very good idea to set one up. Of course, seek legal counsel first.
    Brian Hoyt
    Replied about 8 years ago
    Thanks for the post. I just bought my first house cheap cash and got a signature loan from the bank to get it rent ready. Once it starts renting it will increase my rate of savings for the next one and so forth. I bought it from a wholesaler and can see from the process how you really can start with even no money if you can find the right sellers and have investors ready to buy – just post on craigslist and you’ll meet the people you need to meet. Even better if you already know people. The house we bought had vultures all over the thing and I could see how easy it can be to wholesale – if you find the right deals. I will probably apply the wholesaler method to acquire my next property so I don’t have to pay an assignment fee – and maybe, just maybe wholesale it instead of holding it.
    Marty Boardman
    Replied about 8 years ago
    Brian, congrats to you on making something happen. We too have found Craig’s List to be a great way to find buyers and sellers. Excellent tip.
    Mark
    Replied about 8 years ago
    This is a great story and really shows the key when it comes to being successful: get off your butt and just do it! You can learn on your feet and get things done at the same time. Find yourself a mentor, take classes, but most importantly start doing it yourself. Experience is by far the best teacher out there. Great post!
    Marty Boardman
    Replied about 8 years ago
    Mark, couldn’t have said it better myself. It’s like they say at Nike, just do it!
    Matt Mathews
    Replied about 8 years ago
    Having a mentor is the key to overcoming one’s fear! Find that person FIRST! Then go find a property. Faith is the one power against which fear cannot stand! I believe, I believe, I believe!
    Marty Boardman
    Replied about 8 years ago
    Excellent advice Matt. I’ve learned that the only thing an experienced investor likes better than a profitable deal is the motivated individual that found it.
    Leo Kingston
    Replied about 8 years ago
    There is no doubt that real estate investing is similar to an apprenticeship for a trade. You have to learn by watching. You can read all the books and take loads of courses online, but there’s nothing like jumping in feet first because no matter what happens, you’ll learn something. And that’s valuable. It’s more valuable than other people’s books and courses.
    Marty Boardman
    Replied about 8 years ago
    Leo, excellent analogy. I often refer to my first year working with a local real estate investor here in Phoenix as an apprenticeship. This experience was far more educational than any of the books and tapes I bought over the years.
    Shay Mitton
    Replied about 8 years ago
    Marty, Outstanding post! I was getting ready to get ready since the beginning of the year. Did I have a lot of things going on? Was I working full time? Yep. You better believe it. But, once I pulled the trigger ( while I had a lot of things going on ) I scored a deal within 3 weeks. I have one more in my sights now. Do I still have a lot of things going on? Am I still working full time? Yep! So what am I doing now? More real estate. And thats the point. Im actually out there doing it. Not getting ready to do it. The learning cure is much faster, and profitable too. Whats next? Reloading! Thank you for the post.
    Marty Boardman
    Replied about 8 years ago
    Shay, we’re all busy. As you’ve discovered it’s no excuse for not getting started. Life will always get in the way if you let it.
    Jason Homes
    Replied about 8 years ago
    To achieve what we want we must take action! Do something, it only takes loads of determination to do it.
    Eric C. Fahrner
    Replied almost 8 years ago
    I was always waiting for “the perfect time” to get into real estate & real estate investing, while continuing to work my J. O. B. Then, I woke up one day and looked into the mirror and saw my dad’s face. I was over 40, and I noticed that “the perfect time” never seemed to come. I realized that there IS no such thing as “a perfect time” for anything. So there’s no point in waiting for it. Just gotta get out there and DO it!