I get emails and calls all the time about people wanting advice on how to invest in real estate. It is sort of flattering, like I have some sort of insider knowledge of the markets or what property or type of asset is the best investment today. But I am always willing to share my knowledge. Even more interesting are the investors who say something like, “If you find a property that I can make a quick $50K on, call me. I have the money to invest.” Want more articles like this? Create an account today to get BiggerPocket's best blog articles delivered to your inbox Sign up for free If I see a property with a $50K potential, it’s mine — and no one else’s if I can help it. I get people who contact me with things like this. “I have a goal to have 100 rental properties within 10 years. I have $10K to invest now. How should I start?” I admire the goal setting, and I appreciate the fact that someone can think big. Unfortunately, if that is your way to riches in real estate, your bubble will soon be popped. Do You Have What it Takes? There are many different ways to invest in real estate. I personally do rentals and have done a flip. I have also sold real estate. All my rentals had to be 100% remodeled after I purchased them, so I know a lot about rehabbing. If you are thinking about any self-managed real estate, you also need to know a bit about rehabbing. Once you can rehab a property, the world of real estate can get very interesting and more financially rewarding. If you have money, it is easier to invest in real estate. It does not mean your experience will be better, just easier. Buy a property across town, hire a property manager, and wait for the money to roll in. Or you may wait for the property manager to call and ask for a check to rehab your property (again). You may luck out for a year or two, but the proof will be when you have had to experience a property turn. If you do not know how to manage properties, you have no business hiring someone else to do it for you. Get some knowledge first, so you can manage the manager. Related: The Rewards of Commitment: Why You Should Learn to Do Your Best With the Skills You Have The Top 7 Sacrifices Real Estate Investing Demands 1. Living Below Your Means To be a RE investor, you need to live below your means. You will need some capital to start; you do not get capital built up by spending all you make. You will need excess capacity on your credit line to be able to get a mortgage. No bank will loan money to someone who is already maxed out. If you have enough money to make a cash purchase, you will be at the top of the list in terms of buying potential. The seller does not have to wait for any approvals, worry about appraisals, or deal with a mortgage company that freaks out about a place that is not habitable. When I bought my first property, the down payment was over $80K, and I needed another $40K to fix it up to rent. 2. Committing Capital, Labor, or Both There are no free lunches in real estate. You either need capital or labor. Or even better, both. The problem is how to get started. Most people do not have the fortitude or the money to be a real estate investor. It is a high risk game — with big rewards. Money makes the game easier, and labor helps preserve the capital. Doing you own labor also gives you knowledge for the next deal. If you are going to work anyway, why not work for yourself? If you are going to hire someone, why not hire yourself? 3. Spending Time & Effort on Education BiggerPockets is great, but reading it alone will not get you there. Take some classes in RE education. In my area it takes about $1K in tuition to become a RE agent. It is money well spent, even if you do not actually get a license. If you do get a RE license, it will give you access to a commission when you buy a property. 4. Learning to Do the Work Yourself For about the same amount of money as a real estate course, you can take classes that will gear you up to be a contractor. You do not actually need to get the license; you need to get the education. I hear from investors who are doing 10 flips a year: "You need to have a team." Or: "I am too busy to do my own work; I can make more doing other things." These are true statements, but not for someone starting out. Once you have the knowledge, you can remodel your own properties to get experience. If this sounds like work, it is. If not, they would call it fun. 5. Using All the Time You Have Available When was your last vacation? If you spent it in the Caribbean somewhere, you could have used that vacation money on a down payment instead. You could have used that time to take a class or do a remodel. If you called in sick from your real job because you needed a mental health day, you could have used that time to paint a kitchen rather than watch TV. Take a week of vacation and work a side gig to get extra money. Save money by changing your own oil and mowing your own grass. Make money mowing your neighbor’s grass. If I added up all the 100+ hour work weeks I completed while working on my rentals, I would probably die from exhaustion. If you cannot take a week of vacation and work on improving your RE investor skills, you might want to try babysitting instead. 6. Being Willing to Make the Right Choice for Your Business What kind of car do you drive? If you are a real estate investor, a truck will do you better than a BMW. Get a real truck, one that can carry a piece of sheetrock, a piece of plywood, or a countertop. Try that in a beamer. If you cannot drive a truck because you are too vain, stay out of the real estate game. A truck will say something like “half-ton” or better. I drive a F-350 diesel. If you have to have a BMW and cannot afford a truck, you might want to skip RE investing. Use your RE license to sell real estate, not invest in it. Related: How to Do The Hardest Thing In Real Estate Investing 7. Spending Time at Investor Meetings When was the last RE investor meeting you attended? Odds are, you do not attend them. You may not ever find a deal in one of those meetings, but there are contacts to be made. There are bird-doggers, people with money, people who have done things in real life. Some meetings have seminars to build knowledge; some meetings have games to develop mindsets. One common theme is that all the people attending want to learn more about real estate and are willing to do something to achieve it. If you are not willing to put in the time and effort that is required, you can just wait for me to throw you a deal you can make a quick $50K on… [Editor’s Note: We are republishing this article so our newer members can enjoy it!] What have you been doing, or did you do, to get ready for your real estate investing career? What did you find was more important, labor or capital? Leave a comment, and let’s discuss!