If real estate investing were easy, everyone would be doing it. Let’s face facts. There are many tasks and action steps to be completed between where you are now in your current real estate business and the future version of yourself. It takes time to become well known by the community and create substantial value in multiple real estate deals simultaneously. Becoming a successful real estate investor does not come without investing much time, energy, action, education, and/or daily dedication.
6 Serious Questions to Ask Before Starting in Real Estate
1. Do I Have a Social Support System?
Confidence can be easily shaken, and businesses may be sabotaged with negative thinking and negative emotions. Be certain to surround yourself with similarly thinking, highly motivated, and positive real estate investors.
Oftentimes we can already think of who is negative, un-motivating, and weighing us down emotionally. Negative friends and family members can be an anchor keeping you from moving forward as quickly as you otherwise could have. Make certain to protect and prune your mental thoughts regularly.
Here is a quick key to categorize your thoughts:
- Thoughts and ideas that propel your real estate investing business forward may often be good.
- Thoughts preventing, hurting, or slowing down your real estate investing ability may likely be bad.
Pro tip: Make sure to network with other real estate investors here on BiggerPockets. Join the forums to chat and ask questions regularly.
2. Do I Know My Opportunity Cost?
Becoming a competent and profitable real estate investor takes a good deal of time and daily effort. If you choose to take on the responsibility and burden of becoming a successful real estate investor, then you are eliminating free time to dedicate to other areas of your life. Be prepared for early mornings and long nights, as well as stepping outside of your comfort zone on a daily basis.
Pro tip: Over the years, I have seen many well-meaning folks squander the effort they place into their real estate investing businesses, only to receive little to no results. These folks are not lazy; however, they are not committed or focused in real estate currently. If you know that you do not have one hour or more of free time multiple days a week, then focus on a more realistic and appropriate side business or hobby.
3. Do I Like People?
This one may cause some debate. With the help of the internet and real estate agents, you are able to purchase a piece of property without ever talking to a seller. Likewise, you are able to outsource repairs and resell a home while never seeing it or meeting the new buyers. However, for most real estate investors, there is genuine joy and personal fulfillment in solving people’s problems and helping buyers and sellers locally.
Pro tip: If you do not enjoy working with people or socializing with people, then fear not. Simply adjust your tactics and realize there are limited ways to invest without working directly with the general public.
4. What Niche/Focus Will Make Me the Most Happy?
Many of us already understand the importance of choosing a specialty while real estate investing. It is a foolish real estate investor who aims to be an expert in every real estate specialty. It is important to be happy in life, and your real estate investing business is part of your life. Make sure you choose a niche that suits you best.
Here is some criteria to consider while choosing your ideal niche:
- Which local markets are highly competitive?
- Which local niches in real estate are highly competitive?
- How much available capital do you have to invest in a future real estate transaction?
- How is your current credit?
- After talking with multiple sellers, what type of help is required from local investors?
Pro tip: Create a list of your top-five ideal real estate niches. Over the next few weeks, aim to take local investors in each niche out to coffee or lunch. By doing this, you’ll gain insight on specific types of investing. Become more educated than you currently are on the exact niches. Then proceed to choose the top one or two niches you believe will accomplish your goals and make you happy on a daily basis.
5. Do I Follow Through on Things?
An ability to follow through is crucial. Dreaming about being able to retire young or six-figure paydays may be fun, but the effort required is immense, challenging, and available to most folks who have enough ambition to consistently follow through until the goals are achieved or a better plan is realized.
Pro tip: I love this question because it is one that only you can answer for yourself. Keep in mind that if you lie on this question, you are only hurting yourself. The opposite of people who follow through on things are people who like to get started on projects and quit before completion.
6. Am I Incentivized by Rewards?
While starting out, many real estate investors do not receive a profit for at least a few weeks or months after beginning to invest. In addition, many of the daily actions and skills needed as a real estate investor require effort and discomfort as we grow into more competent investors. It is important to reward yourself. By using delayed gratification, you can encourage yourself to take daily action and push yourself to become an active investor daily. Goals = Rewards.
Pro tip: Create a list of goals (big and small) with deadlines. Next to each goal, think of an appropriate reward or prize that you will buy for yourself or give to yourself once this goal is achieved. Lastly, double or triple each goal before you achieve this reward. If, for example, you wish to set five appointments with sellers before eating chocolate cake, increase the number of appointments needed to 15 with sellers to achieve this same cake reward. Aim high in your goals. You can do it!
Remember that in order to be a successful investor, you simply can’t dip your toe into the pool of real estate investing. It is so important to become well educated and dive in safely and promptly.
What questions would you add to this list?
Let me know with a comment!