What Infrastructure Should You Have in Place Before You Buy That First Property?
Having the right infrastructure in place can mean a lot of things. It can mean who you have on your team, who your real estate agent or property manager is, or what maintenance person or contractor you hire. It can also mean what kind of accounting structure, bookkeeping, or legal strategy you have. There are a lot of different ways to segment having the right infrastructure. Today, I'm going to talk about infrastructure, and I'm going to share the things that I've done, the mistakes that I've made, and something you'll be able to use moving forward. I don't want to go into too much detail because it can become overwhelming, and I prefer to stick to the basics.
Want more articles like this?
Create an account today to get BiggerPocket's best blog articles delivered to your inboxSign up for free
Do Your Due Diligence—But Not to the Point of Inaction
Ultimately, the most important thing is you just have to start. The more that you get consumed in the various legal structures, accounting and depreciation, and various markets and investment strategies, the more you’ll think yourself in circles. Still, make sure you do your due diligence. Get online and immerse yourself in anything and everything real estate-related. You have to then select a strategy that fits your desire the most. Once you find that specific strategy, scratch the surface from a legal and accounting standpoint. Now, please understand that every accountant and every attorney has their own ways of perceiving the law and tax code. Not all of them are right and not all of them are wrong, but I think you should get multiple opinions from multiple people. Once you start to get the same answer from everyone, you can start to determine the right way to proceed. Just be sure to set up relationships with a few key influential people who can help you on that journey.
Related: 4 Ways Systems Make Landlording Easier, Simpler & More Profitable
You have to start. Simple as that. Stop procrastinating. Stop spending years of doing research. Time is going to fly by, the opportunities are going to vanish, and you’re going to be left with a bag of crap called “I haven’t done anything.” I believe that gaining firsthand experience, even if you make a mistake, will make you better. You will learn from that mistake, and you won’t repeat it again. You’ll keep growing and get bigger and better with every transaction.
Learning From Mistakes as Your Business Grows
Personally, when I started investing, I did not have the right infrastructure. I didn’t work with the right people, I didn’t have the right legals in place, and I didn’t do bookkeeping or accounting. I’ll tell you what: It came back to bite me five years later. It was a nightmare trying to get these things in place. I had to do a full-blown corporate restructure. I had to do all kinds of crazy accounting and bookkeeping to make sure all the ducks were in the right row.
Now, I have no regrets because it made me better and who I am today. I’m running multiple companies so the operation is huge, and I guess that’s why I made a lot of mistakes—it’s very hard to catch it all. I’m not sure how many of you out there have desires to scale to 100 deals a year as I did, but when you scale that big, a lot of things happen that you need to fix. But again, ultimately, you have to start. That is my message to you today. And if you don’t start, you’re going to be scratching your head in the years to come regretting not starting. You’re not going to regret the mistakes that you’ve made—you’re going to regret not starting.
So when it comes to the infrastructure, everyone is going to say there are different segments to it. I think that you should fully immerse yourself in everything real estate. Pick your specific strategy, scratch the surface as best you can from a legal and accounting perspective, set up relationships with the right people, then just start. Start slow, start small, make mistakes, learn from the mistakes, and don’t repeat them.
That’s my two cents for you. I wish you all the best and much success.
If there’s anything that I can do for you or I can help you, comment below.
I’m pretty well versed in a variety of real estate investment strategies. I’d love to tell you what I’ve done well and done wrong.