Are you looking to break into real estate investing but don’t know where to start? How do you get leads? How do you walk a property? What about making an offer?
These are just some of the questions that frighten new investors away from ever getting started. But you don’t have to worry anymore. This article will answer those basic questions, readying you to get your investing career underway.
The best thing about this strategy is that you don’t need a whole bunch of money to get started. I know because I started out with just $2,500. I got my first deal with $1,500, and I’m on the way to doing another two with the rest of that $2,500.
What you do with these deals will depend on the capital you have and the type of investing that you want to do. I have chosen to fix and flip my first property and wholesale (or wholetail) the other two. This will give me more capital moving forward to double my advertising efforts and get more homes under contract.
With that, here I lay, the pathway forward!
Before we continue with the path toward your first deal, I would like to preface everything with this: This is not a get-rich-quick scheme. As you will find in the next section, we are trying to build a business here—one that is going to last us a lifetime.
The first deal you get is not going to make you rich, nor will it allow you to quit your job. It is going to set us up for making more deals in the short-term and creating a flow of leads that will ultimately allow us to become full-time investors (if that is what we desire).
It’s a Business—Treat It Like One
First things first, investing in real estate is not to be entered into lightly. There is much money to be made, but if you aren’t taking it seriously and really treating it like a business, there is a lot of money—and time—that can be lost.
You don’t have to be a full-time investor to treat your investing like a business though. Most of us who invest are working other jobs to bring in the income that we need to survive every day (at least to start).
There is a mindset shift that needs to happen in order for us to truly think of our investing as a business. We need to realize that there are a lot of things that are not worth our time and effort. This is where we are going to use some of that $2,500 to hire out menial tasks that would either be too time-consuming or require professional experience. These things range from designing a logo to creating a landing page for the advertising we are going to run.
Start Building Your Brand
This process should take no more than two weeks if you are diligent and focused on completing the necessary steps, which are laid out below. These are the first 15 days of your 45 days to purchasing your first investment home.
The first step in this may not be necessary, but I feel like it is an important step when getting in the mindset of running a business. Choose a name for your home-buying company. You really have a lot of leeway here, but it is best to come up with a name that is not already taken (this may seem obvious to some).
The name should also explicitly state that you are a homebuyer. Ultimately, you’re going to want to build a simple website, so I recommend coming up with a name that’s also available as a domain. For example, don’t choose We Buy Ugly Houses when www.WeBuyUglyHouses.com is taken.
Purchase your domain once you have come up with a business name. They are usually less than $20 when you buy from a hosting source like GoDaddy or Bluehost.
Create a Look
At this point, hire someone to design a logo for the home-buying company. This logo can be used for things like t-shirts, your website, and business cards.
There are many places online where you can hire a freelance artist to do this. Fiverr and Upwork are a couple, but there are many, many more. Plan to spend around $50 to get a quality logo made.
Separate Personal From the Business
The logo design will likely take about a week, so make some other business decisions that will separate your personal life from your business life in the meantime. Set up a G Suite account with Google. Create email addresses that have the business name after the @ instead of google.com or yahoo.com.
This will make each email sent to potential sellers a lot more credible, and the account will be a one-stop place for all investing emails to be contained. I would suggest a minimum of one with [email protected] and one with [email protected] or [email protected] These will run about $20 per month.
The last piece before you begin to seriously start marketing is buying a business cell phone. Don’t fret! We are talking about a very cheap phone with a very basic monthly plan.
The phone itself can be purchased for less than $25 and the plan runs about the same. All you need here is call and text capability with a small amount of data. You’ll be using this phone strictly for talking to sellers and emailing. Don’t waste your time and business money scrolling through social media; use this line for business only.
Now it is time to start generating some leads. For this, I recommend the all-powerful Google Ads (formerly called Adwords). For me, I decided to find someone who knew what they were doing in the space and hire them. It just so happens that this person gave me the first month of service free—but I feel like that is an important component. The first month of advertising on Google, you’ll get leads, but you are learning exactly what people in your area are searching for and clicking on. That is why a professional will offer the first month free. They want you to get solid leads in and come back for more the next month.
The following months will end up costing around $1,000 each. Take this into account for your future marketing budget. The idea here is to start getting leads coming through and to close on a sale. Then, use the proceeds of this sale to fund the next advertising campaign at double the effort.
Remember, this is a long road you’re traveling down. You’re not going out and buying a brand new car with this first deal.
Sign a Contract
So, you have made or received some calls, seen some houses, and put in some offers. Now it is time to get that contact signed. You want the seller to sign the contract as soon as it is presented to them. You should already have gotten a verbal confirmation that the seller would accept the offer that is going to be written on the contract, so the hardest part here is getting them to take the five minutes to sign it.
It is highly recommended to do this part in person so you can go over the details of your contract face to face with the seller. But if that is not an option then you should be on the phone with them, explaining exactly how your contract works. You can get a contract online for free—or even write it yourself.
There are a few details that you want to make sure are in the contract though. Some might be very obvious:
- Buyer and seller names (all who are on the title)
- Purchase price
- Date you want to close (I like 10 days from signing contract)
- That the contract is assignable (meaning that you can sell it to someone else aka wholesaling)
- The right to terminate the contract based on an unfavorable inspection (mine says “buyer can back out of contract” on the bottom)
Once you have gone over the contract with the seller, get it to them and make sure they know time is of the utmost importance. You cannot start the process of purchasing their home until you have the contract signed.
You will then sign it and provide them a copy with all signatures on it. And then the fun begins!
Disclaimer: By no means can I guarantee that if you follow these guidelines, you are going to get your first house within 45 days. But I strongly believe that you will. I have had excellent results thus far and will continue to modify and adjust as demand grows and shifts.
Where are you on your investing journey? Are you stuck? Can I help you get un-stuck?
Let’s talk in the comment section below.