Real Estate Investing Basics

As a Long-Time Real Estate Investor, Here’s What I’d Do Differently If I Was Just Starting Out…

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Seasoned investors: If you could do it all over again, what would you do differently?

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As someone who has been in the real estate investing industry for more years than I'd like to think about, I often get asked that question. Wouldn't it be great to have the opportunity? The chance to do it again with the knowledge and experience I have today?

Of course, I can’t do it all over again—but I can provide suggestions for those just starting out.

So, what would I do differently, and on the flip side, what things did I get right and wouldn’t change?

What Would I Recommend to New Investors?

First, let me start with a few tried, true, and timeless investing pearls of wisdom. These are things I think most investors would say they wish they had done differently. These pointers stand the test of time, regardless of the market conditions when you start your real estate investing.

1. Start investing earlier.

This is the most obvious one— just about everyone I know wishes they had started earlier. Time is on the real estate investor’s side. We all know the market has its ups and downs, but the sooner you get in, the easier it will be to ride out the bumps.

I feel like I got in at a good time, but I would have been able to buy properties even cheaper if I had started earlier.

Group of young people learning in a classroom one girl looks toward camera the rest are hovered over computer

2. Use debt more aggressively.

This one dovetails with starting earlier. If you start early, you likely don't have a ton of cash. So, you need to leverage other people's money.

And when you start earlier, you can take on more risk. If some of the deals don’t work out, you’ll have time on your side in terms of recovering.

3. Take more risks early.

This one also ties into starting sooner. As mentioned, if you start early, you can take more risks because you have time on your side.

What Would I Have Done Differently?

Next are things I specifically would have done differently.

1. Limit the geography of properties.

We own properties in five states. I would put more money into fewer markets if I had to do it all over again.

It has been a lot of work to manage properties in so many locations. We have made money for our investors in the process, but we probably could have grown faster if we hadn’t been as stretched by managing this number of locations.

2. Delegate sooner.

I have built a team over the years, but we probably could have grown faster if I had done this sooner.

Related: 5 Smart Tips for Outsourcing & Delegating Work in Your Real Estate Business

3. Expand into commercial buildings (from single family homes) quicker.

Our commercial projects have done very well. I wish I had started this expansion sooner, as there is less competition from buyers in the commercial space.

Storage facilities with blue doors. Interior units. 3d rendering

4. Leverage technology better.

Especially today, technology can be a fantastic tool for investors. But getting the right technology and knowing how to use it and leverage it to its fullest can be a challenge.

We started out using Propertyware and found it too complicated. So, we switched to Buildium for a while and soon found it too simplistic—and ended up switching back to Propertyware.

This switching was painful. I wish I had taken the time to learn Propertyware better from day one to avoid this pain.

What Wouldn’t I Change About My Investing Journey?

Finally, here are a few things to help you get it right from the start, most of which I had the good sense to do and wouldn’t change.

1. Just start.

This can be one of the biggest hurdles for many. You just need to start. And the sooner you do the better.

Related: Hesitant to Invest? Hack Your Way Out of Analysis Paralysis

2. Get educated.

No need to reinvent the wheel here. There are many educational opportunities to take advantage of.  And with so much technology available today, it is easier than ever to educate yourself.

young smiling african american businesswoman with coffee cup in city

There are webinars, podcasts, investment groups, and more. Of course, many “educational” programs are ultimately trying to sell you something. But even so, much can be learned with little to no cash outlay.

3. Get a mentor.

A mentor can be an invaluable asset. Believe it or not, there are people out there who are willing to share their expertise—just out of the goodness of their being—without wanting anything in return.

If you can find one, stick with them and learn as much as you can. Especially if you are on your own, having someone to bounce ideas off can be a tremendous asset.

4. Stay focused.

I attribute at least some of my success to focus. I had a plan and stayed true to that plan in terms of the type of properties I wanted to invest in and my investment strategy.

It can be easy to get side-tracked as opportunities come along. So I would say, be clear about your goals and objectives, set your strategy, and then stay the course.

Conclusion

Real estate investing is a great business to get into, and I’ve been fortunate. Looking in the rearview mirror, there isn’t too much that I would do differently if I had to do it all over again.

Any tips you’d add to this list? Questions for me? 

Let’s talk in the comment section below.

Ian Colville is the Managing Partner of CCM Finance. Ian is a native of Minnesota (born in Rochester). He brings both a formal education (BA in Economics and MBA) as well as industry experience to ...
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    Ryan Schroeder Rental Property Investor from Saint Paul, MN
    Replied 9 months ago
    Good read Ian, I probably agree with your list except that I cannot comment on the commercial asset piece (don't own any). What I would add to the education piece is to get completely educated on any market one enters. My very first mistake was assuming the St. Paul and Minneapolis markets were the same. They weren't 30 years ago and they aren't now. It is much easier to research that now than it was in the 1980's but knowing more about the asset side (what is a property worth/Sq. ft.) and what rents neighborhoods can command would have been very helpful (I spend a fair amount of time on both of those these days). Under "mentor" I'd probably expand that to building relationships across the spectrum. It's been helpful, when I've been faced with a problem, to be able to contact experts in the trades (plumbers/electricians, carpenters) or services (real estate, legal) to gain their free advice from a phone call. I, of course, return those favors in my areas of knowledge.
    Wenda Kennedy JD from Nikiski, Alaska
    Replied 9 months ago
    I too started this journey many moons ago. When I started, there was no information readily available for me to follow. Now, with the internet and the fall of the gatekeepers in the publishing industry, the information is all out there to be plucked and used at will. The real question is how would I have done it differently at this moment with the current set of rules. I think I would have started by buying small units -- lived in them as owner-occupied units while I rented the balance of the building -- and then moved on to another property when I was able. And I would have built up from there. I was doing "flips" in the Los Angeles ghetto when we still called them equity purchases. I did move up to apartment buildings and then to small commercial buildings. Then there was this riot... that changed everything... I've made fortunes and lost fortunes. Now I understand the business cycle, the debt cycle, and the real estate cycle. I didn't understand any of it then when I was a young pup. I just went with the herd, much to my detriment. And I personally learned how much a divorce in a community property state can cost. This is all stuff that I can't seem to convey. I haven't been able to have much influence on the real estate investors around me. They are really into OPM (other people's money) right now. I keep trying to explain what happened in the business around 1990 when the market took a nosedive. And when I tell them that in 1976 interest rates on my first house were 9.5%, they just don't believe me. Or they reply that it can't happen again. Then I explain that interest rates went to more than 21% in 1980 and their eyes glaze over. Yes, there are some things I would differently now. Most were a decision at that moment, using the best information that we had at that time. I must rest in that reality.
    Eric Han
    Replied 9 months ago
    Well received! Thank you for taking the time to write up your journey.
    Rochelle Jordan from Las Vegas, Nevada
    Replied 9 months ago
    Hello my name Rochelle I'm retired and also a veteran.i have going to seminars since the 80's and watching lots of webinars listening to guru's.i would like to find a mentor even in another state.i live in nevada.if I just had the funding.i have ideas but can't get anyone to mentor.
    La trece Ward
    Replied 9 months ago
    Hi Rochelle, im a new upcoming investor i was introduced to meetup.com and met a lot of investors that don't mind mentoring. In signed up with "Real estate investing for beginners " they helped me alot. Chect it out.
    Rudy Bello Investor from Vancouver, Washington
    Replied 9 months ago
    If you’re still interested in a mentor let me know.
    Kris Patel Investor from Arroyo Grande, California
    Replied 9 months ago
    Bigger pockets, ask questions, and lot of good people will give honest answer.
    Jeffrey Avo Uvezian
    Replied 9 months ago
    Limit involvement with partners and start with smaller projects on your own.
    VInnie Kojin from Mandan, North Dakota
    Replied 9 months ago
    Thank you for your knowledge. Looking for a mentor for a new Fliping and Rental venture . I have been a Working General contractor for 20 years. Started new residential Building in 2017 . Built and sold 3 homes in 3 years while contracting at the same time. Moving from ND to Portland OR mid 2020. Relocating next to family. I want to start fliping homes and BRRRR. I will be doing all the construction rehabbing myself less the licensed trades. Reading and learning to buy foreclosures and pre foreclosures to flip. Looking for advice, education, ideas, apps for success. Thanks Vinnie
    Greg McGuire
    Replied 9 months ago
    Of course if your handy, have skills you can make money over time, but it's a long haul.
    Jim Walker Real Estate Agent from Roseville, California
    Replied 9 months ago
    Before everyone attacks Greg, please note he used qualifiers "most" and "almost" in the sentence: "Most people should ignore RE and put the money in a IRA, 401k at work. (Pre-tax)The capital cost of RE is way to high to make money in almost all deals." This is true. REI requires a set of skills that most people don't have and will never acquire even with training and effort. For those that do, well, we are the exceptions.
    Alexander Goode
    Replied 9 months ago
    He also said "The only smart people on this site are the ones in tech, running the website." He's either picking a fight or someone who didn't know what he was doing and lost all his money in RE.
    Matthew Adair Rental Property Investor from Chicago, IL
    Replied 9 months ago
    Great article, Ian! I couldn’t agree more with your tip to “Just start.” My wife and I talk to so many people who want to invest. They read blogs and listen to podcasts. They look for properties online. But, they always find an excuse before making the first purchase. They dream about owning 10 properties before they own the first one. “Just start” is a great motto for so many of us.
    Russell Wagner
    Replied 9 months ago
    Closing on my second unit today, Greg - I am on board with what you posted (big believer in Dave Ramsey), my big hiccup that took me 4 to 6 months to wrap my head around incorporate the tax advantages around the business of the real estate. Yes, you buy 30 units and you bought yourself a job, you also bought yourself tax advantages correct? Beyond the tax advantages, multiple streams of incomes. In 2008 we lost our shorts in RE and in the stock markets, to prepare for this again my focus is on cash flow. So when the crash does happen again, and it will (tides come and go) during the next one I have secondary and multiple income streams vs. valuations. Thoughts.
    Barry Washington
    Replied 9 months ago
    Thank you for writing this article. I need a mentor. Will you be my mentor? How do you get loans? I'm just getting started in the multifamily business. I have three homes. Thanks!!!!
    Richard DeWitt from Pompano Beach, Florida
    Replied 9 months ago
    I've been investing in real estate since 1980 starting with single family homes. Now I also own some multifamily and industrial projects. I agree 100% with the article. Buy more faster!! Thanks for writing
    Alec Dolan
    Replied 9 months ago
    Thanks for the article! I am potentially purchasing my first property in the next 6-12 months, as an owner-occupied investment. How do I find a coach/lender who would be helpful with this particular method? I did buy the House Hack book on BP and that has been a great start.
    Jacob Compher Real Estate Broker from Asheville, NC
    Replied 9 months ago
    I'm just starting in the real estate business, so I will use this information wisely, Definitely the point about just START! Thanks for sharing your wisdom.
    Turner Wright Investor from Houston, TX
    Replied 9 months ago
    It's nice to hear from a seasoned investor what he/she would do differently from the start. I'm somewhat new and agree with your article. Thanks for sharing!