The Top 3 Things I Wish I’d Done Differently as a New Real Estate Investor
You know that saying that goes, “If only I had known then what I know now”? Well, that statement is front and center for most real estate investors—especially me.
Want more articles like this?
Create an account today to get BiggerPocket's best blog articles delivered to your inboxSign up for free
Maybe you wish you had vetted a partner better, but instead they ended up not working out and you lost money. Or maybe you wish you had gotten a home inspection on a duplex that ended up having faulty electrical.
Here are three specific things I wish I had done from the start of my investing journey.
Looking Back, I Wish I Would Have…
1. Utilized property management software from day one.
You’ve likely heard of at least a few: Appfolio, Buildium, and Tenant Cloud, for instance. These tools are nearly a one-stop shop for anything you need to do in your real estate rental business.
For example, these tools can:
- Request, accept, and track rental payments
- Request and track maintenance requests
- Hold everything from receipts to leases
- Push out rental ads to various platforms like Zillow, etc.
- Be used for accounting
- And so much more!
Unfortunately, I did not start out using one of these platforms. Instead, I use four or five different stand alone tools that do not integrate well with each other.
I track all my rent payments on an Excel spreadsheet (I know, I know…). All my leases are generated via HelloSign. My accounting usually consists of an all-out binge session 24 hours before it’s due.
I am currently trying to integrate all of my information into a platform. I can tell you, for sure, it is much harder doing it now than it would have been setting it up from the very start.
Lesson: Pick a platform and go with it. Use that platform as your main hub for all of your rental real estate activities. It pays to be organized in the long-run.
2. Found and utilized private money.
I have funded and purchased all of my deals by myself. I have a decent 9 to 5 and have purchased one property a year, more or less. I know you can get super creative and maybe get one or more properties for no- or low-money down. However, it would be a heck of a lot easier if you had someone who was able to fund or help fund your deals.
Being a newbie does not normally lend well to your credibility; therefore, maybe you do need a deal or two under your belt before you start pitching to your rich uncle a real estate idea that you have.
Either way, if you had someone who could provide capital, you could scale your business much faster.
For example, right now, I just picked up another three family via creative means. In the past, I have used hard money, and anything you budgeted for on the rehab was reimbursed to you. This time, it is all on me! Any surprises on the rehab are all on me.
Unless you have deep pockets, this process can get dicey; your bank account can really start to sweat. It sure would be nice to have someone backing you up—even if you owed them a fairly healthy interest rate or a good chunk of equity.
Lesson: Head out to your local real estate meetup. Start talking to people, and tell everyone what you are doing. You just never know who has some money they are looking to invest.
3. Done a marketing campaign to capture off-market deals.
Here is something I had never done up until about one week ago. Our first cold call campaign yielded incredible results. We called around 400 property owners; around eight of them are interested in selling their properties. It looks like one to three of them might be great deals.
We hired a virtual assistant and discussed with them exactly what we were doing and what we expected from them. They made the calls and passed along the results. Any warm leads we had, we personally followed up via a second more detailed call or meeting.
What if I had done this from the start? There are probably countless deals that never made it on the MLS that I could have found using this strategy. Even if I did not have the means to actually buy them, I could have wholesaled them or partnered with a wholesaler to sell them.
Lesson: Deal flow is crucial. There are countless possibilities as to what can be done with a good deal. If you truly have a good deal, more than likely, someone will help you buy it or someone will buy it from you. As you may know, as soon as you have that equitable interest in the property, a lot of options start opening up for you.
The Bottom Line
Overall, mistakes are okay to make as long as you learn from them. I have made plenty of them—including not doing any of these three things from the beginning. If you are starting out your real estate journey now, please do these three things. You will thank me down the road when you are behind the wheel of your well-oiled real estate machine.
What firsthand or secondhand lessons have you learned that can make beginners’ lives easier?
Share in a comment below!