What's the First Step?

[Nicholas Ramirez]

A lot a newbie investors spend so much time trying to learning "the right amount" of information before jumping into investing (as if there's such a thing). But every experienced investor says it's more important to just make the jump, take the leap, take action!, and learn as you go; that taking action is better than waiting for perfection. My question is, for someone who is usually so focused on planning everything out first, (ex. waiting to be in a strong financial position), what would you recommend the first 3 steps to be to "taking immediate action?"

[Bob Stevens]

Quote from @Nicholas Ramirez:

A lot a newbie investors spend so much time trying to learning "the right amount" of information before jumping into investing (as if there's such a thing). But every experienced investor says it's more important to just make the jump, take the leap, take action!, and learn as you go; that taking action is better than waiting for perfection. My question is, for someone who is usually so focused on planning everything out first, (ex. waiting to be in a strong financial position), what would you recommend the first 3 steps to be to "taking immediate action?"

RE is nothing but math, just know your numbers. 

[Mae Galang]

Very true! 

Starting a business or investing can make a person feel scared and anxious -- start anyway.

I'm not much of a planner and bought my first home in 2017, I didn't have the capital for the downpayment at the time. It was a new-build and it took GL Homes 18 months to build it. So I worked 4 jobs in that 18-month timeframe to come up with the money for a suitable downpayment (without touching my brokerage, 401k, etc).

Gosh! I was so young and naive at the time. I've learned that a little bit of naivety is good because otherwise an individual may never take the leap if they possessed all the knowledge and truly knew how much risks are involved. The experience taught me a lot. Sold that house a few months ago. Great returns!

3 Steps To Take Immediate Action:

1) Set small, short-term goals (establishing a one-year, three-year, five-year goal has helped me tremendously)

2) Seek help from people smarter than you (I am never shy to ask questions, even the stupidest ones)

3) You grow through what you go through (We will make mistakes along the way and that is ultimately what will help us become better investors)

[Nicholas Ramirez]

Quote from @Bob Stevens:

Quote from @Nicholas Ramirez:

A lot a newbie investors spend so much time trying to learning "the right amount" of information before jumping into investing (as if there's such a thing). But every experienced investor says it's more important to just make the jump, take the leap, take action!, and learn as you go; that taking action is better than waiting for perfection. My question is, for someone who is usually so focused on planning everything out first, (ex. waiting to be in a strong financial position), what would you recommend the first 3 steps to be to "taking immediate action?"

RE is nothing but math, just know your numbers. 

 I get there is math involved. But how would a newbie incorporate "know your numbers" into taking action? Just seems a bit too broad to use as advice for taking action.

[Nicholas Ramirez]

Quote from @Mae Galang:

Very true! 

Starting a business or investing can make a person feel scared and anxious -- start anyway.

I'm not much of a planner and bought my first home in 2017, I didn't have the capital for the downpayment at the time. It was a new-build and it took GL Homes 18 months to build it. So I worked 4 jobs in that 18-month timeframe to come up with the money for a suitable downpayment (without touching my brokerage, 401k, etc).

Gosh! I was so young and naive at the time. I've learned that a little bit of naivety is good because otherwise an individual may never take the leap if they possessed all the knowledge and truly knew how much risks are involved. The experience taught me a lot. Sold that house a few months ago. Great returns!

3 Steps To Take Immediate Action:

1) Set small, short-term goals (establishing a one-year, three-year, five-year goal has helped me tremendously)

2) Seek help from people smarter than you (I am never shy to ask questions, even the stupidest ones)

3) You grow through what you go through (We will make mistakes along the way and that is ultimately what will help us become better investors)

 Love it! Well said, thank you for your experience Mae!

[Bob Stevens]

Quote from @Nicholas Ramirez:

Quote from @Bob Stevens:

Quote from @Nicholas Ramirez:

A lot a newbie investors spend so much time trying to learning "the right amount" of information before jumping into investing (as if there's such a thing). But every experienced investor says it's more important to just make the jump, take the leap, take action!, and learn as you go; that taking action is better than waiting for perfection. My question is, for someone who is usually so focused on planning everything out first, (ex. waiting to be in a strong financial position), what would you recommend the first 3 steps to be to "taking immediate action?"

RE is nothing but math, just know your numbers. 

 I get there is math involved. But how would a newbie incorporate "know your numbers" into taking action? Just seems a bit too broad to use as advice for taking action.

 Find a deal, show it to an investor doing deals. You will earn a fee, learn save then go on your own. You will not believe how simple it is, NOT easy but simple. Get to your local RE meet up, learn how to run comps, and learn what reno's will cost

All the best 

[Scott Mac]

Quote from @Nicholas Ramirez:

A lot...   ...My question is, for someone who is usually so focused on planning everything out first, (ex. waiting to be in a strong financial position), what would you recommend the first 3 steps to be to "taking immediate action?"

Do not take immediate action until you believe you are ready to do so. If your thoughts are telling you to  wait until you're in a position that you think is strong enough financially to be comfortable with this new business, Listen to your own thoughts.

Notice I said new business and not investment.

If you look at your rental house as a business, which it is. That will allow you to see it more realistically. 

Once you find a house that you believe would be a good rental, meaning desirable to your target market of customers (people within a couple of mile radius of the place), and all of the costs of monthly ownership that you can accurately project fall below the rental amounts that you project that you can get from your target customers, then you have a possible business asset that you can use to produce income, and have renters pay down the mortgage, while hopefully it goes up in value at least with the rest of the economy.

 There are formulas that people use for the down payment amount and the return on their investment and et cetera et cetera. That is part of the learning process. 

As you run your business, you may have to buy a new roof unexpectedly, or replace the hvac system unexpectedly, or replace kitchen items on a turn because they've been destroyed or reached the end of their service life.

What I'm saying here is the reality of it is you will most likely have to plow back into your business money that you receive as rents that you intended to keep personally- sometimes. 

Also, There may be times when you must pony up some additional cash to keep your business operating. 

Maybe the roof blows off in a storm before the end of its service life and all of the roofers are charging double and triple rates, and if you don't replace it the rain will come in and destroy your ceilings and your renters will leave and you will not have anyone as a customer for your business because the interior is destroyed. 

This is called having a cash reserve for the business. You can draw on.

Also know that turns are costly and will eat into your profits like an alligator. So you need to be able to turn the unit quickly for a new renter every time you lose one. 

Relying on just anybody to do this means you might have substandard work, or not to code work etc. 

The turn is an ongoing part of the business that you cannot always predict when it will happen, but you need to have in your rolodex reliable people who can do a workmanlike job for you quickly and not three months down the road.

Sorry about all of the super long sentences. I wanted to give you this as a concise manner without any of the slingo slango of the industry such as take immediate action, etc.

If you decide to take action at the speed you are comfortable with and have the financial resources available to run it as a profitable business you will probably be much happier in life, and sleep a lot easier.

Also realize that the term landlord means business owner as well as investor. The reality of it is if you're going to rent to people you are a business owner and viewing your assets that way is something that they fail to point out a lot of times in books and seminars urging you to take immediate action.

But then again if you want to take immediate action and you are comfortable with that go for it.

Good Luck!

[Nathan Gesner]

1. Get your finances in order. If you can't manage what you already have, you won't be responsible with more.

2. Know how to analyze property. Real estate is a very forgiving investment and will erase mistakes if you just hold on long enough. But if you make a big mistake, it can tank your life.

3. Learn how to manage well. Many investors (probably the majority) lose a ton of money early on because they never learn how to manage their rentals. They don't know how to screen applicants and choose the wrong ones. They don't inspect and only discover damages three years later when the tenant leaves. Buying the right property is important, but knowing how to manage what you've got is even more important.

[Jonathan Greene]

People make the mistake of thinking that take action means buying. That is not the case. Taking action is talking the next step. First, it starts with reading and podcasts so you have a base. Then, you start going to real estate meetups consistently for at least six months. That is taking massive action and you don't even own anything yet. But you will be ready to once you get there. Buying a property before you know anyone or anything is the quickest way to go on a short journey.

[Eric Gerakos]

"Taking action" and breaking free from "analysis paralysis" cause many new investors to rush into bad, money losing deals. Invest when the numbers make sense. It's a marathon not a sprint.

[Nicholas Coulter]

@Nicholas Ramirez I always suggest house hacking. Its the best first step you can take as a new investor. 

[Wale Lawal]

@Nicholas Ramirez

To begin investing in real estate, first determine your investment strategy and objectives. Choose from single-family rentals, multifamily properties, house hacking, or BRRRR, and create specific targets. Understanding your risk tolerance can allow you to make more educated decisions. Contact numerous lenders, prepare financial paperwork, and acquire a mortgage pre-approval letter. Actively seek for properties that meet your requirements and run the numbers to ensure they are sound investments. Create notifications, utilize rental property calculations, and arrange viewings and open houses. Network with other investors, consult with a real estate professional, and move quickly when you locate a good offer. By taking action and learning from your experiences, you'll be well on your way to making your first investment.

Good luck!

[Nicholas Ramirez]

Quote from @Bob Stevens:

Quote from @Nicholas Ramirez:

Quote from @Bob Stevens:

Quote from @Nicholas Ramirez:

A lot a newbie investors spend so much time trying to learning "the right amount" of information before jumping into investing (as if there's such a thing). But every experienced investor says it's more important to just make the jump, take the leap, take action!, and learn as you go; that taking action is better than waiting for perfection. My question is, for someone who is usually so focused on planning everything out first, (ex. waiting to be in a strong financial position), what would you recommend the first 3 steps to be to "taking immediate action?"

RE is nothing but math, just know your numbers. 

 I get there is math involved. But how would a newbie incorporate "know your numbers" into taking action? Just seems a bit too broad to use as advice for taking action.

 Find a deal, show it to an investor doing deals. You will earn a fee, learn save then go on your own. You will not believe how simple it is, NOT easy but simple. Get to your local RE meet up, learn how to run comps, and learn what reno's will cost

All the best 

 Thanks Bob! Love the advice!

[Nicholas Ramirez]

Quote from @Scott Mac:

Quote from @Nicholas Ramirez:

A lot...   ...My question is, for someone who is usually so focused on planning everything out first, (ex. waiting to be in a strong financial position), what would you recommend the first 3 steps to be to "taking immediate action?"

Do not take immediate action until you believe you are ready to do so. If your thoughts are telling you to  wait until you're in a position that you think is strong enough financially to be comfortable with this new business, Listen to your own thoughts.

Notice I said new business and not investment.

If you look at your rental house as a business, which it is. That will allow you to see it more realistically. 

Once you find a house that you believe would be a good rental, meaning desirable to your target market of customers (people within a couple of mile radius of the place), and all of the costs of monthly ownership that you can accurately project fall below the rental amounts that you project that you can get from your target customers, then you have a possible business asset that you can use to produce income, and have renters pay down the mortgage, while hopefully it goes up in value at least with the rest of the economy.

 There are formulas that people use for the down payment amount and the return on their investment and et cetera et cetera. That is part of the learning process. 

As you run your business, you may have to buy a new roof unexpectedly, or replace the hvac system unexpectedly, or replace kitchen items on a turn because they've been destroyed or reached the end of their service life.

What I'm saying here is the reality of it is you will most likely have to plow back into your business money that you receive as rents that you intended to keep personally- sometimes. 

Also, There may be times when you must pony up some additional cash to keep your business operating. 

Maybe the roof blows off in a storm before the end of its service life and all of the roofers are charging double and triple rates, and if you don't replace it the rain will come in and destroy your ceilings and your renters will leave and you will not have anyone as a customer for your business because the interior is destroyed. 

This is called having a cash reserve for the business. You can draw on.

Also know that turns are costly and will eat into your profits like an alligator. So you need to be able to turn the unit quickly for a new renter every time you lose one. 

Relying on just anybody to do this means you might have substandard work, or not to code work etc. 

The turn is an ongoing part of the business that you cannot always predict when it will happen, but you need to have in your rolodex reliable people who can do a workmanlike job for you quickly and not three months down the road.

Sorry about all of the super long sentences. I wanted to give you this as a concise manner without any of the slingo slango of the industry such as take immediate action, etc.

If you decide to take action at the speed you are comfortable with and have the financial resources available to run it as a profitable business you will probably be much happier in life, and sleep a lot easier.

Also realize that the term landlord means business owner as well as investor. The reality of it is if you're going to rent to people you are a business owner and viewing your assets that way is something that they fail to point out a lot of times in books and seminars urging you to take immediate action.

But then again if you want to take immediate action and you are comfortable with that go for it.

Good Luck!

 Wow Scott, such great insight! Seems like you've given a basic play by play to running the business, much appreciate! Once a newbie a can get past the paralysis and take the leap, and this seems like great advice on how to hedge the business. And I understand what you're saying to about just waiting until you're ready to make that leap. I guess it really is just a gut feeling.

[Nicholas Ramirez]

Quote from @Nicholas Coulter:

@Nicholas Ramirez I always suggest house hacking. Its the best first step you can take as a new investor. 

 Great advice! Currently in my second unit utilizing house hacking and can definitely vouch for this method! Ready for the next step!

[Nicholas Ramirez]

Quote from @Wale Lawal:

@Nicholas Ramirez

To begin investing in real estate, first determine your investment strategy and objectives. Choose from single-family rentals, multifamily properties, house hacking, or BRRRR, and create specific targets. Understanding your risk tolerance can allow you to make more educated decisions. Contact numerous lenders, prepare financial paperwork, and acquire a mortgage pre-approval letter. Actively seek for properties that meet your requirements and run the numbers to ensure they are sound investments. Create notifications, utilize rental property calculations, and arrange viewings and open houses. Network with other investors, consult with a real estate professional, and move quickly when you locate a good offer. By taking action and learning from your experiences, you'll be well on your way to making your first investment.

Good luck!

Interesting! How important would you say is getting a mortgage pre-approval letter? Most advice I've heard is to the find a deal that makes sense first and then take it the as many lenders as you can until you find one that will work with you?

Love the rest of the advice! Just network well and move quickly when you find something. Thanks!

[Nicholas Coulter]

Quote from @Nicholas Ramirez:

Quote from @Nicholas Coulter:

@Nicholas Ramirez I always suggest house hacking. Its the best first step you can take as a new investor. 

 Great advice! Currently in my second unit utilizing house hacking and can definitely vouch for this method! Ready for the next step!

 A lot of people struggle from 1-2 so congrats! I bet a lot of new investors would love to hear how you got #2 and what’s your plan for #3

[Alex Mocanu]

Quote from @Nicholas Ramirez:

A lot a newbie investors spend so much time trying to learning "the right amount" of information before jumping into investing (as if there's such a thing). But every experienced investor says it's more important to just make the jump, take the leap, take action!, and learn as you go; that taking action is better than waiting for perfection. My question is, for someone who is usually so focused on planning everything out first, (ex. waiting to be in a strong financial position), what would you recommend the first 3 steps to be to "taking immediate action?"

This is pretty low hanging fruit: If you do not already own real estate (personal occupancy) I would start by purchasing a SFH or 1-4 unit using a conventional mortgage:

1. Get a pre-approval letter from a trusted mortgage broker (I would avoid large banks)

2. Connect with a Realtor

3. Start learning your market and run numbers

[Wale Lawal]

Quote from @Nicholas Ramirez:

Quote from @Wale Lawal:

@Nicholas Ramirez

To begin investing in real estate, first determine your investment strategy and objectives. Choose from single-family rentals, multifamily properties, house hacking, or BRRRR, and create specific targets. Understanding your risk tolerance can allow you to make more educated decisions. Contact numerous lenders, prepare financial paperwork, and acquire a mortgage pre-approval letter. Actively seek for properties that meet your requirements and run the numbers to ensure they are sound investments. Create notifications, utilize rental property calculations, and arrange viewings and open houses. Network with other investors, consult with a real estate professional, and move quickly when you locate a good offer. By taking action and learning from your experiences, you'll be well on your way to making your first investment.

Good luck!

Interesting! How important would you say is getting a mortgage pre-approval letter? Most advice I've heard is to the find a deal that makes sense first and then take it the as many lenders as you can until you find one that will work with you?

Love the rest of the advice! Just network well and move quickly when you find something. Thanks!

A mortgage pre-approval letter provides a clear picture of your budget, saving time and effort in property searches. It also shows sellers that you are a serious buyer, making your offer more attractive in a competitive market. Having pre-approval expedites the process, allowing you to act quickly and secure a good deal.

Good luck!