I was reading a blog page and the advice given was, to paraphrase, if you can't create a budget and statement of financial condition (balance sheet) for yourself you shouldn't be investing in real estate.........Yet.
So my question to you is: For someone who is completely new to all of this, what is the best first skills they should acquire?
I will start it off with:
A. Create a balance sheet for themselves
B. Create a budget for themselves
D. Understand the time value of money
E. Understand why leverage isn't a bad word
What say you? What are the first skills one should obtain to get started?
I assume the blog was hinting at the idea that someone who does not have their own finances in order cannot invest, effectively.
If you a uncertain about your own financial habits (carry credit card debt, other loans, bad spending habits), then I would recommend getting those sorted out, in order to make sure that any money you make in real estate isn't just falling into the abyss. Defensive habits will also make the bad days a little less grim.
That being said, personal finance and real estate skills are different. For REI investing, I would say that your number one skill will end up being networking and meeting people.
For instance: Want to wholesale? You're gonna have to find ways to approach motivated sellers and distressed homeowners. Want to rehab and flip? You're going to need contractors, maybe realtors and wholesalers as well. You're going to manage these people. Want to invest from a distance? You're going to need teams on the ground. You're going to need a good accountant, and other people who can bring you deals.
Throw all of that stuff out the window. If you want to invest i.e. flip houses then you don't need balance sheets, budgets, or anty of that stuff. All you need to do is have peiple skills. You can negotiate a deal and assign it very easily. It's just a peice of paper!
@Trevor Ewen is correct:
"That being said, personal finance and real estate skills are different. For REI investing, I would say that your number one skill will end up being networking and meeting people."
I think people tend to look at real estate investing as this glamorous rock star business, when really it's just doing deals consistently, even if they are small assignments for 5-10K. If you need more than that then just ramp you marketing and networking up to meet you goals. You don't need a lot of money invest but you do need to have the drive!
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