BiggerPockets Founder/CEO from Denver, Colorado
We all had to start somewhere . . . new investors are thirsty for real estate advice and I think we can get a thread going with some fantastic feedback from many different viewpoints. So . . .
What's Your Top Tip for New Real Estate Investors?
Joshua Dorkin, BiggerPockets
Investor from Round Rock, Texas
Focus on learning as much as you can and don't get in a big hurry to impress everyone with how many deals you have done. What matters is maximal profits...not maximal deal count.
Bryan Hancock MBA, RealStarter
E-Mail: [email protected]
Telephone: (512) 980-0070
Residential Real Estate Broker from Grand Blanc, Michigan
Bryan is definitely right.
On the other hand, don't over analyze to the point of taking no action. Many investors will analyze a deal to the point of not ever making the deal happen. Proceed with caution, yet take action!
Investor from memphis, Tennessee
Surround yourself with great people! Advisers, attorneys, title agents, mentors, other investors...
The list could go on and on, but in the end, make sure you associate with the best. You will be most influenced by the 6 people who are closest to you, so if you want to find success and have a great reputation, surround yourself with successful people with great reputations.
Chris Clothier, Memphis Invest, GP
Investor from raleigh, North Carolina
I agree with Chris, to add some more, the local real estate investor club is particular helpful where I live. We got the chance to network and to learn from people with great deal of experience.
Also I would say managing the property yourself would gain you a lot of experience (and save some money as well). Just don't let it overkill.
Real Estate Investor from Kalamazoo, Michigan
Learn your market, do your homework, and as Chris says surround yourself with the best.
SFR Investor from Orange County, California
Build a strong foundation of knowledge and identify good experienced people to help/guide you (not guru's who are more interested in your bank account than you).
Don't spend every penny you make in some immature attempt to prove your success. Put some away for those times when money gets thin. Those that prepare and save for the storm typically survive it. Those that don't get washed away with all the other phonies.
Get rich slowly in real estate and you're very likely to remain wealthy. People that get rich quickly usually get poor just as fast.
Investor from Bakersfield, California
Set goals and write them down. There are six areas of life to set goals in. Without a clear idea of why you are wanting to accomplish what you are attempting to accomplish you will most likely either stay stagnate or fail. When setting them dont allow your goals to conflict one another.
Dont just buy business cards pass them out. The best prospect group you can give cards to is you center of influence. People you know. Dont be shy about expressing your decision to be a real estate investor.
Answer your telephone. Or return prospect calls within 15 minutes. Too many times I have been at the kitchen table signing a contract when the telephone would ring from an investor returning the sellers call.
Ask questions of everyone. Dont worry about being embarrassed about feeling stupid. Youre only stupid if you dont ask.
Everyone who tells you you can’t or shouldn’t are great objection handler opportunities. Practice on the naysayers.
Make the friggin offer. If uncertain how much to offer then start at a number that even with your level of experience you know if able to buy at that number it would be a good deal.
Every NO is one step closer to a YES.
Michael Quarles, The Michael Quarles Real Estate Show
E-Mail: [email protected]
Telephone: (661) 243-3210
Real Estate Investor from Milwaukee, Wisconsin
A good RE lawyer and getting to know as many agents as you can. Good deals are rare on the open market. It is all about who you know and who they know. It took me two years to get to the point where people were calling me with good stuff.
If you are a buy a hold guy I would also not waste your time with wholesalers unless you know they are good at what they do. I can't tell you how much time I have wasted talking to these bottom feeders.
You also have to be tough in this business. This does not mean you should throw out the golden rule, but you might have to get close. You will start to walk into situations thinking, "How is he going to screw me over." This is fine and normal, but try to remember to keep a smile on your face (I have trouble with this).
If you are really going to get into rentals and self manage, you are going to have to really work. To get the good prices you are going to have to buy the junk others dont want. These will require repairs to make them into property that everyone wants. You will have to learn construction and fast. You will also not be working a 9-5 job. I work seven days a week 10-14 hours a day. I am starting my fifth year and still working this hard. You have to remember that it is great to hire people, but they will not work as hard as you and every penny you pay them is a penny out of your pocket.
Real Estate Investor from Portland, Oregon
Think long-term. If you are in your 30's time starts to fly. If you own a few properties you will gain equity and before you know it they are paid-off or close to it. Long-term means big picture. If your big picture is 10 years then it is easy to put up with the little bumps. You don't need an immediate reward if you know in the long-run you will be in good shape.
Bite off what you can chew. Many have gone down in flames trying to get too big too fast. Real estate, or any business for that matter, can ruin your life if you let it. Maybe 4 properties will complete you and 40 won't work. You need to decide, not anyone else.
Investor from -, Illinois
Read and re-read as much info on this website as you can until your friggin eyes hurt. There is no guru book out there that will teach you as much as everyone on BP can.
Real Estate Investor from Mesa, Arizona
Jeffrey, I have a problem with your characterization of wholesalers as "bottom feeders". I have been told that the real estate investor family is always there to support one another, whether cheerleading or nitty gritty mentoring. As new investors who do not have much working capital, we were encouraged to wholesale to build our business by many who are quite wealthy and successful in RE investing. Unfortunately, if beginners were to read your comments, they wouldn't be too eager to undertake this venture. Shame on you!
Property Manager from Lexington, Kentucky
I understand exactly what Jeffrey is talking about and his frustration is shared with a lot of real estate investors...but I would not take his words personally. In my experiences he is spot on. Wholesaling has become a hotbed for people looking to make a quick buck with little effort and often little knowledge of real estate transactions or the market they are working in. He also mentioned he would not waste his time with wholesalers unless they "are good at what they do". I believe the bottom feeders are those who are not good at what they do or do not even know what they are doing.
Many people on BP say things about "wholesalers" when they mean 95% of wholesales...if you are in the 5% that is good at wholesaling, why be offended or have a problem with his comments?
Mobile Home Investor from Spanaway, Washington
Just get that first deal under your belt. After that the adrenaline kicks in and you wonder why it took you so long to get that first deal completed. As more deals roll across the closing table - it gets better and better.
Involved In Real Estate from Pasadena, Texas
*from personal experience*
I seem to always be looking for that perfect lender (haven't found a good local private lender YET).
Be VERY cautious about the fraudsters out there in the lending universe! Do your due diligence. If it's too good to be true, it probably isn't true.
Real Estate Broker from Spartanburg, South Carolina
Join or start a weekly Investor Breakfast. We started one about 25 years ago and it is still going. We open it up to rental property owners, Realtors and anyone that has real estate related businesses.
Edited Oct 31 2011, 13:53 by Administrator: Please use your signature for contact info.
Find a way to make money while learning about investment property. Do something that gets you inside of the type of properties you want to invest in.
I started out as the office manager of a property management company, got my license and started leasing and selling. I now have a great network of contractors, and I know which ones to avoid. I know about code, lead and rental registry inspections. I've rented hundreds of properties and been in many more. I know what tenants want in my market.
Now I am seriously looking for my first investment property. I feel very ready!
If I'd bought my investment property four years ago when I first started being interested in investing, I don't think I would have done so well.
Investor from Fort Wayne, Indiana
Take care of your personal finances!
1. Although many advertise that you can do this with no money, no experience, and no credit-there are probably not many people that have really made this happen. It takes money to get started even if it is just gas money, advertising for bandit signs, or money to pay for your laptop and internet bill.
If you need work, try to find some work in the RE industry even if it is cleaning out rentals because that will get you involved with people in the industry.
2. Ultimately, managing your personal finances with a modest amount is training for handling larger amounts.
You should understand that to be successful, it will probably mean that you will work hard. (Read Jeffrey K's post again.) I have seen many wannabe's come and go because they think this is going to be easy. The less money you have available to get started, the more sweat equity you will need to invest to be successful.
Lastly, read everything there is to read here on BP. The forums are great but make sure you include the articles and blogs as part of your education as well.
Best wishes on your journey.
Commercial Real Estate Broker from Bluffton, South Carolina
Don't quit your day job! When you have a large net worth, don't quit your day job!
Everyone wants to get into RE because they want out of something else, be it a job they hate or they want to be their own boss or they want to make a lot of money etc.
The gestation period of RE is quite long 3-12 months so if you are counting on income take this into consideration. Also watch your expenses...if something stops working do keep doing it.
Figure out the sector that you want to work in and specialize (become the expert).
Start with your Buyer's List...don't look at a property until you have 20 buyers and you know what they want (50-100 is much better).
Time block. Find 1-2+ hours a day and do nothing but your "A" RE activities during that time.
Don't get caught up in setting up shop. You will do most of your business over the phone and by email(what do you need to set up but an answering service and a hosted email account).
Hosted email: this is my pet peeve...I have Gmail accounts but those are personal accounts. You should have a hosted email account [email protected] You are a professional this is your pro identity. You don't have to have a web page to begin with...just pick a professional short name and go with it.
Let me know if this is helpful? Good luck, Brad
Developer from Santa Clarita, California
My Top Tip to newbies is to pick a strategy that fits your personality and abilities, then get educated on that strategy, do not get side tracked with other strategies. You must have determination to succeed and to get over the emotional roller coaster you will encounter!
Having a mentor who actually does what you are learning in the real world is also a key factor in getting you over the hump.
In regards to some comments on wholesalers - Jeffery called them bottom feeders and Pat took offense. I would say that in this business, the problem with approximately 95% of those who call themselves wholesalers, is that they do not add value to a transaction and they are not educated enough on the strategy. To be a good wholesaler when your target buyer is an all-cash rehab flip investor, you must know your market, know how to estimate rehab costs accurately, know how to properly calculate after repair values (I call them exit values), and you must know your market in and out. So many so-called wholesalers give out inflated exit values and undervalued rehab budgets to make their deal look better. This makes them look bad and is likely what lead to Jeffrey's comment. Again, this is not to say that all wholesalers are bad, just that so many simply do not learn the ins and outs and fall prey to the gurus advertising that wholesaling is the easiest way to start out and you need no money and no credit. While that can be true about money and credit, you do need to have the knowledge to find good deals and find good buyers, it is hard work.
Will Barnard, Barnard Enterprises, Inc.