I'm a new wanna-be investor in West Virginia, and am immersing myself in the education phase. Of everything I've read about strategies, I am leaning toward BRRRR, and will be studying creative methods of financing deals. But enough about me...
General question, for those of you that have been successful in real estate investment... What are 1 or 2 lessons that you’ve learned now that would have made the biggest impact on your success if you’d known them before your first investment?
Thanks in advance for anyone willing to share!
Start building your team immediately, if you haven't already. If you know what a BRRRR is, then you already spent more time studying than you need to in order to succeed on your first deal. I would make it a goal to call 3 agents a day until you find one that understand investing, and seems like they're someone you would like to work with. This will probably be the most difficult task. They will all tell you they work with investors, but press them a little, because that knowledge is key. Then ask if they can recommend a good property management company and some lenders.
Call the PM and discuss your goals. Figure out if they're a good fit. Ask them about areas of town that they like to manage. PMs are a tremendous source of information. I've been investing for 15 years, and I'm a full time agent that works exclusively with investor clients, but I still talk to my property manager almost every single day. They have information about what parts of town get more and better rental apps than others, and where there is more turnover. This data isn't readily available anywhere online.
Call the lenders, and discuss your goals. Get their advice on the shortest route between you and property ownership. A good lender will be able to look at your overall financial situation, and give you some advice on the most realistic path forward. Don't get stuck on a strategy until you've done this. I've met a lot of investors that really wanted to flip or BRRRR, but didn't really have the resources. Their lender explained that they could instantly qualify for a house hack, and they were off to the races. There is no best strategy, only the strategy that fits your situation the best.
Once you have a team in place, start making offers. I used to work with an old school investor that would always say if you aren't making 10 offers a week, then you're not a serious investor. I don't think you need to go that far, but I think his general point was valid. Every property is a great deal at the right number. You just need to figure out what that number is and go for it. A good goal to start, is to make 1 offer a week. In the last couple of years, this strategy wasn't optimal, because most properties sold at or near their asking price. However, in the next few weeks or months, I believe some of the best deals of the coming decade will be made by those investors willing to submit offers during this time of uncertainty.
Finally, expect to make mistakes. Don't bet the farm on your first deal. Pick a property that you can afford, and don't try some giant renovation. Things will probably not go as expected, and you will have to adapt. In the long run, you should be fine with whatever you buy, as long as you're in a decent market.
@Eric Gallagher 1. I would have invested in cashflowing markets way sooner. 2. I would have learned how to BRRRR way sooner to preserve/generate capital. 3. I would have fired people quicker who were not performing in my organization and found better partners.