How to Get Your Financial Situation In Order

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One of the things you're going to want to do when you get started in real estate investing is to get your financial situation in order. What do I mean when I say that?

What I'm talking about is understanding all your numbers. How much money do you owe? How much money do you have? What are your assets? How much equity is there in your home, in your investment properties, in any of your other investments? Do you own any other types of assets like home, like a car, like a furniture? Any things stocks, bonds? Where is your money? Where is your money invested? And start taking inventory of it, right? Get out a piece of paper, or get out a spreadsheet and start calibrating what your assets and liabilities and cash are.

The other thing you want to do when getting your financial situation in order is you want to start looking at your credit score. It may or may not be used, but definitely, it's a good thing to know and a good thing to have if you ever need it.

Go online, order your credit score, sit down with a financial planner or an accountant and go through it and figure out what is in there, and if you need to make any adjustments.

The other thing you need to do is you have to look at all your expenses from a spending perspective. How much money is going out each week? Is there an opportunity to reduce those expenses, if need be.

You know, if you're looking at getting into real estate investing, you're going to need some cash for transactions: whether it's to hire a lawyer or whether it's to hire some marketing people.

You have to look at what your expenses are and how much income you're bringing in. If you don't have any income, well that's going to be an easy job. But chances are you are working, you've got some income and you can start putting some aside.

If you don't have enough money to get started, start making some changes, some decisions on where your money's going. Do you really need those three triple chocolate coffee lattes every day? I don't really know what those are, but I just made that up.

So again, just to get the big picture around trying to get your financial situation in order is you're looking at what your current state is. This is your benchmark that you're gonna use to determine where you're going, what your growth is going to be, how successful are you going to be in real estate investing? And also, it's to make sure that you got your spending and your things under control. So you're not going out and you're not buying the new Mercedes or the new Porsche… not if your short term goal is to generate income from real estate investing.

You want to focus a lot of your money on that activity. Assuming, of course, if you're not a millionaire and you don't really need to, and you're just doing real estate investing for fun.

Okay. So let's get your financial situation in order.

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