The ‘Only’ Step?
Yep. There is really only one step you need to take to get started, to get moving forward, to overcome the hurdles you are facing, to step out and begin building the kind of life you want to build. I’m not just talking to newbies here (though, for those stuck at the beginning, in analysis paralysis, this is especially important for you.)
I’m talking about one step for everyone. You, me, your mother. Everyone.
Can there really be just one step to get going?
I’ll admit, it sounds a bit presumptuous, but hang in there with me a minute. There really is only one step you need to take to get your real estate investing game going. Do you want to know what that step is? It’s the most important step of all: the next step.
How to Invest in Real Estate While Working a Full-Time Job
Many investors think that they need to quit their job to get started in real estate. Not true! Many investors successfully build large portfolios over the years while enjoying the stability of their full-time job. If that’s something you are interested in, then this investor’s story of how he built a real estate business while keeping his 9-5 might be helpful.
Why The Next Step Matters
It’s so easy to be overwhelmed by the gigantic nature of real estate investing.
For example, did you know there are nearly 500,000 forum posts over in the BiggerPockets Forums about real estate? That’s almost a half of a million posts! I mentioned in the forums yesterday to someone that the more I learn, the more I realize I don’t know about real estate. I consider myself to have a pretty good grasp on single family rentals or multifamily properties – but those encompass just two of the Top 100 Ways to Make Money in Real Estate, as I’ve written about previously.
So in an industry that’s so gigantic and so overwhelming, how do you get moving?
As I said, it’s by focusing on the next step.
The next step is the very next thing you need to get done. It’s not the goal (though knowing your goal is important) and it’s not the plan (though having a plan is important.) I’m talking about knowing the very next specific step you need to take to get moving.
Baby Steps … Dave Ramsey Style
One of my favorite financial authors out there is Dave Ramsey. For those of you unfamiliar with Dave, he became a multimillionaire through real estate investing (well… speculating) and lost everything, eventually going through bankruptcy and having to start over with nothing. After his financial collapse, he re-invented his life and began a journey against debt and against speculation, teaching others the same and becoming one of the most respected names in personal finance.
Whether or not you agree with Dave’s principles on debt is irrelevant. I’m bringing him into this conversation not because of his opinions but because of his teaching methods.
Dave teaches people to get out of debt and begin building wealth using “7 Baby Steps.” These steps are:
- Build a $1000 emergency fund
- Pay off all debt (except your home mortgage) by “snowballing” it
- Save 3-6 months of living expenses
- Invest 15% of your income
- Begin funding college for your kids
- Pay off the house quickly and early
- Grow your wealth and give it away generously
Each step is not overly complicated or overwhelming – hence the name “baby steps.” Each one builds upon the previous, and you don’t move on until you’ve accomplished each of the steps in order. You don’t think people working through Dave Ramsey’s “Baby Steps” are concerned about paying off the house quickly when they are still up to their ears in credit card debt? No! They just take it one step at a time. Dave teaches this way because it’s much easier than telling someone “you need to shape up and build wealth.” Baby steps enable people to take just little adjustments at a time, to accomplish a much greater goal.
The same principle of Baby Steps can be applied to real estate investing. You don’t need to always worry about the big picture – you need to worry just about the baby step you are currently on. However, while this sounds easy, sometimes it can be tough to determine exactly what that next step is.
How to Determine Your Next Step
I’ve discussed this before in other posts, but I want to really want to make sure you get this.
In David Allen’s productivity book “Getting Things Done” he talks about always being aware of what your “next actionable step is” for any chore. Let’s say you need to get milk from the store. What is your next actionable step? If you said “drive to the store” you’d be wrong. Your next step is probably to find your keys, or perhaps close the laptop lid and stand up. Don’t overcomplicate things – just boil down your tasks to the most simple, actionable, next step.
Discovering your next step can take practice – it doesn’t come naturally. However, once you train your mind to think this way – you’ll never be the same.
There are two easy ways you can use to determine your next actionable step:
- Get More Specific – Just like we did in the example above with the “milk,” you will want to ask yourself “what is the next step?” Then tell yourself “okay, get more specific.” Keep saying “get moe specific” until you can no longer break it down any further.
- Ask a Mentor – Perhaps you simply do not know the next step because, as Jeff Brown like’s to say,”You don’t know the answers to the questions you don’t know to ask.” That’s okay! That’s what BiggerPockets is here for! Go over to the forums and ask! It really is that simple. Explain your situation, and ask for help getting moving forward. It doesn’t matter if you are brand new or have been investing for twenty years. Chances are, there is someone on BiggerPockets who can help get you going and figure out that “next step.”
A Few “Next Step” Examples
I’m a big believer in giving actionable advice.
Up to this point, this post has been fairly “motivational” which, I believe, has it’s place when not done in a sleazy way (“You Can Be Rich Today by Sending me $997!) However, I want to give you some concrete examples of the “Next Step” for a few different scenarios. Maybe you’ll find yourself fitting perfectly in one of these, or maybe you can simply adapt this logic to your own situation. Let me show you what I mean:
The Noob – Joe has never done any investing. He was watching an episode of “Flip That House” and thought, “Well darn, that would be fun.” Joe Googles “Flipping Houses” and comes to an article on the BiggerPockets blog about flipping houses. He reads some and begins to get excited. But now what? If Joe were to ask me (and since I’m making Joe up right now, I guess he is!) I’d look at his goals. He wants to flip. Okay – great! Get More Specific. Well, in order to flip, he’d have to know something about flipping. In fact, he’d have to know an awful lot about it. So I’d encourage Joe to start by building his education. Get More Specific. It tell Joe to go and read the “Ultimate Beginner’s Guide to Real Estate Investing” for free on BiggerPockets. That’s a next step. After that? I’d show him how to search for topics on BiggerPockets, how to sign up for an account, and how to start asking questions in the forums.
The Analysis Paralysis Starter Jill has been a lurker on BiggerPockets for months, and has read everything there is to know about wholesaling. She is ready to do it – but she just can’t seem to pull the trigger. For Jill, I’d tell her she needs to connect with a local investor who might buy her flips. Get More Specific. I’d tell her to search for an investor in her area on BiggerPockets and make an introduction. If she couldn’t find one – I’d tell her to grab a phone book and start calling real estate agents in the area to ask them about who the big investors in the area are.
The Burned Out Landlord Bill has several properties, including a small apartment building, and he’s burned out. He’s been managing his properties, fixing leaks, filling vacancies, and more for over a decade. He makes decent income from the income- but he’s tired and it’s far from passive. Bill wants to keep the income but wants to stop doing the work. Bill’s next action should be first to post the problem on the BiggerPockets Forum. How have other landlords dealt with this? Chances are, Bill would be told that he should look into property management. Get More Specific. Bill should do a Google search and find 5 local property management companies, calling each one to determine rates, charges, etc. Bill now has an idea to move forward. After this, he will have another step, and then another. But finally, Bill is moving forward.
What’s Your Next Step?
You’ve obviously stuck through my ramblings and come this far – so ask yourself, what is your next step? Get More Specific. Come on – really think… what is the next thing you need to do to move forward? Not sure still? Why not head over to the Forums and ask, or reach out to one of amazing bloggers we have here on the BiggerPockets Blog. The folks that volunteer their time and write amazing content each week here on the site are some of the brightest minds in all of real estate investing – and they actively respond to comments and engage in conversations every day.
So what do you think? What is your next step? I hope it’s to leave a comment below, letting me know what your next step is. After that, perhaps your next step will be to scroll up to the top of this page and click the “share button” to let your Facebook friends know about this post?
So… What’s your Next Step?