29 Pieces of Advice From a Seasoned Real Estate Investor

35

If you’re not getting good deals, you don’t have enough leads – you need more marketing.

Working too long on one “deal” trying to force it to work means it’s not a deal and you’re still working on it because you don’t have enough leads.

Marketing is not an expense, it’s an investment.

Set up your real estate investment entities (LLC, S-Corp, etc.) early in your career to best protect you and your investments as well as to prepare yourself to take advantage of all the many tax benefits real estate offers.

It’s not how much money you make that matters, it’s how much money you keep.

Don’t let friends, family, or co-workers talk you out of real estate investing unless they have more money than they know what to do with. If that’s the case, do what they’re doing.

Free contracts are worth what you pay for them. Have your contracts approved by an attorney who will defend them in court. If you have to ask why, you’re new to the business.

If you own real estate, it’s not a matter of “if” you go to court, it’s only a matter of “when”.

Inspections are not an expense, they’re an investment. We have spent money to repair hidden problems that an inspection would have uncovered.

If a contractor needs a draw advance to buy more materials for your job, you can be pretty sure they’re using the money to buy materials for another job.

You will pay for eduction, either ahead of time from a mentor or by the mistakes you make as you go through the process.

When negotiating, spend more time listening than talking.

When negotiating a purchase, never think for the seller.

We’re in the problem solving business. Find out what your customer needs, then craft a solution to their problem.

Know your exit strategies (have several) before you buy.

Manage your tenants, don’t let your tenants manage you.

If a potential tenant doesn’t have enough money for their deposit and first month’s rent, they won’t have enough money to make the monthly payments.

If a potential tenant asks you to reduce your rental amount, they won’t have enough money to make the monthly payments.

If a potential tenant says their child support/unemployment income will enable them to make the payment, they won’t have enough money to make the monthly payments.

If a potential tenant says, “the Lord will help me make my payments” (does this happen only in the South?), you can be pretty sure you’ll end up evicting them both.

A millionaire makes $500 per hour so if a job (painting the walls and repairing a toilet) can be done for less than $500 per hour, hire it out.

Pick a mentor who is successfully doing the type of business you want to do because you don’t know what you don’t know.

Never get greedy. The best deals are the ones where everybody wins.

In real estate, there is such a thing as good debt.

We live in a world of abundance; there are more than enough real estate deals out there for all of us.

Don’t wait until you know it all to get started. None of us know it all.

It’s always a great time to be in real estate, you simply have to pay attention to the economy and real estate fluctuations to know how to direct your investments.

Don’t wait to buy real estate, buy real estate and wait.

There’s never been a better time to be in real estate.

What can you share? Which was your favorite piece of advice?

Photo: paul bica

About Author

karen rittenhouse

Karen Rittenhouse has been investing in real estate full time since January 2005. In that time, she has purchased hundreds of single family properties, opened a full-service real estate company, a property management company, a coaching/training business, and written three books on real estate.

35 Comments

  1. Never stop marketing, EVER!
    Wealth is a mindset, there is plenty of it if you BELIEVE!
    There is enough real estate for EVERYONE!
    If you are focused on your competition then they are are winning!
    Success in real estate is 80% psychology, 20% skills!
    Do the MATH!

  2. LOVE this!

    1. Help “rent to own buyers find the money.” Did you know the RTO TBers can get a loan from a relative’s IRA? See page 129 of Patrick Rice’s Book “IRA Wealth.” On Amazon.

    2. Never sign an unsecured Prom Note without a cosigner for Option Money on a RTO. You need to collect on a judgment with someone that has assets.

    3. Always get Seller extensions in the lease in Sandwich Lease Options as the REI. You just never know what the TBer will do or can do.

  3. So many great pieces of advice but I think I like these two the best –

    “Pick a mentor who is successfully doing the type of business you want to do because you don’t know what you don’t know.”

    “It’s not how much money you make that matters, it’s how much money you keep.”

  4. I like your comment, “You will pay for eduction, either ahead of time from a mentor or by the mistakes you make as you go through the process.” so true, you will also pay for the work done, one way or the other, you can pay up front with fewer headaches or you will pay in the end when the work is not done right! But make no mistake, one way or the other…You’re going to pay! Took us a while to figure that one out but now that we have we have much more peace. Thanks for the post Karen,

  5. Karen great post! I like how you really set the facts straight and love how you say fixups and inspections are an investment and not an expense. Often times people don’t understand this. But it’s our job to provide a great home and making sure everything is working and top-notch is important!

    Thanks!

    John.

  6. Carolina E on

    Great article.
    I liked all these tips!
    We live in a world of abundance; there are more than enough real estate deals out there for all of us.

    Don’t wait until you know it all to get started. None of us know it all.

    It’s always a great time to be in real estate, you simply have to pay attention to the economy and real estate fluctuations to know how to direct your investments.

  7. Great post Karen. Very sage advice.

    I would add:
    -A lot of little red flags usually amount to one big problem
    -Good tenants don’t want bad properties, no matter what side of town they live in. Make your property desirable and you will attract desirable tenants.

    Jason

  8. Melody Conger on

    What a great list of tips. I liked all of them, but this one made me laugh out loud:
    If a potential tenant says, “the Lord will help me make my payments” (does this happen only in the South?), you can be pretty sure you’ll end up evicting them both.

    Thanks for the terrific insight!

  9. Rule # 1 in real estate investing, Don’t loose money… Simple concept, yes, easy to do, NO! Take all of this advice and learn from it. For some of us (Me) we have to learn the hard way.

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