Property Investment: 5 1/2 Tips for Success

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I was 12 years old when I took off my face.

Okay, maybe it wasn’t my whole face, but it was a good section of skin covering my nose, forehead, and chin. And if it hadn’t been for that rock getting in the way of the wheel on the scooter I was riding, I would have landed that jump just fine.

Stupid rock.

(Stupid kid.)

But it’s okay. I got better. My skin healed.  I learned.

Besides… chicks dig scars.  

Now I watch for rocks before doing sweet jumps. Or I just don’t do sweet jumps anymore.

But that’s the point of growing up: making choices and learning from those consequences. 

And in some ways, I’m still learning. Only today, those rocks are different. Today I’m not landing many sweet jumps, but I am landing sweet property investments, and most of the time I land them alright.

Every once in a while, of course, I hit a rock.

And it hurts. And I lose some of my face.

But it’s okay. I get better. My skin heals. I learn.

And chicks dig scars. 

That’s what I want to share with you today – some of the things I’ve learned; I want to point out the rocks so you can save some of your facial skin and stay pretty.

But not too pretty.

So the following are 5 and 1/2 tips for making your first (or next) property investment. Pay attention (or don’t. It’s all good.)

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5 1/2 Tips for Making Your First (or Next) Property Investment

1.) Surround Yourself With People You Want to Become.

Tonight I was watching Shark Tank and the guy pitching his company before the Sharks said “if you hang around four broke people, you are going to be the fifth.”  Although his product was fairly worthless, his words were oh so true.

If you want to succeed, surround yourself with those who are successful. (Tweet that quote, baby!)

It’s not tough, either; You have a few options.

  • You could handcuff yourself to a local real estate mogul and swallow the key.
  • You could hide some cameras around a real estate guru’s house.
  • Or you can hang out on BiggerPockets.

Take your pick.

2.) Stop Thinking So Much About It

People overthink the idea of a “property investment.” I’m not saying you should jump in unprepared, but come on – this isn’t rocket science. (Trust me – I’m friends with a rocket scientist named Jeromie and he also invests in real estate. He would know.)

Yes, there are a lot of steps involved. But you know what: so does making pancakes but somehow we all manage to keep stuffing our faces with them on Saturday mornings. (Some more than others… ehem.)

So stop looking at the staircase and focus on the step in front of you. (Yeah, you know it! Tweet that sucka!)

3.) Be Really Good at One Thing

I know in the real world it’s super-great to be good at a lot of things – like swimming, hunting a cougar with your bare hands, and being able to solder a copper pipe. But this isn’t the real world – this is real estate. (Okay, well it’s kinda the real world. But this is my blog post so I can say what I want. Sue me.)

The point is: you don’t need to be good at everything to get a good property investment. Pick a niche, pick a strategy, stick with it. Want to flip houses? Then stop trying to learn about rental properties. Want to buy notes? Stop watching Flipping Vegas.

Focus.

And while you are at it, why don’t you read a book or two on the subject you are interested in.  Not sure what to read? Then check out my list of my top 21 real estate books.

4.) Do Your Math Homework

When’s the last time you did your math homework?

12th grade? 10th grade?

Shame on you.

Go get a pencil and paper right now, because school is in session.

If you want to succeed in real estate, you need to do your math homework. Often. (Yeah… you know the drill. Tweet it, bro.)

Tell me: what is the cash on cash return on investment if you were to make $540 per month in cash flow on a $35,000 investment? (Yes, seriously, tell me below in the comments. This is part of your homework.)

Now, if you want to put your big boy or big girl pants on and do these investments the right way, head on over to BiggerPockets.com/analysis and check out the BiggerPockets Property Analysis Calculators.

They are frickin’ sweet.

I can say this for two reasons:

  1. I made them (well, I was part of the team)
  2. I use them.  Every day. Every deal.

So go do your math homework. Find a duplex on Zillow, run it through the calculator, and let me know what kind of cash flow you’d be getting (or losing.) Report your findings below in the comments. This is also your homework.  Stop your whining. No TV until you finish.

I’m serious, young man (or woman.)  Or old man or old woman. I don’t care. Just go do your homework.

5.) Go Solve Someone’s Problem

Want to know the ultimate secret to success?

Tough -I don’t know it.

It probably has something to do with sleep. Or productivity. Or Vitameatavegamin.

But if you want to know a helpful tip for success in real estate, I can give you one: go solve someone’s problems.

Here’s the thing: problems are like pimples- everyone’s got ’em but no one wants to admit it. (yeah, I suppose you could tweet that but that would be weird.)

If you want to find success, especially when it comes to finding a great real estate deal from a motivated seller, go out and help fix someone’s problem.

This month I’m helping one of my best friend’s out by lease-optioning his house (technically, I’ll be doing a lease option sandwich on the house). He had a problem (needed to move quick, not enough equity to fix it and sell it) and I had a great solution.

I wasn’t focused on getting the most money out of the deal. I wasn’t focused on impressing my friend with my fancy real estate business cards. I was focused on solving his problem.

And a no-money-down deal for me will make it pretty awesome.

5 1/2.) Share the Wealth

(I’m only giving this one 1/2 a tip, because it’s a little self serving.) 

I’m not much of a “thought leader.”

Being one sounds exhausting.

But today on Twitter I did manage to put together a few words that sounded intelligent. I said:

And I mean it. I think everyone has lessons they’ve learned, and it’s important to teach them. You’ve hit rocks – you’ve lost some skin – so get out there and talk about it.

I tell you: I’ve learned more about real estate investing by writing blogs than I ever learned from reading blogs. But blogging isn’t the only way (but it kinda rocks.)

There are a few good actionable ways to share your knowledge:

  1. Start a BiggerPockets Member Blog and talk about your journey. It’s free and anyone can start a blog.
  2. Answer questions and get involved in the BiggerPockets Forums.
  3. Meet with local real estate investors often. Whether you are brand new or have been investing for years: get together!

As you progress on your journey, just remember to share the wealth of knowledge you’ve obtained.

Property Investment Wrap Up

Look, if you want to get a property investment – we both know you can. Stop doubting.

You have the world’s greatest real estate resource sitting right in front of you (BiggerPockets, not me) and it contains more information than all the real estate books in history combined.

So get out there, find that next property, stop making excuses for yourself, hustle until your pockets are bigger.

And don’t forget you have some homework to do (see #4 above.) I expect your answers in the comments below.

Class dismissed.

P.S. Would you mind Tweeting This Post or Sharing it On Your Facebook?  Thanks!

About Author

Brandon Turner

Brandon Turner (G+ | Twitter) spends a lot of time on BiggerPockets.com. Like... seriously... a lot. Oh, and he is also an active real estate investor, entrepreneur, traveler, third-person speaker, husband, and author of "The Book on Investing in Real Estate with No (and Low) Money Down", and "The Book on Rental Property Investing" which you should probably read if you want to do more deals.

37 Comments

  1. Great post! Unused to be proud of beig able to do many things sorta well. You are much better off mastering something and then moving on to master something else. People don’t want someone who is sorta good at a lot of unrelated things. They want an expert at what they need done.

    Stoping thinking so much was really hard for me to do. But boy does it make you happier and it usually equals more success as well

  2. Forrest Baumhover on

    Great article. I have one property and am still trying to work with some folks in the Tampa area on a deal that makes sense. Since this seems to be a rising market, it’s not as easy to find the conservative cash flow deals…BTW, your answer is 18.5% annual cash flow–540×12/35,000=18.5, I believe.

    I like reading your articles, and hope to post one as soon as a deal comes through!

  3. Thank you Brandon for another great and insightful article!

    Here is my homework:
    Purchase Price $ 175,000
    Purchase closing costs $ 4,000
    Downpayment $ 35,000
    Total Invstment $ 39,000
    Loan amount $ 140,000
    Monthly Mortagage $ 730
    Monthly Insurance $ 50
    Monthly Property Taxes $ 453
    Other Monthly Expenses $ 594
    Monthly rent $ 2,700
    ROI 26%

    Please grade my homework and thank you in advance!

  4. I’ve recently started following the posts here at Bigger Pockets, and I just wanted to say thank you for the positive tone of your posts. A lot of other sites, while trying to be helpful by letting you know of the risks in investing, do so with a very negative tone that discourages you from trying. I especially like this part of this post: “we both know you can. Stop doubting.” So thank you for the positivity, for the advice, and for sharing the wealth.

    Just a quick question, aren’t cash on cash return and return on investment two different calculations? Where does “cash on cash return on investment” come from?

    • Brandon Turner

      Thanks RLS! I firmly do believe anyone can do it- it’s really not as hard as people make it seem .It might be a little daunting up front, but it’s just step by step stuff! And we, at BiggerPockets, make it our goal to make those steps as easy as possible 🙂 Thanks and I’m glad to have you here at BiggerPockets!

  5. My answer from 20 years ago is 18.5%. I would have believed that I needed a 30% downpayment to buy income property since that is what every bank that did those loans in my area required.

    My answer today is infinity. I learned that I can buy a house and place it on my line of credit while I make renovations. I then apply for permanent financing and since the property appraises for significantly less than my purchase price, I am able to borrow enough money to pay for the purchase and renovations so that I have zero dollars of my own cash involved. Thus, my return is infinity. Then repeat as many times as you can find good investments and continue to get financing.

    Love the question, but always question your assumptions!

  6. To answer your question Brandon, I have some concerns about the “hood” and have to physically see the place yet.

    Thank you for your words of encouragement and reassurance!!!!

  7. ROI = 18.5%
    Not because I have done the math but because I learned it from my great biggerpockets team. Like Kiyosaki said the rich mindset value team work. LOL just for fun!!! Great post

  8. I couldn’t agree with Tip #2 more! The worst action is inaction. I jumped into my first deal head first. I made snap decisions based on “give or take” math and with no real strategy. I bought a $165,000 City Park duplex. Best case: I’d rehab it, rent it, and make bagillions of dollars. Worst case, I’d lose my shirt, the duplex and my credit. I offered above list because I believed it was worth it. I winged it on the rehab and finished a partial gut in 3 weeks + 1 day (I gave my contractor 3 weeks).

    It rented right away so I thought, “Why not list it and see what I can get for it?” Eventually, at $250K, I got a deal. After closing costs et al, I pocketed $34K in 3-1/2 months.

    If I’d analyzed the initial purchase to death or ran too many numbers, I’d likely have never got that first deal or the cash to do my next 2. The real estate bug bit me hard but after looking at its potential, I realized it could be a career and lifestyle. I’m now a full-time broker.

    Jump in! Make smart but quick choices and believe you can make it work out. You’ll surprise yourself.

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