It seems these days that everyone is buying, flipping, or renting properties – and making money in the process. Although this may seem to be the case, the reality is that real estate investing is much more than “buy, sell, collect, repeat.”
You may have heard that your first real estate investment is the most difficult one. This is true. The first deal is usually more difficult because there is still a lot to learn; but you also know that getting started requires a first step. No one will ever be 100% ready.
So, if you are new to the real estate investing game, here are a few tips to keep in mind before you jump on that first deal!
We’ve all heard the phrase “go big, or go home,” but this doesn’t exactly apply to all business strategies. When you’re just starting out as a real estate investor, it isn’t always the best idea to jump head first into a huge project, like purchasing a 50-unit apartment complex. Your best bet is to start small, with something like a condo or single family home, which will allow you to get your feet wet and learn what it takes to get the job done. You may find that you love it, and end up making more real estate investments over the years.
On the other hand, you may decide that real estate investing is not the business for you. It’s much better to find out what works for you after a single, small investment than it is to find out that this isn’t for you right in the middle of a huge development project. Be patient, you’ll get there.
You Won’t Get Rich Overnight
Unless you already have a lot of money sitting in the bank, it will take some time to make a significant amount of money in real estate. Instant buying and selling can work, but doesn’t usually lead to long-term wealth. You will have to create a plan for yourself, do your due diligence, and take action in order to make any investment a profitable venture for yourself!
If done correctly, real estate can provide serious wealth and a lifestyle that other business ventures cannot, but it takes time, hard work, dedication and sacrifice.
No One Is Going To Learn For You
Do your homework. Learn as much as you can before you get started investing in real estate. Read real estate investment blogs and books, join your local REIA or other real estate investing club. Talk to other investors, ask questions. It is up to you, and only you, to learn everything you can about this business – no one is going to learn for you. Rather than listening to that same song over and over on the car ride to work, turn your car into a mobile university. Pop in an audiobook and soak up all the information you can.
You must commit time to learning. Real estate investing can be difficult, but if you utilize the tools available to you, and make better use of your time by educating yourself, it can be a very lucrative and fun experience.
Math matters. You make your money when you buy, not when you sell. If you don’t have the right math going into a deal, you will never realize the right profit coming out of it. If you overspend in the beginning, there’s a good chance you will never make money on the deal. Be sure to run your numbers before you buy, because the numbers won’t lie to you; the math is what tells you it’s a good deal, the math is what will calculate your profit and cash flow, and if the math is done correctly, the math is what is going to make you a millionaire.
The market may be totally different than it was just five years ago. It may seem difficult, but there are good fix and flip homes out there. Remember, you are in a race with thousands of other investors – all over the world. If you are looking to make it out on the top, make sure that you are a bit more educated, and clever than other buyers – you’re also going to want to move quicker than most once you find the property you want to get started with.
Give it your all when looking for your next investment property! Look everywhere, even if that means sending direct mailers out to local homeowners, or “driving for dollars,” on the hunt for that perfect investment home. However you choose to move forward, make sure you do it with everything you have. Although it may take a little bit of time for you to find your diamond in the rough, keep moving forward.