07 Mar A Thorough Guide to Getting Started as a Real Estate Investor
In the Old Testament book of Genesis, God tells Adam and Eve to “be fruitful and multiply…” And while God was talking about bearing children and leaving a legacy, I believe that these instructions provide a solid foundation for starting any business.
You must learn to be fruitful in your business before attempting to multiply. Many businesses fail because the owner tries to multiply or expand before he or she is fruitful. It is a sequential order that must be followed. First, be fruitful. Then, multiply. Finally, replenish or subdue the industry you are in.
Today we are talking about real estate, so it is important to learn to be fruitful with one or two properties and then start to multiply. Once you learn to handle 5 then 10 then 20 properties, only then will you be able to replenish and subdue.
Below I have listed some practical steps that you must take in order to be successful in starting in real estate investing. Think of this as a thorough quick-start guide.
A Guide to Starting as a Real Estate Investor
1) Inventory Yourself
Think through your core competencies, personality, tolerance for risk, ability to deal with difficult people, and motivation. This is not the time to skate around the truth. Be honest with yourself, and get the opinion of some close friends and family members. This will be invaluable as you begin to grow and multiply in the real estate business.
2) Determine Your Strategy
Before you get started, figure out your strategy. Will you buy and hold? Fix and flip? Rent to own? Start with a single strategy in mind.
3) Develop a Guide Map
This includes your written business plan, as well as identifying competency gaps and developing a team. What connections do you have that will serve you well on your business venture?
4) Prepare Yourself Legally
Do the work now to prepare yourself legally. Determine your legal structure (SUB S, LLC, or LP). Also register your business name and get a tax ID number. This is not the fun stuff, but it’s incredibly important to your success.
5) Get Your Finances in Order
From where will your initial funding come? Who will take care of your bookkeeping? What are your income sources? Primary cost structures? If you don’t know what I’m talking about, check out the Business Model Canvas.
6) Find an Experienced Coach
Your chances for success multiply when you have someone by your side. Read real estate books, go to seminars, or hire an in-person or by-telephone coach. The market is ever-evolving, which means you need to stay updated on new protocols and procedures and trends. The learning never stops, and it’s very helpful to have a coach on your team.
7) Hire a Good Team
Make sure you have someone you trust in each of the following positions: real estate agent, contractor, property manager (this might be yourself in the beginning), mortgage broker, banker, insurance agent, accountant, and attorney.
8) Remain Focused
Remain focused on the money. Don’t get too attached to properties. Don’t be afraid of section 8 housing. And always crunch numbers and make sure there’s cash flow! It needs to be a two-way street. Don’t let one property drown you.
Most importantly, get in the game. Sometimes you’ll lose a round, but it’s important to try. I’d encourage you to just take the next step. It’s scary and might be painful. But imagine where you’ll be in 5, 10, or 15 years if you just start!
And if you follow these guidelines, you’ll be set up for lasting success.
P.S. I’ve created a FREE library of resources for you. Sign up below and get instant access to tons of resources for beginner real estate investors!