Anyone can invest in real estate. As complex as the business can be there is nothing stopping you from making an offer on the next available property you see. With no formal education needed many would be investors are confused with exactly how and where to get started. If you are looking for a roadmap into the business here are five tips for every beginning investor.
Start with a plan. What are your investing goals? This is the most basic question for any new investor. With so many different investing options out there you need to have a plan. Are you looking for short term returns from rehabs and flips or do you want long term security from rental properties? What markets are you willing to invest in? Do you need a partner? There are dozens of questions you can answer but everything starts with your goals and your plan of how you are going to achieve them.
Focus on education. Regardless of the business you are getting into you need to be educated in that area. Real estate can be overwhelming in that there are so many areas and it is heavy in financial lingo. You don’t need to be an expert in every one of these areas. There are investors who have been in the business for years and still don’t know everything about it. Focus on one new area every week or two and learn as much as you can about it. Once you feel you understand it move onto the next one. As long as you are constantly expanding your knowledge base you will be fine.
Talk to local investors. You can read a dozen books and look at investing websites all day but they will not give you the true sense of the business. The best way to truly learn the business is by talking to people you are in it. This is easier today than ever before. In most areas there is a local real estate investment club. Go to as many of these meetings as you can. Talk to investors and pick their brains. Most investors will offer friendly advice or give you some helpful pointers. You can learn more from a few meetings than anything else you do.
Start small. Contrary to what you may think you probably won’t retire from your first deal. The home run deals are few and far between. The most likely scenario has you getting involved in smaller deals before you get to that point. Having ambition is great but you should also keep it in line with reality. There is nothing wrong with starting small while you learn the business.
Take action. There will never be a perfect time to get started in the real estate business. You will never have enough money, education or contacts to feel totally comfortable. At some point you need to take a leap of faith and take action. This doesn’t mean you should take unnecessary risks. If you do your due diligence and feel that the deal makes sense go ahead and make an offer. This first step is often the most difficult.
Real estate can be a great business if done right. There is always hesitation starting anything new and real estate is no different. If you are confused how to get going start by following these five tips.