This will be the first in a series of articles about getting started in real estate investing.
There are many ways to get started in real estate investing. Maybe you are a home owner and you are already involved in real estate investing, or perhaps you are currently renting and are saving up for your down payment. Real Estate has been “in flavor” the past few years. There are many tv shows that showcase you how much money you can make or lose. There are also the late night infomercials that promise you millions part-time. The truth is that you can make a lot of money in real estate. Real estate is still an excellent investment if you do your homework and are prudent in your decisions. The people that are in trouble right now bought on speculation, didn’t do their homework and are using risky financing products, lost their jobs, are over leveraged, etc. No matter the issue, there is always a strategy to make money in real estate no matter the state of the economy because people will always need a place to live.
What is the first thing I need to do to get involved in real estate investing?
If you decide to become a real estate investor, you need to treat it as a business. You are in it to make money, afterall. Hobbies are great and I have a lot of them, but real estate investing is a business and you should treat it as such. The first thing you should not do is buy any books or tapes from a late night infomercial. Also, do not buy any expensive packages at an EXPO from a GURU. You can find a lot of these for pennies on the dollar on ebay or at your local half-priced book store if you decide you need them. You can find reviews of these various courses on www.johntreed.com. The second thing I suggest is to read as much as you can about real estate investing. Go to your local library’s website and see what they have available. They probably won’t have a ton of material, but it is a free source. After that, try amazon.com and buy a few used books on real estate investing.
After reading up on the subject as much as possible, I feel it is important to begin building your real estate investing network. Simply Googling “real estate investing club” and your area should provide you with many options (however, if you can’t find any, e-mail me at email@example.com). Another option is to get online and read as much as you can at www.biggerpockets.com or www.creonline.com.
At your local real estate club, beware of “mentors”. There are a lot of self-proclaimed GURU’s out there just out to make a quick buck. I’ve met them and handed them my money only to see them either fail to deliver what they promise, or just plain not show up. If you do decide that you’d like to hire a mentor, I would figure out their motives and make sure they have an incentive to follow through on their promises. In general, and specifically in real estate investing, it’s important to network and to find an honest mentor (or perhaps a few).
Once you’ve gotten out and mingled, it’s important to figure out what your goals are.
Goals are important. It’s difficult to get through the hard times if you don’t have something to focus on. Maybe your goal is to passively make tens of thousands of dollars in cash flow or maybe you want to work really hard and rehab 50 houses in a year. Maybe you just want to have a few rental houses. For me, I’d like to have enough cash flow from rental property that my wife and I have the option of working or not. While we both have good jobs and are in a good situation, our temptation to stay home will undoubtly increase once we have a child.
To be continued…..