How to Get Started in Real Estate, in 90 Seconds
Not once but TWICE in the past 3 days, I’ve been presented with this question: “I know you’re in a hurry, but is there any quick advice you can give me about how to get started?”
It’s not unusual that a new investor thinks there’s some single secret to real estate investing success—but it’s a real challenge when you’re expected to summarize it in the time it takes you to get from the elevator to your car when you’re running from one event to another.
Still, I was able to sort through the hundreds upon hundreds of things I always want a new investor to know to get to a few that seem to summarize what I know will keep them from being successful over the long and short term. I thought I’d share these with you this week:
- Suck up all the education you can—especially all the FREE education. It’s usually best to focus on a single strategy when you’re getting started, but it’s not good to limit what you learn to a single area of investing.
For instance, I did mostly lease/options when I first started in real estate, but I learned a lot about how to “sell” them from realtor classes and a lot about how to manage them from landlording classes.
I’m also a big believer in balancing the “paid” education you get from gurus with real-life education from regular investors. Although listening to the local wholesaler talk about how he does deals isn’t as motivating or as well-organized as listening to the guru’s webinar, you’ll get a better idea of neighborhoods in which to from the former than the latter.
And MULTIPLE exposures to MULTIPLE local experts is helpful, too. When you talk to lots of people, you’ll quickly learn that they’re all doing things a little differently, and yet are all successful. This is extremely confusing at first (“So which one should *I* do???”), but, as you more deeply understand why investor A likes neighborhood A and investor B thinks it’s the worst place in town to invest, it helps you discard the very stressful notion that there’s some perfect way to make money in real estate, and that if you don’t figure it out and follow it, you’re doomed to failure.
So every time your real estate association opens its doors for a main meeting, networking meeting, subgroup meeting, whatever—you should be there with bells on.
2. Do not for one second listen to anyone who hasn’t successfully done that you want to do. On the flip side, you should absolutely NOT take advice from or get your opinion of the state of the real estate industry from someone who’s not up to their elbows in it every day. This includes fellow newbies who’ve never done a deal, but like to talk about how impossible it is. It includes your friends and family who are full of wisdom on what you should and shouldn’t do despite that fact that their only point of reference is Great Uncle Joe, who lost it all in real estate in the 40s. And it includes the media, too: Katie Couric did NOT buy a house last week, and I did. Who’s more qualified to tell you about “the market”, do you think?
3. Try to recognize the things you’re doing in order to avoid doing the things you should be doing. In other words, anything you’re telling yourself that is stopping you from making offers is just procrastination, even if it seems very logical (“But I don’t have an LLC! But I need to get my real estate license! But I’m going to that bootcamp next week!”) As long as you have a safety net that will allow you to get out of a bad deal—like, say, a contract with an inspection contingency and an inner circle membership—NOTHING is more important to your success than just doing it.
4. Keep ‘living poor’ beyond the point at which you could ‘live rich’, and never let your cash reserves disappear. This is an unpopular thing to say: after all, weren’t you sold every home study course you every bought on the idea that you could expand your standard of living almost instantaneously?
That’s fun, but it’s not smart. When your real estate profits start rolling in, don’t make the mistake that so many people do of using your first few checks as an excuse to buy everything you’ve been ‘denying’ yourself.
If you can keep living like you’re living now for a year or 2, pay off all of that burdensome consumer debt (the credit cards, the car, the student loans, even the mortgage on your house), and put aside some cash reserves for your business and your personal life, you’ll be bulletproof. If you spend all your profits, you’ll always be short on cash and always be anxious. Your goal is not just to be rich but also to be happy, and that won’t happen until you’re truly financially secure.