“So, How Do I Get Started?”
Ya’ll do realize the irony of asking the question, “I know you’re in a hurry, but is there any quick advice you can give me about how to get started?”, right?
Because I get asked some version of that question at least 100 times a year, always by a newer investor hoping that there’s some wisdom I can drop on them in the time it takes to get from the elevator to my car when I’m running from one event to another. Wisdom, preferably, that will make their entry into the business rapid, painless, and above all profitable.
The irony is that there IS no single answer to the question, “How do I get started?”.
In order to properly get into that topic, I’d need to know about you: your goals, resources, preferences, exit strategies, needs, wants, and and and…and in no circumstance would that be “quick” advice.
If there were such a thing as “quick” advice, there would be no need for mentoring programs like Fasttrack to Financial Independence. Or, for that matter, for 4-day bootcamps, or REIA groups, or any of the other support systems to which we are all so devoted.
Without knowing anything else about you other than that you don’t seem like a crazy stalker who’s following me out to my car to kill me, I can only tell you, GENERALLY, some of the things successful people when they get started. I can’t tell you what deal to look for (until I know what you plan to do with it) or how to get money (until I know your credit score) or what to pay (until you give me the ARV and repair costs), but I can tell you THIS:
- 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 concept.
For instance, I did mostly lease/options when I first started in real estate, but 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, there’s a lot to be learned from listening to how other people are implementing strategies right where you live.
Be aware that there are as many ‘right’ ways (and by right ways, I mean ways that the practitioners are willing to defend to the death) to do any strategy as there are people who do it, so try not to get overwhelmed by the fact that you hear one person say that no wholesale buyer EVER pays the fee until closing, and another say that it’s the only way she does business: you’ll work it out in the end.
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.
- Do not for one second listen to anyone who hasn’t successfully done what 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 both the naysayers in your life (“You can’t do this, you’ve never stuck to anything”) and the ‘professional students’ in your REIA group who are full of advice about how YOU should do deals (but have never done one themselves). And don’t forget the media–most of what you hear there is useless at best and misleading at worst.
3. Try to recognize the things you’re doing in order to avoid doing the things you should be doing. Most of the stuff that you’re telling yourself 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!”)
The reality is, assuming that you have your basic education in place, there’s no reason not to just dive in and start getting some deals. Anything you’re doing other than finding motivated sellers, making offers, and implementing your exit strategy is more than likely an excuse and a waste of time. 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.
- Live below your means, and always have cash reserves. When you do get successful, don’t make the mistake that so many business people do of using their first profits as an excuse to buy everything they’ve ever wanted.
Your goal in becoming a real estate entrepreneur is, I would guess, as much about financial SECURITY as it is about having stuff. It’s not just to make more money; it’s to make more money than you spend. It’s not to have enough money to buy happiness; it’s to have enough money to stop worrying about money.
Then keep this in mind: if you’re not careful, you could find yourself earning 2 or 3 or 10 times what you are now and still be broke. Or, you can plan to keep living like you’re living now–driving the same car, living in the same house, taking the same vacations–for a year or 2, and build some cash reserves for your business and your personal life.
Determine now to save, and re-invest, most of your profits until you truly are financially independent, and you’ll be far, far ahead of the game. In fact, with minimal personal debt and lots of passive investments working for you, you’ll be nearly bulletproof. Keep THAT goal in mind, and figuring out what you need to do to get there will be a lot less stressful.