Real estate investing is at an all time high right now and for good reason. If you watch any of the flipping house shows you will know why. They typically start with what looks like an amazing deal followed by problem after problem and show the investor making 50 to 100 K at closing. They all seem to have a spouse or partner who wants to "overflip" the property but end up getting more for the home in the end. They really make it look glamorous and easy. This is NOT real life! You have to work hard, hit the streets, market like crazy, and always stay up on the latest trends and laws. Here are my top ten tips for real estate investing on any level.
- Stay Honest I was always taught that in the end if you do good, honest business that good things will return to you ten fold. I started wholesaling houses and maybe I could have been shady and made more money on one deal but I was honest and have made money on SEVERAL deals. If you are honest and make this a win/win situation for people they WILL refer you.
- Have a Heart Most people on this side of investing don't truly want to sell their homes but are doing so because of financial strain, too much upkeep, or a combination of both. I really try to help all my sellers out of a tough situation while making a decent profit. I've struggled in the past and it sucks and can be very embarrassing. Try to understand where they're coming from.
- Answer your phone I have gotten several deals strictly because a seller tried other investors first and said they couldn't find one to answer their phone. I know it can be scary at first talking to a stranger but if they are that motivated they were inclined to call there is a GREAT chance you are MISSING THE DEAL if you don't answer!
- Don't promise something you know you can't deliver How many times have you seen a bandit sign that says "can close in 2 days"? Heck most times you can't even get a title search back in my area in that amount of time. One of the worst feelings is having to go back to the seller and say sorry I can't get that done. It will pretty much kill any referrals for more deals and make you look like you don't have a clue what in the hell you're doing.
- Market like crazy Bandit signs, Google Adwords, Craigslist, Twitter, Facebook, etc. I began with a small google adwords campaign and about 5 bandit signs. I was getting a few calls here and there and then BANG! I put out a few more signs on a Friday night before Memorial Day ( at least a 3 day sign placement) and I was so busy I had a long list of appointments to look at all these homes. Here I was a newbie and freaking out! Did I land all those deals, no but at least I got a chance to bat. If you don't get out there and market yourself who will?
- Don't quit your day job I still work full time and invest on the side. I will continue to do so until I have reached my goal of 20 buy and hold properties and a great continuous cash flow. I started off wholesaling to gain capital which lead to some fix and flips and now I'm concentrating on buy and holds. People who quit everything to concentrate on investing are destined to fail unless they start off with great capital and possibly a great mentor. I would NOT recommend this!
- Set reasonable goals What do you want out of real estate? Do you want side money, a new career, to be your own boss, to fire Donald Trump some day? Start small but always dream big. Set your goals to something that may seem a little uncomfortable but attainable. Don't expect to start off making millions your first year. If you set your goals too high and you don't reach them you are far more likely to quit. If you do become a millionaire in the first year we need to talk!
- Keep great records Keep all expenses and earnings separate from your personal finances if at all possible. Maybe start a business checking account or try to apply for a business line of credit. It's hard to ask for credit though if your business is just getting started FYI. I started a LLC to obtain my properties under. It cost me $40 through my state website and was very simple to do. Anything you can do to keep things separate, DO IT!
- The correct forms for your agreements Make sure you cover your backside just in case something unforeseen happens and you have to walk away from a deal. I joined the epartner software through Freedom Mentor but there are free sites out there as well. If I had it to do over again I would probably have joined BiggerPockets.com and started out for free. I am a member there now and it is awesome for getting free real estate agreements and free info from investors who have been there, done that. Freedom Mentor has been great as well and does offer live coaching calls to discuss any problems that can and will pop up but is a little pricey in my opinion.
- Don't be afraid to pull the trigger! Most people aren't comfortable calling up strangers, knocking on their front doors, or going to view their homes. It's like a blind date. What could happen on a blind date? You could get a crazy psychopath that is clingy and wants to marry you. (Sorry, that was a little too personal.) Or you could also get some wonderful opportunity that you would have never thought possible had you not gotten out and gone for it! If you got the right paperwork as I stated in step 9 then how much risk is there in a risk free contract?? ZERO!! Take a deep breath, make sure all your ducks are in a row, and PULL THAT TRIGGER!
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