I’ve heard this question many times so lets discuss it.
First of all, congratulations and welcome to the club. I think it’s a great idea and I think that almost anybody can be a successful real estate investor.
Given that, there are a few things that I would keep in mind as you’re looking to buy your first investment property.
What Is Your Goal?
First off, what is your goal? “Oh, I want to make a bunch of money.” Yeah, but what do you really want that to look like?
Because there are so many different ways to invest in real estate, you want to think about exactly what are you trying to accomplish?
Are you trying to create supplemental monthly cash flow? Are you trying to replace your W2 income? Are you looking to flip a few houses on the side to make some cash to pay for something else? Or maybe some kind of combination?
If you really know what your goal is, then you create a plan up from day one that will be the best at helping you accomplish that goal. And it needs to be a little more specific than, “Well, I’d just like to make some money.”
If you set up a good plan from day one that is focused on helping you accomplish your end goal, then you are much more likely to get there and get there a lot sooner than if you wait and make that plan later down the road.
Once you have the plan, then you can go, go, go until you get the first one done. Okay, why do I say it like that…?
The First One Is The Hardest
The first one is the hardest. It was the hardest one for me to get done, it’s hard as one for most people to get done.
So do not get discouraged! It will happen if you take action and you continue to move forward step-by-step, and you refuse to quit until you have become a real estate investor.
After you get the first one done, it’s much, much, much easier to get number two done, and then number three done. So do not give up.
The first one is the hardest for almost everybody, but once you get through it, you will learn so much, and you will be smarter and more prepared when you go to do number 2.
Focus On One Type Of Investment
Because it’s so hard to get that first one done, I often tell people to focus on one type of real estate investment.
All the time I hear, “I’m going to wholesale and I’m going to buy some rentals and I’m going to flip properties, and then I’m looking at commercial and maybe I’ll buy a hotel.” That’s fine…and it can all be done, but when you don’t have quite as much experience, it’s usually a better idea to hyper-focus on just one type of real estate investment.
Ask yourself “What is the first type of investment that will help me get towards my goals?” Now that you have that…stay focused!
It’s much easier to find that deal and you’re much less likely to get distracted by people saying, “Oh, you should do this…oh no, you should do this,” and they will tell you that.
Really try to stay focused until you get the first one done. Yes, your path may change, but if you keep focused in the beginning, it will make it much easier for you to accomplish the first one.
What do we need to accomplish the first one? And for that matter, the second one, the third one and the 500th? You need two things…
How Will You Pay For It?
The first thing you need is money. Nobody’s going to give you the house for free…There are lots and lots of ways to finance real estate.
You definitely want to educate yourself on it on the different options and decide what is best for you.
Are you going to use a hard money lender? A private money lender? Do you have your own cash? Are there some people that would like to go in with you, who don’t want to do the work, but they would like to lend some money and then you can work out a split?
You need to know how you’re going to pay for the first investment and have everything set up and ready to go. When that deal comes along, if it’s a really good deal, it’s not going to be there waiting for you to go figure things out.
So make sure you have your financing set up. What else do you need?
Find A Property
You need to find a property. There are many different ways to find investment properties as well.
Yes, you can look on the MLS where they have most of the properties listed, but that might be really difficult because everybody can see those properties.
You can do your own marketing. This is where you start a marketing strategy for people that need to sell a house quickly, need you to come to sell a vacant house, or sell a property that has been damaged. There are a thousand different ways to market for investment properties and we’ll probably save that for another article, but you should know that there are plenty of options.
Have you met some other investors who also sell investment properties? Can you find an agent that locates a lot of off-market properties?
Start by creating a plan that will get you to your goal. Try to stay focused on just one type of investment at first.
Get your financing set up and start looking for that first property.
Know that the first one is usually the hardest but it does get easier and I really believe that the benefits are worth all the hard work.
Don’t give up and you will be successful! I hope this helps and if there’s anything we can do, don’t be afraid to reach out.