If you have made the decision to begin investing in real estate, you have already taken the most important step. Not that the hard part is over, but committing to the business is a huge accomplishment in and of itself. At this point, you may be wondering how you are going to turn your interest and passion into a successful career path. There is one thing that has proven to help: preparation. One of the biggest mistakes new investors make is thinking that deals will just fall into their lap without so much as lifting a finger. Of course, that is not the case. It takes great preparation, work ethic and desire to start closing deals. The most important time for any new investor is the first few months in the business. Before you look at a single property, you need to develop a plan of attack.
What do you want out of the business? If you are like most investors, you probably want to make a million dollars in the first year. Financial goals are great, but you need to keep them in line with reality. In addition to financial gains, investors can be looking for a more flexible work schedule or a way to supplement their incomes by closing just a few deals a year. Whatever your goals are, they are personal to you. By writing down what you want to achieve from investing, you will have something to revert back to when things get off track. Instead of running around looking at properties and making offers on every new deal, list out your goals and aspirations.
Having goals is great, but you also need a plan on how you will achieve them. Are you going to spend money to market? Do you have a relationship with a realtor who has access to bank owned properties? Are you going to flip properties or look to hold them long term? There is a lot that has to be figured out. Most of it will change as you go. By creating an action plan, you can figure out what works for you and what doesn’t. There are many different ways to invest in real estate. Having goals is important, but unless you know how to convert those into real deals, you will be up the creek without a paddle.
It is very important to educate yourself in the business. Real estate can be very confusing and is often misunderstood by people outside the business. If you don’t know what you are investing in or if your plans aren’t realistic, you will end up wasting time and possibly money. In your first few months, if you do nothing else you should focus on your education. Not only will this serve to protect you, but it will also give you some help in figuring out which are the best investing options for you. It is best to take on one area of the business at a time before moving on to something else. Between knowing the different types of properties and learning how to build deals, there is always something you can pick up. The time and money you spend on education is often the best investment you will make. You are investing in yourself and your future. You need to know as much as you can about the business you are looking to get involved in.
The next step is to assemble a good team around you. Depending on your real estate goals, you may need the help of a realtor, attorney, mortgage broker, contractor and accountant. You should also find someone who you can bounce ideas and deals off of and get a second opinion. If you make a point of it to meet just one new contact every day for your first month, you can build a good network in no time. The more people you know, the easier it will be to find deals, close them and build your pipeline for the future. The real estate business is often done by people who are comfortable and familiar with each other. Every successful investor started out just like you. If you truly want to succeed, you need to put yourself out there and meet as many new people as you can.
Finally, you need to assess how much capital you currently have access to. There are ways to close deals without having money, but you need to know what you are working with before you start. If you are going to find deals through direct marketing, you need to know how much you can spend. Seemingly little things like title searches to credit checks can quickly add up and reduce your reserves. There are plenty of ways to find deals without spending money, but you need to know your budget and know how much you have if a good deal comes your way.
The first few months can be very overwhelming if you do not go into them with a plan. If you lay the foundation of a good business when you are starting out, it will motivate you to keep moving forward. Instead of trying to do everything at once, set a list of goals every morning you wake up and stick to it. If you accomplish these small tasks, it will keep you wanting more. Soon enough you will have a real deal to spend your time on. Wanting to invest is great, but make sure you do so with a plan.
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