So many people I know, especially lately, want to get involved in real estate investing. I personally cannot think of a better way to insulate yourself from inflation and lock in retirement cash flow than being a real estate investor, but what do you do to get started?
I have been investing in real estate since 1999 and between then and now, I have familiarized myself with every possible incarnation of investment advice and I have gone to every seminar ever taught! I have weeded thru hundreds of wasted dollars learning tips tricks etc., that while they may have some merit on some rare occasions, are more often than not polished up turds sold to people looking to get rich quick and in turn line someone else’s pockets with the would be investors hard earned dollars.
The truth is, real estate investing is not sexy, it is not even terribly exciting. If it is, you may be doing it wrong!! Investing should be done with a level head, guidance from people you trust, and without passion. It should be done with an eye only towards equity and in my opinion, future cash flow. Even if you find the perfect flip that will make you a ton of money now, unless you are reinvesting the profits into MORE real estate, you will lose thousands if you compare the quick money to the long term growth, appreciation, and cash flow in holding a rental home for 30 years.
I do not claim to be the expert on investing, and I am lucky to be surrounded by other people whose opinion I can count on and local groups who offer a great base of knowledge that even this old man can learn from. I encourage the would-be investor to reach out to us to set a time to talk about goals and pathways to success, and to always keep an eye on the long-term plan.
With that in mind, here are my best steps for any investor getting into the business.
- Find a trusted source of information – this is where we tell you that you should be working with an agent. Not just any agent, us preferably, or if not us, then another agent who is not out for a quick sale, but who puts together a prospectus for the evaluation and return on any given property. We scour all sources daily and provide the good deals to our clients no matter where they come from. Local wholesalers give us some early access, we even still find deals on the MLS. We use auction sites, anything we can do to find homes, because we know what to look for. The truth is, we invest too so we are always looking and receiving good projects but we can only do a few at a time, so when we are full, we send everything to our clients for their benefit. We are not even just commission driven, if the deal does not pay a commission from the seller for whatever reason, we will charge a small fee for handling the front end and work to create a long-term success story for both of us.
- Join investor networks – I cannot stress enough that there are many fakers out there and they all belong to investor networks, but not all members are fakers. Local groups have some of the best and most giving people in the area who generally are freely giving of advice to those who seek it.
- Get your money right – you need money to invest, no matter what the infomercial told you! We have partnerships with local nontraditional lenders, but even they will want you to put some skin in the game.
- Consult a cpa or an attorney – you need a team on the financial end to help you protect your assets and set your tax base up correctly. I will use a new LLC for each deal, but your advisor may tell you differently.
- Look at properties! – You need to look at homes to be comfortable with what goes for what. This step can be skipped if you already trust your agent to only bring you the good ones, but generally as a rule of thumb, I think it makes sense to look at houses even before you are ready, so you can “paper trade” as I call it and run scenarios to get yourself comfortable and in a realistic mindset for pulling the trigger.
I will keep this list to 5 for now, there are probably 20 more things at least, but I think this is a good start for anyone who is looking for info. Please do not hesitate to call me or text me anytime to set up a private consultation!
To your success!
In this newsletter and related information, I may reference personal investment results and cashflow numbers. Please understand my results are not typical. I’m not implying you’ll duplicate any of my results (or do anything for that matter.) The average person who reads and studies “how to” information gets little to no results. I’m using any reference for informational purposes only. Your results will vary and depend on many factors, including but not limited to: your background, your experience and your work ethic. All investment entails risk, as well as massive and consistent effort and action. You can lose money investing in real estate.