If you want to get started in real estate, then you’ll need to read this article over carefully. I want to continue from the previous posts I wrote on how to secure your starting position in real estate. If you have watched any info-mercials or attended any guru conferences on real estate, you are probably just blown away by them, and not really sure how to start out. That is why I hate those info-mercials and conferences – it’s all hype and no solid steps to help you get started.
Well I actually have been in trenches, working to establish myself in the field of real estate. Now that I have had success in the field, I am able to convey and help you get your real estate business off the ground. So let’s get right in to the steps necessary to start off on the right foot.
First, Don’t Bite Off More than You can Chew
This one is really critical, even though it seems obvious. What you want to look for when are just starting out, is something low risk, without much work required to fix the place up and prepare it for sale or rent. Like I have previously mentioned, I did just the opposite when I started out. I started out with a 2,600 square foot house in a nice neighborhood that was in need of a massive amount of repairs. Also, I had a partner in the deal, and we did not thoroughly discuss our plans for the house, and did not write down the responsibilities that we would each have in the property. This lead to a disaster, and I ended up losing 2 years, at least 100 hours of labor, and $8,000 on the deal. Needless to say, I dissolved that partnership, and sought a different method. So bottom line, start with a small project that is not in need of much repair, and make sure you get a great deal on the property.
Second, Establish Your Backend Network
I mentioned in a previous post that having a knowledgeable real estate team is one of the secrets to success. If nothing else, you need to have someone that you can call for advice when a deal starts to go south. Ideally, you start by having a personal relationship with a broker, banker, handyman, and most importantly, another real estate investor.
I want to focus for just a moment on knowing another real estate investor. This one point can make your real estate business. Having another real estate investor in your circle has an enormous value. Not only can you call them for advice, but you build a relationship that can later get you more deals, or give you an opportunity to sell a deal if you are not able to complete it, or if you are cash strapped, you could joint venture with the other real estate investor bridge the gap. All in all, the more people you know and have a good relationship with in the real estate field, the stronger your business is going to be.
Third, Begin with Investments that are Close in Proximity
This point is also very critical. When you start your real estate business, you are probably going to find that there are a lot of small costs that really add up and can kill your deals. We will talk about these in further detail in the coming days. But for now, just understand that if you have to commit additional time and money in traveling to a far away property, you are going to have an unbelievable time making money, and you won’t be establishing yourself in your own market.
Forget about how great a deal in another county may be. Focus on your market, gain experience and property knowledge such as the good locations in town, what the property values are like in those areas, whether people are renting or buying there, and what properties might be for sale there.
I will be continuing this series tomorrow, so check back to RealEstateGeek.net soon!