So you’ve decided you want to be a real estate investor — now what!?! The dynamic and fast-paced world of real estate investing can be daunting for any first-time investor. Follow this step-by-step guide to get your bearings and successfully launch your career in real estate investing.
#1 Define Your Goals
Many would describe the world of real estate investing as “limitless.” Despite the nearly endless potential for success, defining your goals is an important step. Determine what YOU want from your career as a real estate investor. Do you want to supplement your current full-time job and save for retirement? Do you want to eventually have monthly cash flow so you can quit your full-time job? By understanding your goals, you will be able to determine the direction of your real estate investing career.
#2 Find Your Niche and Investment Style
After you define your goals, it’s time to pick the investment style that will best help you achieve them. The common ways to invest are:
- Buy and Hold: When an investor purchases a rental property, typically with a traditional 30-year mortgage, and uses the proceeds from tenant rent to pay the mortgage and create equity.
- Fix and Flip: A short-term investment strategy where an investor purchases a property in need of repairs, completes the repairs and then sells the property for a profit. Because the property is in poor condition, a fix and flip deal is primarily a cash deal.
- Wholesaling: An excellent strategy for a beginner investor, wholesaling is finding real estate deals and then selling the deals to investors who have capital on hand. They then take a commission.
If you don’t have a ton of capital on hand, a fix and flip might not be for you. Research all the investment styles and choose the one that makes the most sense for your goals and budget.
#3 Invest in Your Knowledge
Once you have defined your goals, secured your capital, and determined your investment style, the next step is to determine the best way to achieve your goals. While the Internet is an excellent resource, having the support of a mentor or teacher is invaluable. As a real estate investor, you will need to learn the tools to support your goals. You will need systems to hire the right people, as well as resources to find your ideal investment properties. Finding a teacher or mentor will help you avoid time-consuming and potentially costly mistakes.
Getting Started in Real Estate Investing
If you take your time and define your goals, you can embark on a successful career in real estate investing! Don’t bite off more than you can chew. Take your time and you will reap the rewards.