Getting going in the challenging world of an industry like real estate may seem impossible at first. With so many factors, it can be difficult to know where to begin. Real estate is one of the largest and most regulated sectors of the economy.
One of the first things any new investor should do is look at the reasons they’re getting into investing in the first place. Examine yourself, and decide how you came to the conclusion that this was for you. This bedrock reassurance will give you the guidance and support you need when and if things seem a little daunting.
Education – Arguably the first thing that any investor should do is educate themselves. It sounds like one of those things that seem almost too obvious, and at first, the glance is too easy to brush off. But the truth is you need to learn absolutely everything you can about your real estate track.
Little questions you can ask yourself are – what type of investment do I want to be involved in? Do I want to do commercial, residential, a mix of the two?
You may find that you want to take classes, or you may find that you already have a pretty good grip on what you want to do. You got into this business or want to get into this business to preserve wealth, which is why you may need to educate yourself on your retirement assets, “Estimate how many years you may need retirement assets” is the advice given by J. Cook Financial.
2) Location, Location, Location
Location – Is it any surprise that high on the list of real estate investment advice is the location? A comparable home in size, neighborhood quality, building materials and ‘neighborhood feel’ in Baltimore, Maryland costs 2.7 Million, compared to a home by the same designer just 40 miles away by the highway in York, PA at just $225,000.
Money isn’t everything, but a 3% commission, the average according to Redfin.com on 225,000 is a whole heck of a lot different than on 2.7 million.
“You also need to be on the cusp of the up-and-coming neighborhoods. Many cities are “block by block” one block is great, one block is bad. And you need to know where the shift is going to happen” says Charles Standwater, of Trulia.com
Branding is important, it’s one of those things that seems so natural for people, and we do it unconsciously. We all have that nephew who has become the de facto ‘Computer FixIt’ kid for the family. Whether it’s a brand he wanted or not, he’s got it. So your reputation, identity and credibility rest on your financial experience. Don’t be discouraged by past financial issues, a clean slate or perfect life is not necessary when you’re on the investment side. But a good name is key. As such, many starts in residential areas near where they grew up, or in areas that they know best.
4) Be True To Your Word
Be true to your word. If you agree to speak at a local Lion’s Club meeting, but you get wind there will only be three people there, remain calm, firm, and steady. Use it for practice, but don’t bail out. Your word is crucial to your branding.
Too many people have failed in their endeavor early on because they didn’t want to play to a small crowd. Never forget that it only takes one vote, one loud voice, or one poorly fitted horseshoe to ruin a race or a career. Pay attention to the little things, keep your promises, and you’ll find that you’ve not only earned respect but created a persona of the person who can be true to their word.
5) Create a Strong Presentation
You can use opportunities like a small fundraiser or Bridge Club Lunch to practice your rousing presentation. This will help capture your brand. Maybe you find that you fit in more with the golf crowd than with the drinking crowd, this will allow you to not only tailor your presentation but perhaps even your location.
6) Building a network
Building a network is more than just a Facebook page with parts of your dynamite presentation. You absolutely need to focus on finding others who are in similar situations. Not just other investors, flippers, or realtors, but everything from the plumbers to the contractors, to the guy who spreads the most gossip down at the local VFW.
Funding is one of the obvious benefits of your network. If you’ve built a nice brand for yourself, now you need to start rolling up some capital. Early on, most of your investors will be family and friends, but your branding, networking, and becoming a well-respected name about town will help bring in unsolicited money, which usually comes with the least strings attached.
8) Build a strong team
Building a strong team is arguably the most important step in your budding real estate empire. Surrounding yourself with like-minded investors, with well practiced and groomed folks who know the Location Location Location that you want to focus on are key.
Your guys and gals Friday should no doubt include one of the local attorneys (it never hurts if he’s got a specialty in real estate), an accountant for when those numbers get a little too wild and crazy, and obviously a tight network of marketing pros, realtors, and online wizards.
In summation, there lies a great road ahead of all real estate investors, and one of the amazing things about the road is that you get to pave it as you go. So at first, as you gather capital it’s paved with good intentions and the footprints of those who have been there before you. But as time goes on, as you put your funding in place, build a strong team, strengthen your brand and find your niche, that road becomes your pathway to success.
Are you just getting started in real estate investing?