Getting Started in Real Estate
Real estate investing offers numerous advantages that are attractive to beginning investors. For those desiring to exit the rat race and increase their passive income, real estate investing can provide the cash flow necessary to accomplish this goal. The techniques and principles behind successful real estate investing are straight forward and allow an individual to get started fairly quickly once the proper educational foundation is in place. At that point, the process of evaluating properties and making offers starts leading up to the much anticipated first deal of the new real estate investor.
Before that first offer is made and first deal finalized, the prospective real estate investor should set the proper foundation. This foundation is based on the knowledge of strategies needed for deals, the techniques necessary for those deals, and the people that will help make that first deal come to fruition.
Real Estate Strategies
As you venture out to find that first deal, it will be of tremendous aid to have knowledge of many different real estate strategies. While the general marketplace conditions for your area may dictate which strategy works best at any given time, there is no way of knowing precisely which strategy is going to work best for any given deal ahead of time. Having knowledge of multiple strategies increases your chances of successfully finding your first deal.
Knowledge of wholesaling, lease options, and rehab and can allow you analyze and execute a deal where without the knowledge in one of these areas, the deal wouldn’t make sense. Knowledge of properties in probate, tax liens, discount notes, and short sales can open up entirely new ways of finding profitable deals. Property management and commercial real estate can help provide some of the long-term passive income you are looking for.
For the beginning real estate investor, it is wise to start with knowledge of a few strategies and build on these strategies as you get started. You may find that your personality and market conditions drive you to a single strategy that works for you. Don’t try and learn everything before you make your first offer; rather, add knowledge as you go.
Rich Dad Education offers live and online classes in all of the areas mentioned above. This newsletter will offer articles in coming months in many of these areas which can serve as a good place to investigate new strategies or refresh your knowledge of the strategies you learn in your real estate courses.
Real Estate Techniques
There are many fundamental real estate techniques that are used in multiple strategies. These techniques will become second nature to you over time, but sometimes intimidate the new real estate investor. Don’t let this be the case for you. Make it a top priority to understand how these techniques work and to implement them in your deals.
While you will learn numerous techniques depending on the specialized field you enter, two fundamental techniques to start with are how to appraise properties and learning how to calculate what goes into the offer you make on a property. Both of these will be the focus on articles in this summer’s newsletter and are taught in many of the courses that Rich Dad Education offers.
No one can help teach you the patience needed or the tenacity required to make the amount of offers necessary before one is accepted. There are numerous marketing techniques that you will learn over time that increase your chances of speeding up this process, increasing the chances of the offers to come to you. Regardless of whether you find the offer or they come to you, learning how to properly analyze properties and how to calculate your offers are two necessary areas to master before you start out on your real estate investing journey.
Power Team
Real estate investing is a people business – it requires a large amount of connections and relationships to maximize your success. The most successful real estate investors have a large network of individuals they network with that allow them access to deals they might not have otherwise found.
For the beginning real estate investor, the building blocks of this network is the Power Team that you put together. Your larger investing network will develop over time, but your Power Team can help create the foundation of this network and give you the resources necessary to finalize your first deal. Without this Power Team you are truly limiting your potential. Undoubtedly there is a large amount of work you can do yourself, but over time a do-it-yourself-attitude limits the growth of your business.
Putting together this Power Team cannot be accomplished overnight, but not having it completely in place should not prevent you from making offers and putting the strategies and techniques you have learned into place. It should, however, be something that you spend time on in the early stages and be a priority as your real estate business starts out.
A good Power Team includes but is not limited to:
• Title company
• Escrow company
• Realtor
• Contractor
• Appraiser
• Insurance broker
• Private lender or hard-money lender
• Mortgage broker
• Property manager
• CPA
• Attorney
Each of these members plays a pivotal role in your success as a real estate investor. Finding the right individual in even one area can increase your chances of success dramatically. Finding good people and companies that fit each of these roles can elevate you to levels of success that you might not have imagined possible. Don’t do things the hard way – spend time to develop these relationships and that time will be rewarded greatly in the years that follow.
While mentioned earlier, a final piece of advice is worth repeating. Whether it is learning different strategies, techniques, or putting together your Power Team, don’t get hung up on trying to learn or put together everything before you start acting. The process of learning should only be a starting point that eventually supplements real life experience. Experience will always be the best teacher.