When I talk to a new real estate investor or someone who wants to be a real estate investor, they tend to be completely overwhelmed by all the resources that are out there. There are dozens and dozens of podcasts, thousands of books, and a lot of people who want to give you advice. It’s not easy to navigate at first.
Then, you start to learn. But sometimes it feels like the more you learn, the more you realize you don’t know!
No wonder so many people never make it past this phase! They get stuck (some call this analysis paralysis) and have no one to help them move forward.
It’s critical that you have a purposeful path to pursue when you are first starting out. I think that learning the true power of real estate and understanding that there are various strategies that you can pursue is a great place to start.
At that point, newbie and wannabe investors need to get really honest about what an ideal future looks like and what goals to make to get there. Take some time to figure out where it is that you are trying to go. Be purposeful and strategic—otherwise, you will just be busy but not productive.
Don’t fall victim to analysis paralysis like most would-be new investors. They’re afraid to take action, they don’t know where to start, and then they quit for one reason or another.
I do not want that to happen to you. So, here are three things that I think you should do as a newbie or wannabe to ensure you’re on the path toward success.
Step 1: Build your contact list.
Every single day you need to be networking and building your contact list. There are so many people who you want on your team.
It’s important that you have a CPA who understands real estate investments. It’s also important that you have access to an attorney who can help you with landlord laws, contract drafting, and protecting yourself and your investments.
You want to make sure that you connect with a banker or conventional lender, hard money lender, private money lender, and maybe even someone who can help you with creative financing. (Yes, this is a thing!) The more money sources you can have, the better.
You’re going to need an insurance agent. You might needâor at least wantâa real estate agent (or more than one) on your team, too.
You could use a wholesaler. You’re going to need contractors, specialists, handymen. You might need a pest control company. You’re going to need a cleaner or cleaning company. You might want a property manager or someone who can teach you how to self-manage.
I also encourage you to have somebody on your team who will hold you accountable. It can be a mentor, or a coach, or a group of friends, or another successful investor. Share your goals with this person (or these people), and ask them to hold you to them. Knowing that someone is checking up on you can provide a great source of motivation!
Network! Network! Network!
The key to having deals constantly and consistently flowing to you is having the right group of people who can provide you with leads and deals. This happens over time as you network and get your name out there as a serious investor. So, be patient, but don’t put it off!
Step 2: Analyze properties.
You need to be analyzing properties every single day. In order to analyze properties, though, you need to nail down a market. Pick one and know exactly why you’re choosing that market.
Just because somebody says it’s hot does not mean that you should pursue it. You need to do your research. Once you’re confident that you’re in the right market, you can start analyzing properties within that market.
You need to know what your return on investment threshold is, so you can find out whether or not you’re looking at a good property. This can be hard in the beginning, because you don’t have the experience. You will likely make a mistake (or a few!).
So, this is where a good mentor, coach, or accountability partner comes in. These people can also serve as another set of eyes and reiterate whether or not you should make an offer.
Step 3: Talk to anyone who will listen.
Tell anyone and everyone what your goals are. Tell them what you’re pursuing; make sure that they know what you’re doing. And if they’re at all interested, make sure that you have their contact information, because you might be able to ask them for money down the road.
Encourage your friends and family to follow your journey. Once they can trust that you know what you are doing and are building a foundation to be successful, they might be a private money source for you. Or they might want to partner on something with you. Or they might know someone who is crushing it in real estate and connect you with that person.
There are a lot of things that real estate investors can be doing to start out, but an intentionally directed path is absolutely critical.
If you read this post and feel that you have yet to complete some or all of these steps, pull out a piece of paper (seriously, right now). Make a list of the team members you’re missing, and get out there and start interviewing and building relationships.
Nail down your market, start analyzing properties, and make offers. And just to add a little more pressure, make sure someone is holding your feet to the fire!