4 Steps to Real Estate Riches
By Seth Joiner
What separates the hobby investor from the professional investor is that same
thing that separates the back yard basketball player and the professional. Fall
down 7 times and get up 8. It is taking the time to learn and understand things
that you’re not sure of. It is practice, hard work and a lot of effort. One
thing is for sure the pay off can be just as sweet.
The first step is education. Just about any challenge or obstacle can be
overcome through education. Lack of money is no longer a problem for those that
understand where they can get it from, regardless of their personal credit or
how much down they are bringing to the table. Lack of time is usually just an
excuse for most people, but if your child was kidnapped you would spend whatever
time it took to get them back, right?
What about failures? If they hold us back from getting up and trying again then
we use them as excuses for our circumstances in life. What would be better is to
use them as a learning experience and try to get as much from our failures as
possible. Once you have failed a few times you will come to understand that it
is just part of the process. There is a secret to failing less…work with a
mentor or coach to help you along your path.
As part of your team you always want to include a mentor or coach (someone that
is further down the path than you are). The other players that we should have on
our teams are (this isn’t by any means a complete list):
- Real
Estate Lawyer
- Real
Estate CPA
- Book
Keeper
- Mortgage
company
- Real
Estate agents
- Property
managers
- Bird dogs
- Plummer
- Handy man
-
Maintenance professionals
- Landscape
professionals
- Hard money
lenders
- Commercial
lenders
- Etc.
Just remember that each of these individual must be investors themselves or
currently work with Real Estate investors. You don’t want a Real Estate agent
showing you around a house pointing out how wonderful the drapes are or pointing
out the great wallpaper the dinning room has. You don’t care about that…you want
to know what the bottom line is, which is, does it have a positive cash flow or
not.
Next you need to understand a few things…what is a good deal and what to stay
away from. This is a very personal thing for each investor. If you are looking
for single-family homes to rehab and sell then your criteria for homes could
potentially be much different from an investor looking for apartment complexes.
The goals or we can say exit strategies are completely different.
So we need to understand what the market is doing. What are the market trends
doing? Are the house prices increasing or decreasing? Are the household incomes
increasing or decreasing in the area that we are looking in? What are the
governments plans for the neighborhood? New streets? Stay status quo or tear it
down and give it to a developer?
Once we understand what the market is doing then we can say with confidence
where we are going to focus our time and what we are going to be looking for. We
then develop step-by-step policies and procedures on how to acquire these
properties from finding the property to making offers and the financing the
deal. Now that the property has been purchased then what is going to happen
after that. What is step 1, step 2 and so forth all the way until we reach our
exit strategy.
Finally now that we have all this in place we need to get out there and make it
happen. Will your knees be knocking your first deal? Absolutely. Will this go
away over time? Maybe. Some people are nervous on every deal, but what you can
bank on is the more that you are prepared the less nervous you will be. Again
you can be the best-prepared person on the planet but until you get in the game
and purchase Real Estate in means nothing. On the other hand if you aren’t
prepared your can rest assured that you will get your education one-way or the
other.