Proclaiming that you want to invest in real estate is not enough to be successful. There are hundreds of new investors entering the business every day. Unfortunately, most of them will not make it through their first year. This is not because they don’t have the will or desire to succeed. The biggest reason they fail is because they don’t enter with the right mindset. Getting started in any new hobby or career takes a certain level of dedication, in addition to a will to succeed. Telling yourself that you want to be part of the real estate business will not make it so. If you really want to have a long career in real estate, there are a few steps you need to take:
Commit to the business: Investing in real estate is difficult. Despite what you may see on TV or hear from your friends, the business is not as easy as it is portrayed. To get the most out of your new business, you need to be willing to commit to it. This is the case whether you intend to invest as a hobby or view it as a career change. Deals will not just fall on your lap. If you really want to be part of the business, you need to go out and find them. This requires sacrifice on your part. You may need to give up lunch during the week or some time on the weekend, but its worth it. You may need to skip your favorite TV shows or wake up a little earlier. There is really not much that separates two new investors but the will to work hard. In most cases, it is a matter of committing to the business and taking the necessary actions to be successful. Anyone can say they want to be part of the business, but it takes action to make things happen. Before you do anything else, you need to be willing to fully commit to the real estate business.
Education: If you don’t know what you are doing, you won’t enjoy the business. There are many different ways a new investor can go. You don’t need to be an expert on every area, but you should know what you are getting into. As great as the real estate business can be, there are also risks involved. Getting involved in a deal you are not comfortable with can cause you to lose money or buy property that you regret. Fortunately, there are more ways to educate yourself than ever before. In the past, there were only a handful of outdated real estate books available, today there are dozens of ways to learn the business. In addition to a handful of new books every week there are seminars, blogs, websites and even newspaper articles that can accelerate your education. Read as much as you can in as many different areas in the months before you do any investing. Learning the business is an ongoing process and won’t happen overnight. Once you know what is out there, pick a few select areas that you have interest in and want to pursue. Make yourself as comfortable as possible and work from there. Your level of education will give you the confidence you need to hit the ground running.
Get active in your community: A large majority of real estate transactions happen in a local market. Before you get started you should get out in your community and talk to as many people as possible. There are local networking meetings you can attend as well as larger real estate investing clubs. You can pick the brains of people who are actively doing business in your community. You should also talk to realtors, attorneys, mortgage brokers and fellow investors in your area. Not only will this help you plant your investing flag, it will help you learn the business. If you can meet a handful of friendly people, it may give you a few leads to work on right from the start. Getting deals at this point should not be your main goal. You want to figure out the best path for your business and learn as much as you can. You need to be willing to get out there and shake hands, exchange business cards and meet new people. If you set a base of contacts, your transition will be much smoother.
Make a rough plan: The reason you make a rough plan, as opposed to a concrete one is things often change in business. If you are so focused on doing things the way you have planned you may not see the big picture. That being said, you should have some idea of which way your business is headed. Knowing what area of the business you want to focus on and how you will find deals is important when starting out. Write down the location, price range, timeframe and financing options you are have in mind. The more you know, the more likely you will be successful.
Saying you want to be an investor and actually doing it are two different things. Before you look at a single property, you should prepare yourself for success. These steps may not seem important, but they could make all the difference.