Every new investor has to start somewhere. If you are new to the business and wondering exactly how to get started, the answer is simple – start with a plan. This business plan will be your guide to everything from financing to long term strategy. It will help you make difficult decisions when you are on the fence and wondering what to do. Coming up with a business plan will not happen overnight, but the quicker you start, the sooner you can get headed in the right direction. If you do know where to start, look at some of the deals you are currently working on or may have closed in the past and go from there. At the very least, having a business plan will mitigate risk and allow you to duplicate success. Get your plan of attack in order before you even consider investing.
Excelling at the business side of real estate investing is typically an acquired skill or takes time to develop. Even if you don’t come from a financial background or have experience in management, you should be able to come up with a vision of how you want your business to be run. Start with one aspect of the business and break it down into segments. If you are starting with financing, write down all of your options along with how you can utilize them. Write down the costs, time-frames and potential contacts. Only after you have looked at every avenue for one category, can you move onto the next.
You may start out with one idea in mind and discover a whole new path or a better way to approach this particular business. If you haven’t closed many deals, you haven’t been entrenched in the business long enough and switching gears should be relatively easy. Between financing, networking, marketing, budgeting, lead generation and long term strategy, you will have more than enough areas to focus on.
Listing every item is great, but it won’t do you much good if you aren’t realistic with your goals. Every goal must be accompanied with a time-frame, budget and a path for how you will achieve it. The good news about the investing world taking off is that there are plenty of good books and information available on how to structure deals and run a business. There is nothing wrong with emulating the success of other investors. If something works, there is no reason to try to reinvent the wheel. They are successful for a reason and their blueprint may be the best way for you to go. You can still make your tweaks and changes where you see fit, but if you are looking for a starting point, you can do much better than people who are just successful in your area.
Trying to buy and sell real estate without a plan will lead you into trouble. You may get lucky on a deal or two, but over time you will be left looking for answers and be backed into a making a decision you may regret. If you read as many books as you can and find as much about the business as possible, you will have a good place to start. A plan is just a guide on how you want your business to go. The more experience you gain, the more you will know what to change and how to change it.
