Getting started in Investing

Real Estate investing can be a profitable goldmine, or a living nightmare, depending on when, why, and how you start your investing. Like anything in life, the first step to success is preparation, and the second step is knowledge. Good execution, timing, and a little bit of luck all help along the way, but after years of working with investors of all levels (and being investors ourselves!) we’ve composed a small list of some of the things we think are key when considering getting into real estate investing.

1.) State of Mind
Possibly one of the most important aspects of investing that has nothing to do with your ultimate profit margins, is your state of mind. You have to take responsibility for your life, your debt, your goals, and your visions. Investors can control their spending, focus, and achieve their goals, and they do this efficiently, day after day. You should be positive and focused if you intend to get into real estate investing – and you should have clear, and well thought out goals. How much do you want to make, and why? Having money in the bank is not enough; you have to have a plan. Money can bring misery, but money and a good plan for investing…that can set you free.

2.) Knowledge is Power
In order to become good at anything, you have to be good at what you do – which means you have to plan, practice, and most of all – educate yourself. Know the ins and outs of your industry, not just everything that can go right but, probably more importantly, everything that can go wrong. Real Estate investing is a difficult industry. The people who succeed are not the people who stumble around and hope for something to go right, it’s the people who have educated themselves, planned, outlined, and implemented their ideas to create a successful business that works for them, often in a short period of time.

3.) If you’re new at the game, parter with aPro.
First-time investors should find a company who can help you locate promising property deals. You’re looking for people who are going to want a long term relationship with you. Why? Because they will be more careful about the deals they recommend to you if they want to retain a good relationship. Partner with people who’ve been in the game, like an experienced real estate investor who can guide you and help you single out properties that will provide you the most bang for your buck. In this economy, an experienced real-estate investor may be willing to work with you in exchange for some of the capital you provide, giving you investment experience first hand.

4.) Start in areas you’re familiar with
That is, in a nutshell, start local (if you can.) Knowing the area personally and being within short-distance of your new investment property can make the difference in additional expenses, like travel, while properties undergo renovations. Additionally, knowing the property values in your area, and having a good understanding of which areas are in high demand, will increase your chances of a high resale price – or, in terms of renting the house, getting a higher monthly payment.

5.) Have a Support Team
Get together a cast of people who can support the various jobs that you’ll need done during renovations – whether its friends who might be interested in helping out to make a few bucks, doing some manual labor, or having a network of contractors and construction crews: a penny saved is a penny earned, so make your relationships count. It should go without saying that this applies in your personal life as well. If you’re a first time investor, stick with positive people who support your vision, and never listen to friends and family members who shoot down your ideas – they’ll come around when you’re successful.