When Joy and Dan decided to change careers and become real estate investors, they also decided to move across the country and make a fresh start all around. It was a bold move, especially since they’d lived and worked in the same town for almost two decades. But, they wanted to build their real estate investment business where there were more opportunities to grow their portfolio. And, in truth, that’s just how they do things. As the saying goes, they either go big or go home.
Being that they were moving closer to where I invest, I suggested we get together when they got into town. I love sitting and chatting with new investors and doing whatever I can to help them get started on the right foot. The steps to becoming a real estate investor are simple, but they’re not necessarily easy. So, I like to give people a leg up—especially folks with a passion for real estate and a drive to succeed, like Joy and Dan.
Becoming a Real Estate Investor in Six Simple Steps
The decision to become an investor can feel overwhelming, regardless of the career skills you bring to the table. Shifting careers midway through life can be daunting, especially when you move from a predictable corporate job with a steady income to a profession, like real estate investing, that offers no guarantees. But, if you’ve got an entrepreneurial spirit, a willingness to work hard, and a love for the industry, you’ll find the drive to overcome any obstacles that arise.
Of course, there are steps that you can take to make starting a career in real estate investing a lot easier and even a little less risky. And, they’re pretty simple when you get right down to it. This is what I told Joy and Dan about how to put your best foot forward and keep it going in the right direction:
1. Study with instructors who invest.
It’s imperative that you receive comprehensive training as a real estate investor from teachers who successfully invest themselves and who are adept at imparting their knowledge to others. It’s tempting to take the quick and easy way out of learning by reading how-to books written by self-proclaimed gurus, taking online real estate investing courses, or attending weekend workshops and seminars. It’s not that these things shouldn’t have a place in your educational repertoire. But, to rely on them—even collectively—as your sole source of instruction puts you at a serious disadvantage.
The last thing you want to do is absorb inaccurate or incomplete material that could cause you to make career-ending mistakes, like buying a money pit. You can’t learn all there is to know about evaluating a property, negotiating a deal, or performing renovations from a book, video, or short seminar. And, very often, there is no way to tell if the individual disseminating the information is legitimate or legitimately successful. That’s why you’ll need an all-inclusive training program that puts you face-to-face with experienced investors who care about your success—and then study like your career depends on it.
2. Strategize your investing goals.
Before you start buying up investment property, it’s critical to formulate a real estate investment strategy to keep your goals on track and to better manage your resources. Otherwise, you could easily get caught up in investing willy-nilly and find yourself saddled with unwanted landlord responsibilities instead of buying homes to rehab and resell as you’d always imagined. While you don’t necessarily have to create a formal business plan, giving your short-term and long-term investing goals serious consideration, and strategizing how to accomplish them in a way that aligns with your preferred niche, will fuel your passion for the work.
You’ll need that fuel when the market shifts or a deal goes awry. Take it from me, the worst has happened even to the best of us at least once. When I first started investing, I was so eager to build my portfolio that I got in over my head with a major fixer that I couldn’t sell for months when I got it back on the market. The market tides had turned and my timing was simply off. To get it off of my books and out of my hands, I had to sell the house at much less than my anticipated returns. These problems are much easier to weather, however, when you know you’re on the right overall track and you’ve strategized how to stay there.
3. Network with seasoned investors.
Networking with your fellow investors can help to increase your confidence and competence in several ways, so you should prioritize it. Whether you need guidance on selecting the right property insurance for flipping houses or feedback on using social media to generate real estate leads, a network of other investors who have been there, done that can keep you focused. You might even be able to find a mentor through your network if your initial training didn’t provide or recommend one.
Unfortunately, building a network that you can trust can take time and patience—even if you’ve got some help. Joining local real estate investment clubs and associations, for example, may put you in touch with quite a few industry professionals. But, because it’s mostly new investors who attend the meetings, their scope of expertise will likely be as limited as yours. So, you might have to join a lot of clubs and attend several meetings just for the chance to connect with one or two experienced investors you can count on. Still, the sooner you get started building your network—whether through club events, word-of-mouth, or some other method—the better off you’ll be.
4. Implement investing tools and resources.
You will need to implement a variety of investment-related tools and resources from day one to make building your real estate investment business easier and more successful. Your arsenal should include everything from a lead generation strategy that helps you find fixer-upper homes for sale to a real estate analysis and valuation method that quickly estimates returns when you do. A plug-and-play software system, like HomeVestors®’ proprietary platform, MAPS, that assists you with organizing contacts, converting leads into clients, and managing your deals isn’t a bad idea to get a hold of either.
In addition to real estate industry tools, you’ll need access to resources that you can draw upon to help you set up shop. Even the name of your real estate investing business and the marketing campaign you create to build brand awareness around it are crucial elements to getting—and keeping—your business up-and-running smoothly. And, where possible, most of these resources should be researched, tested, and implemented before you open your doors to ensure you don’t hit any snags that trip you up or slow you down before you even get started.
5. Open shop and get ready to invest.
Before you know it, it’ll be time to open your doors and start investing in property—and that can be intimidating. But, with the right training, network, and tools behind you, your initial investment can produce decent returns and build upon your expertise. Once you’ve found a potential deal, evaluated the cost for renovations, and estimated your returns, you’ve got to make an offer—assuming the numbers add up to a return on investment that makes sense. And, when you get an acceptance—because you eventually will—it’s time to make good on your offer. If you stay within budget on your rehab and sell or rent at the right time, you’ll also have a good chance of maximizing your ROI—and getting your new career started on the right foot.
It is exciting to finally put your skills and strategy into action and get on the road to realizing your career goals. Of course, making a good business out of flipping houses, purchasing single-family homes to use as rentals, or a combination of both, requires that you repeat the process over and over, perhaps taking on bigger projects each time. As you go along, however, the process will get easier and, even though you will still have to work hard, it’ll become more rewarding too.
There is a simple and fairly direct path to becoming a real estate investor—one that culminates in you taking the leap and buying your first property. But, you will have to put in the time and effort to research your options along the way and see each step through. After all, you don’t want to end up studying with a charlatan or spending your hard-earned cash for second-rate real estate investing tools. You certainly don’t want to skip a step and fail before you’ve really begun. And, though some stages, like building your network, can take longer than others, their value can’t be overstated and, therefore, they should not be overlooked.
If it sounds like getting started on the right investing foot could take an awfully long time, you’re right. That is, of course, unless you can find a faster way to becoming a skilled investor.
A Simpler and Easier Way to Take the Leap
Like Joy and Dan, I had a strong passion for real estate even before I began investing. And, by the time I bought my first property, I was well-prepared to work hard at being all-in. It didn’t take me that long to get to that point, either, because I’d found a simpler and easier way to turn pro. I became an independently owned and operated HomeVestors® franchisee.
When I became a HomeVestors® franchisee, the steps I needed to take to successfully invest in real estate were not only clearly defined, they were made easier to climb. I received comprehensive week-long initial training by seasoned staff and continued mentoring by an experienced Development Agent who helped me define my goals and organize an investment strategy. I also got access to some of the best real estate investing tools available, like ValueChek®, HomeVestors’ proprietary valuation software. And, its nationally-known “We Buy Ugly Houses®” brand made my business top-of-mind for distressed homeowners who need to sell. So, when I was ready to open my doors, I was positioned to succeed.
Leap into real estate investing already having a leg up. Contact HomeVestors to ask what it takes to become an independently owned and operated HomeVestors® franchisee.