When I bought my first property to fix and flip several years ago, a friend of mine congratulated me on starting my new career. And in a way, he was right: this was a huge step. But it was far from the first step.
Actually buying the house was the result of a lot of planning and preparation, training, reading, and learning. And that’s what I want anyone who is considering becoming a real estate investor to understand. Being able to make a living from your real estate business takes more than one investment.
This real estate investment guide has a lot of information you need to get started. You want to make decisions about the kind of business you want to run, your ability to get liquidity, your exit strategies, and so much more.
If you are determined, you’ll get that house. And if you do it right from the start, you’ll look back and understand that the work was worth it.
It Starts With a Plan
If you want things to go right, you must have a plan to follow. To establish a plan, you’ll need to be able to understand everything you can about real estate investing.
Start Gathering Information
Don’t ever make a decision without taking all factors into account. This is especially true when it comes to real estate investing. You wouldn’t want to buy a house before you know what you’re going to do with it. So make sure that you have all the information you need to begin to formulate a business plan.
Determine the Basics of Your Plan
Why are you getting into this? Is it to make money on the side? Is your goal to work for yourself and be your own boss? Is it to fill out your retirement savings? It’s important to understand your goals beyond “I want to make money.” That’s true for everyone. But why do you want this money? How much do you need? Is this going to augment your income or be the whole thing? You can’t earn what you want unless you identify what that is.
Design Your Exit Strategy
When you buy a house, you have a lot of options. Do you fix it up and then turn it around? Do you hold onto it and rent it out to make passive income? Do you want to immediately sell it to another investor as a wholesaler? The time to decide that is before you buy the house. It’s important to know what your exit strategy on every property is before you buy it. This doesn’t mean you have to stick to one thing for your entire career, but you should know your plan for every project.
Plan Your Best Business
So now you have an idea of what you want to do. But what’s the best way to actually do it? There are more decisions to make than you might think.
Solo, Corporate, or Franchise?
There are some people who want to set out entirely on their own, with no help, support, or safety net. There are others who want to work within a set structure and work as a real estate agent. Then there are those who want support and backing, but still want to make their own decisions and go their own way. Those people look for a franchise that gives them the benefits of a well-known name, solid marketing, and a ton of tools but still allows them to be their own boss.
Get Training and Mentorship (From the Right Resources)
You can’t really overestimate the importance of training. This is an incredibly challenging business. You have to know real estate laws, taxes, construction, marketing, and more. You have to be a buyer, a seller, and a general contractor. You have to be a market analyst and a daring closer. That’s why no one does well in this without training and mentorship. If you have a training program as part of your franchise, even better.
Listen to People Who Know What They’re Doing
We talked about getting training, but you have to make sure you’re following the right people and not just listening to those who are out to make a quick buck. The truth is that there are a lot of “gurus” who haven’t worked in years, and online sensations who are just trying to upsell you into buying their system. That doesn’t mean they have nothing useful to offer, it’s just that you are also useful to them. I prefer to talk to people who are active real estate investors and know what’s going on in the current market.
Get Specific But Start With the Basics
Once you’ve done your research and developed an overall plan for your business, then it’ll be time to get down to the nitty-gritty. Ask yourself the following:
How Will I Get Leads?
Leads are the lifeblood of this business. Without leads, you really don’t have anything. That’s why you have to find the best way to get them. That means finding good leads that you don’t have to compete for, that don’t waste your time, that you can potentially close, and that offer a good chance at turning a profit.
How Will I Get Financing?
Having a ready source of cash is another important aspect of real estate investing. When you have a potential deal, you need to be able to get cash fast. But that’s not always easy, especially when you are just getting started. Have your plan for getting liquid before you even start searching. That way, when you have a potential deal, you can get financing.
What Should I Do Next?
Look, we’ve covered this, but it’s important to go over it again. You need to know what you are going to do before you close a deal. If you are fixing it, do you have contractors lined up? Do you know where you are going to get supplies? If you are wholesaling, do you have buyers lined up? Do you know the best way to sell while also complying with all rules and regulations? You need to know where you’re going so that you can get there.
The Best Way to Get Started as a Real Estate Investor
When it comes to starting a career in real estate investing, there’s a lot to collect, a lot to learn, and a lot to figure out. An ideal scenario is a place where that all comes together. That place, for me, is HomeVestors. I learned that when I invested in an independently owned and operated HomeVestors® franchise.
As a franchise owner, I have access to all the tools and resources I need to help my business. I get the support and the marketing and lead generation machine of the We Buy Ugly Houses® national marketing campaign, and I have the freedom to make my own decisions. I get access to all their technology, including a proprietary hard money portal and valuation tool, and I get to decide how to use it.
For newcomers, there is also the unparalleled training and mentorship you need to get started.
Buying a house isn’t the first step. Nor is it the last step. What it is, then, is the beginning of the next chapter, where you go from learning to experience. How well that goes is up to you.
If you’re considering a career in real estate investing, request information about becoming a franchisee today.
Each franchise office is independently owned and operated.