4 Ways for a Cautious Newbie to Take Action
One of the recurring themes for investors is the importance of being ready to jump in and take massive action. But for many newbies, the pressure of feeling like you aren't moving fast enough or not making enough progress can lead to spit-second decisions and mistakes, while spending too much time preparing can lead to analysis paralysis. Here's 4 ways to take action while being cautious and smart about your investments.
I. Learn about the broad range of investment opportunities
Many newbies think they know what they want to do, but there's a wide range of investment options and opportunities that aren't as commonly known as standard rentals and flips are. Bigger Pockets has an amazing collection of books that outline different investment options, and they're ideal for the newbie investor:
Between this, the Bigger Pockets Real Estate Podcast and Blog, you can identify new areas of interest or solidify your desired approach.
II. Create a Strategic Plan
Much of the real estate investing advice out there is geared towards individuals that are looking to transition into real estate full-time at some point. For the typical newbie, that either may not be an option yet, or maybe your intention is to solely leverage real estate for passive income while keeping your 9-to-5. This is why it's important to create a strategic plan that considers your specific profile, phase in life, goals, and objectives. A strategic plan forces you to think through your approach, and lays out an action plan for you to follow. Strategic plans don't have to be long to be impactful - just a page or two can get the job done. Some sections to consider in your strategic plan include:
- Your overall objective for investing
- The specific real estate goals you're working towards, and your target timeline
- Your investment criteria and target locations
- Your purchase plan and return on investment targets
- Your exit strategy
- How you plan on continuously growing your portfolio or earnings
- (Optional) A personal financial statement - many banks require this for investor lending
Thinking through these things will help you assess your plan, identify gaps, and take measurable action towards your goals.
III. Act on your Strategic Plan
After your create a strategic plan, act on it every day. Take deliberate steps toward your goals. Learn all you can about your niche market and what's required for you to get going. Start getting your finances, business accounts, etc. lined up to support your investment infrastructure. Attend webinars, setup consultations, and network with professionals in your field. Don't be afraid to move forward - you have a well thought out plan now, and you can make it happen!
IV. Set Your Business Up for Success!
People often nose-dive into real estate investing while overlooking the importance of setting up a solid foundation for the business. Whether you're setting up a business entity or not, Tax Strategies for the Savvy Real Estate Investor is a must-read prior securing your first investment if you want to protect, maximize, and systematize your investments.
Comments (1)
@Adrienne Wilkins Great article! I loved that you included "Create a Specific Strategic Plan". That is so important on the road to becoming an investor. I have read all of the books you mentioned in this article and I have to say, that anyone who is interested at all in real estate investing should read all of these books. Sounds like you've done a ton of hard work! I hope it all pays off for you soon.
Good luck!
Andy Eakes, over 4 years ago