You've always wanted to invest in Real Estate but...

It seems like I every time I tell someone that I invest in real estate they respond by saying things like “I always wanted to invest in real estate, but I never knew how to get started” or “I know someone who made a lot of money in real estate, I wish I could do it.” I honestly could not even count the amount of friends, family & colleagues who express interest in real estate investing, but most of them never actually take the steps to get in the game. If you are one of those people, I’m going to tell you of a couple of ways that you can begin to invest in real estate & follow through on that dream.

FIND AN EXPERIENCED PARTNER

Real estate investing is not an easy thing to do, but the benefits and rewards far outweigh the challenges. My first recommendation is to find someone who you know that is an experienced investor. Having an experienced investor to partner (or form a joint venture) with will increase your rate of success, especially in you first few deals. Chances are that you already know someone who has experience & would be willing to help you along the way. If you’re reading this blog post, you already know of 1 experienced investor. I recommend working with an experienced investor in the beginning because they can help you to avoid some of the mistakes that they (or their colleagues) have already learned from.

Real estate investors are always looking for 2 things; DEALS and DOLLARS. If you have the ability to bring either of those things to an investor, you will be a great resource for an investor & someone who they will want to partner with.

FINDING DEALS

When it comes to real estate investing, the best deals are not on the market. The best deals come from people like you who know of a Don’t Wanter (someone who has a property that they just don’t want). If you have a family member, friend, neighbor or co-worker who is looking to get of a property that they don’t want, you have just created value for an investor to partner with you. Here are some examples of “Don’t Wanters”

• Financial Situation changed to the point where they can no longer afford the property
• Relocation because of a job or career change has forced them to sell
• Divorce’s generally require all property to be settled, this usually the sale of a property
• Death/Estate Sales – People often inherit property as part of an estate sale that they are not interested in holding on to. Taxes, Insurance and general up-keep of the property could quickly become overwhelming to the heirs who are hoping for a quick sale.

In all of these situations, you have the opportunity to help someone solve their problem and also bring a deal to a real estate investor. Finding a deal for investor so that you can partner with them and learn the business is a great way to get started.

OPM (OTHER PEOPLE'S MONEY) - DOLLARS

Before we talk about your finances and where your money is currently invested, let’s talk about the people that you know. Do you have the opportunity to use OPM to get you into your first deal? Do you know someone who is looking to invest their money for a significant return? Have you heard a friend colleague complaining that their current investments are producing low returns? Have you heard someone mention that they need more tax write-offs? All of these people could be potential sources for funding the next real estate project. Make the introduction and ask for a percentage of the partnership. Always remember: “A small percentage of any deal is great than zero percent of every deal.”

YOUR DOLLARS

Now, let’s talk a little bit about where your money is currently invested. Is your money truly working for you? Are you receiving returns on your money that make a difference in your life or is your money stagnant?

• Savings Account or Money Market – if your money is with a bank, chances are that your money is not working for you, it’s working for the bank. On the day that I wrote this blog post, Bankrate.com listed the highest available savings account as having an interest rate of 1.05% & the highest Money Market account at 1.10%. ONE PERCENT!!! Did you work really hard to earn your money, just so it can make 1% return for you? And that’s if you luck enough to be in highest earning account. The range starts at 0.05%. I can hear the banker at the place that offers 0.05% now “Mr. Mastroianni, in appreciation for you allowing us to hold your $10,000 for a year and use it to make loans to other people, here is that 5 bucks that we promised you. We really appreciate your banking with us.”
• IRA/401k/Pension – I could write an entire blog post on how you can use your retirement money to invest in real estate (and I will, I promise), but for now, I just want you to know that you may be able to use that money to invest in real estate. I’d be willing to bet that your retirement money could be working a lot harder for you, rather than working really hard for the company that acts as a custodian for that money.
• Stocks & Bonds – Similar to your pension accounts, if you have money invested in the stock market that is not performing the way you hoped real estate is a great investment option for those dollars.
• Home Equity Loans or Lines of Credit – Equity in your property can be a great option to help you free up money that you could invest in real estate. Personally, I like the idea of borrowing money and using it to make money. If the amount you are paying for the money is less than the about you are making than it was worth it.

GET OUT THERE AND DO IT

Partnering with an experienced investor is one of the best ways to learn the business and start to activity participate in the business. Bring your deal leads or bring your dollar leads and you will definitely be on your way to starting in the real estate investment business.

I hope this post triggered some thoughts in your mind of how you can get started.

Wishing you much success on your first deal! Get out there and Do It!