Being an active and experienced real estate investor I always get investors asking how to get started in investing. No one really knows what that first step is. First thing you want to do is you want to create a plan. I can say this because I started with no plan and I was on a quick road to disaster and failure. The only reason I was able to avoid it was that I had a high paying job as an airline pilot and a partner to talk things through with when it was all hitting the fan.
You want to make sure that you not only have a plan, but its written down and documented from beginning to end or the best you can. It’s not to say that you may not change it as time goes on, but you want to make sure that whatever that plan is you’re going to stick with it. Be very focused with your plan. I cannot tell you how many times I have had coffee with a new investor or talked on the phone and they tell me they are going to do “EVERYTHING” in real estate(Flips, Wholesale, Tax liens, Rehabbing, Buy and hold). As you can imagine they end up not doing anything good, and they will either very quickly realize that plan will not work or they will crash and burn. Pick a path and stick to it, do not bounce around thinking you will master all of them because in reality you will master none, stay laser focused.
The next thing you want to do is in that plan you want to make sure that you are going to be complying with all government local agency laws. These laws include Texas Real Estate Commission, IRS laws, Fair Housing Laws, Discrimination Laws, and Fair Credit Reporting Act Laws. There’s just a lot of things you want to make sure that you know what you can and cannot say, can and cannot do. Real estate investors are among the highest sued in the industry.
My recommendation is you want to surround yourself with a very good team, meaning real estate agents that know what they are doing and can help you find the deals. Establish relationships with both contractors and inspectors. Let them know you want a long term relationship with them to make sure they realize you are serious and you are going to do what you say. Last thing a contractor wants is somebody picking their brain all the time and never does business with them. Create and establish all the roles that you are going need filled per your business plan and then spend time finding the right people for your team. Maybe say I will try to find three Real Estate Agents and then maybe you may find one that you really like and you should do a lot of business with, same thing with contractors. Just get a good team on your side. Best thing you could do is leverage other people. You only have so many hours in a day and if you have a team of five people obviously you can do a lot more then trying to do it all yourself.
As an investor your best bet is focusing on finding deals and making that decision financially whether or not it’s a good deal or bad. Have the agent find rental comps for you and that’s how you will know if it’s going to make money for you or not. Have the inspector go out and tell you if you need a new roof, or have a contractor tell you how much the make ready bid will cost. Plug that into your numbers as a true investor and that will tell you whether or not it is or it’s not a good deal. That is true leverage. The best thing you could do to ensure your success is get a team, create a business plan, and sit down to talk to people.
What kind of people do you want on your team, what constitutes a good team member. Those are the kinds of things you should first be asking yourself.
