So, I’ve been in real estate investing for almost a decade. I made it through the crash in 2008 and have seen it all. So as you could imagine, I get asked all the time, knowing what you know now, what I would do if I had to start all over tomorrow?
Well, here goes.
1. I’d assess my cashflow:
The first thing you do when starting off in real estate investing is take stock of how much cash you have. Are you sitting on a fat bank account that allows you and your family to survive while you learn how to do this?
- What will your personal and business expenses be over the next 6 months?
- What’s your cost of living going to be?
- Are you like 31 and living with your ex girlfriend for free in her apartment?
- Do you have money to support yourself and your family? You’ll need it.
- Do you have money to get going in this business? Even better.
- If you don’t have cash, you’ll need access to it. You can’t throw your family on the altar to pursue this. So do what you have to do to set aside 6 months of living expenses in advance, so you can focus on your business and not worry about paying the bills.
2. I’d make sure I have time:
So…if you don’t have cash to invest in this business, it’s okay. That’s actually good to know. That’s where you start. Do you have time on your hands? Because this takes TIME. You need to learn and put in long hours. Your family and bills come first after all and you CAN do this without using any of your own money initially, but you do need time.
Stay up nights, work on weekends, and get up early in the mornings. I’m being brutally honest here- you need to find time or find money. Or both. You’re gonna have to save. You need money to pay your bills while you do this. Credit, cash, borrow, get on a #DaveRamsey plan and save as much as you can because this TAKES CASH.
If you don’t have good credit, then get it fixed. The better your credit in this industry, the more you can do and the more cash you can access in the future.
I cannot stress this enough…
…when you’re starting out in real estate investing in 2016, you’re working for yourself and cannot be successful if you’re worried about paying the bills or choosing between groceries and sending out mailers.
3. I’d mentally prepare because real estate investing is tough:
Tough? Yep. But it IS doable. Most of you probably have a job, have a bit of money and you can do this nights and weekends until it takes off and you start doing it full-time.
4. I’d immediately start marketing to find motivated sellers:
The easiest way to get started in real estate investing is in wholesaling (I wrote a massive guide on it here). It’s how I got started, how most guys get started, and how you can make good money without using any of your own money. You just need to hustle.
You need to find motivated sellers, buy their property for a low price, find buyers or investors, and sell it to them for a higher price. It’s quick, easy cash but make sure you know what you’re doing or you could lose a lot.
So, you start in wholesaling, then move into Fix N Flips.
There are some great strategies out there – like my online course…where I teach you EVERYTHING YOU EVER NEED TO KNOW about how to make a living and a life for yourself as a house flipper, using other people’s money and credit.
When you take my course and learn from the over 11 hours of video training, you’ll be able to take my concepts and make A LOT of cash.
5. I’d choose my team wisely:
You’re going to need the right people around you to succeed. This isn’t a solo endeavor. And it starts with your realtor and contractor(s). For instance, here’s a story about having the wrong person on your team.
Recently, a new realtor picks me up at my office (thought I’d give the guy a chance to show me he can do what I need him to do), drives me around, and shows me some lots. But when I tell him, “Here’s my business model: I have to be at 70% or less in each deal (ARV)”.
ARV you say? Yep. Watch this:
And you know what he says to me?
He says, “I don’t know how you can do this, it’s really hard to find these kind of deals,.” This is not the right guy. When you choose the Realtors who are going to be on your team, they HAVE TO get your business model or they’ll bankrupt you. You need contractors who get your model too. You don’t want big spenders, you want contractors who know how to move quickly and stay within the budget YOU give THEM.
6. I’d Never Compromise My Plan:
So back to this Realtor guy. He told me to my face that it’s “hard” so he doesn’t really want to help me. He told me to spend more. But I don’t make a living if I spend more. I make a living when I am in the deal at no more than 70% of the ARV.
I’ve had clowns tell me that so many times that getting deals at 70% or less of the ARV is impossible, but I flipped over 40 houses last year that way! You know how? Volume. I reverse engineered it. I send out multiple offers, lowball people, and you know what? People ALWAYS BITE.
So go into this knowing you’ll close 10% of offers you make, give or take. The key to being successful is volume. Find deals, make offers on all of them, and never quit.
7. I’d Leverage More People More Often
You need to leverage O.P.E. It stands for other people’s everything. Not just their money, but their time, their talent, and their relationships. Your one goal is to get a successful business under your belt, and you do that by networking and leveraging your relationships to find more money, more deals, more investors, and more cash.
You need to connect the dots.
And when you learn how…
…you’ll be a successful real estate investor in no time.