Do You Have What it Takes?
A lot of people ask me what it takes to get started in real estate investing. While there are a myriad of ways to make money in real estate, normally these folks are referring to either flipping properties or buying and holding a rental. I thought a lot about these two topics and realized that I should talk about the very basics of getting started.
Generally, there are three things that every investor needs to get started and have a fighting chance. A solid network of people to build their team, a foundation of knowledge & training, and money. While our main focus with investors is money, we’ll get into more of that later.
Your network is your net worth
You probably have heard this phrase at least a dozen times or so if you have been around the right people investing in real estate. If not, write it down and remember it. In real estate investing, it is not only what you know but who you know. Say you come across a sweetheart deal, do you have a private lender that can get you the financing needed? Do you have an agent than can structure the deal and handle the paperwork required? How about the repairs? Do you have a few contractors lined up that you can count on to do the work required, in the timeline necessary to keep your profits up?
I hear all the time that an investor has a contractor lined up. What about their backup, and their backup’s backup, etc? A strong network will help you get your team together and will be invaluable to your business.
How do you build your network? To start, get out there and go to as many REIA groups in your area as possible. Here in S.E. Wisconsin there are at least 7 groups within a 60-mile radius. Search Facebook for REIA meetings and other real estate investment groups and join them. Check out meetup.com for local area meetings as well. When you are at these meetings, talk about what you want to do with everyone. You will find lenders, agents, contractors, title companies and others all very willing to talk to you.
“An investment in knowledge pays the best interest.” -B. Franklin
Wise words from Mr. Franklin. Education is the most important part of becoming a successful real estate investor, even more important than money. Finding money for a good deal is easy once you have learned how. But knowing what and how to do it is key to your success. Real estate is only concerned with what you know and how hard you work. You have to know a good deal when you see it, how to find that deal, fund it, rehab it and either sell it or manage it for a profit.
There are literally hundreds of books on this subject. There are coaches, videos online, websites, webinars, meetings, seminars and local “experts” all willing to share their knowledge. These are very easy to find. What is harder to find are the good ones. A great place to start are the investor networking websites www.biggerpockets.com and www.connectedinvestors.com as well as your local networking groups.
Money, Cake, Dead Presidents, Cheddar, Greenbacks, Scratch
Ah $. While it doesn’t matter what you call it, you need money to invest in real estate. A great part about this is it doesn’t have to be your own money, at least not the majority of it! There are ways to invest in real estate with little or no money out of pocket but you will need to use your network and your newly found education to do that.
If you have some money in savings you could use a private money lender such as us, Geneva Lakes Funding, to help you acquire your first project. Or might need a partner with money or family member willing to help for your down payment. If you need access to money, be sure to make that a focus of your networking activities – there are usually quite a few lenders at the networking groups and online. Be careful, there is a lot of noise out there and quite a few scammers. Make sure you develop a relationship with your money people to protect yourself and your business.
While real estate investing is not easy, taking the time to set yourself up correctly will ensure you hit the ground running, prepared and ready for success.
Geneva Lakes Funding is a private money lender in SE Wisconsin. We want to be your partner and help you finance your projects. Send us your deals, we’ll have a look and give you options. We’ll even let you know if the deal is worthwhile or not. Give us a call: (262) 222-6400 or email us at; firstname.lastname@example.org