Success stories have become an integral part of our lives. There are tons of inspirational movies, books and videos that showcase the lives of extraordinary individuals who persistently followed their dream, overcame the challenges and reached the pinnacle of success. My personal favorites include Pursuit of Happiness, The Social Network, and Pirates of Silicon Valley. However, I have never found a good flick for a real estate success story. I am not sure if it’s because film producers find real estate industry a tad boring or if people just aren’t as crazy about real estate as they are about stocks or startups.
I partly blame the misconception surrounding real estate for that. There are tons of self-proclaimed gurus who contribute to the hype in order to exploit people. This blog is for people who are about to jump into real estate in hope of untold riches. We have put together 8 things you need to know before investing in real estate:
Real estate investing is not a get rich quick scheme.
It’s anything but that. You will find plenty of books and courses online using that as a bait. Please do not get baited. You will make mistakes and learn from them. Can you make a lot of money from real estate? Sure. Would it be as easy? Not at all.
You will have to learn the ropes.
To become a successful real estate investor, you need to have thorough understanding of real estate. There are many ways to make money in real estate, the trick is figuring out which one is right for you and then mastering it. Invest in your education so you have a solid foundation as a real estate investor.
You will need a real estate investment plan.
Without a destination, you are lost. As an investor, you need to know which market you are going to invest in, what kind of properties you will buy, and what are your goals. As an investor, it’s important to set SMART goals for yourself and follow through on them. Remember, only the dead fish go with the flow. Don’t be a dead fish.
You have to be analytical rather than emotional.
Investing in real estate is different from buying a house for yourself. You can fall in love with the deal but you can never fall in love with the property. Trust numbers, not emotions. Always be analytical and keep the bigger picture in mind, which is your real estate business plan.
You have to do your due diligence yourself.
The most important thing for any real estate investor is information and its interpretation. Without good information, investing in any property is like playing russian roulette. It’s important that you do your due diligence before making any major decisions. Always double check and triple check everything, whether it’s a property’s operational performance or legal contracts.
You can invest without a lot of money.
Being a real estate investor doesn’t mean you cannot invest without a lot of money. You can. It’s all numbers game and you can source your investment from lenders or other investors. You can partner up with other people. There are even ways for you to invest in real estate without making any down payment of your own.
You can’t do everything yourself.
No matter how good you are, having someone to support you in achieving your goals is invaluable. Building a core team of real estate professionals will help you invest your time where it matters, growing your business. We will cover in detail on which real estate professionals you will need to build a rock-star team and how exactly they will help you make more money later in this series. Stick to what you are good at and delegate the rest.
Once you have goals, you need to take action to accomplish them. It’s time to make the moves which will help you find better investment opportunities, invest in them, improve their operational performance and eventually sell them. You have to take action. You can’t invest in real estate in hopes of getting passive income without having to do anything.
As a real estate investor, you will face many challenges. You will have your own highs and lows but what differentiates a successful investor from the washouts is how they overcome challenges in their pursuit of success. Some quit at the first sign of trouble, others persevere and it’s always the latter who win, no matter which industry they are working in.