So you want to get started in real estate but you have no experience, huh? I hate to tell you, but you aren’t alone. Almost everyone I know who is invested in real estate, started exactly where you are. Most of them didn’t come from a real estate background or have an “in.” They started exactly where you are today. Which is good news and bad news. It means you can do it and but it also means you have absolutely no excuse for not taking action today! So let me share 5 tips on how to get started in real estate today, with absolutely zero experience.
Tip 1 – Do Your Homework
Maybe you just want to own some rental properties on the side or maybe you want to be a real estate developer or realtor full time. Either way, read about it, listen to podcasts, make a list of educators or influencers you respect and eat, sleep, breathe their content. Take notes. Emulate before you create. There is no reason to reinvent the wheel. Learn from their stories, do what they did. It’s that simple.
Tip 2- Live Below Your Means
This is the most important tip. Hands down. Do not skip over this paragraph. Read and re-read. Whether you want to invest in real estate passively or you want to quit your day job to become a full-time investor, this is the only way in. And this is the hardest part. Repeat after me, “there is no get rich quick scheme.” So stop scouring the internet and start DOING. So many people waste years thinking there’s a secret out there they don’t know about or make excuses as to why it was easier for someone else because they had money to start with. But let me give you the truth. Number 1, there is no scheme. I would know because I was raised in a real estate family and have seen and heard the success and failure stories from countless investors, realtors, contractors, etc. and not one of them has ever made it off of any scheme. Number two, those people “who had money to start with” only did so because at some point they lived below their means or their parents did. So let me tell you the one thing no one wants to hear. Stop comparing your situation to others, stop telling yourself you can’t just because you know someone who’s parents had money and that’s not your situation. Life isn’t fair. Have your moment of silence for the life you wish you were born into, and then get to saving. Cut out the Starbucks. Eat at home. Stop buying stuff on Amazon. It’s the little stuff that adds up. Everyone has a budget, including Bill Gates. So figure out what yours is, and stick to it.
Tip 3- Make a Plan
Fail to plan, plan to fail. If you want to get into real estate make a timeline. Set realistic financial saving goals you can hit so you can make that next step.
Tip 4- Research Financing & Your Market
Obviously everyone’s financial situation is different. You might need hard money lending to get started or you might be able to qualify for construction loans from banks with your primary income. My advice would be to do your research on how financing works and analyze all your financing options before you quit your day job. For Dave and me, our primary income was the way we paid for our flips early on. So before you put in your two weeks notice, have those ducks in a row. Reach out to lenders. There are probably a couple of big names in hard money, construction lines of credit, and traditional bank lenders in your area. Get to know them and know your numbers like the back of your hand. This is the part that will make or break you. Don’t move through this phase quickly. And with that in mind, do your market research. Every market is different. There are markets you can get into real estate for $50,000 but that’s not every market. Know YOUR market. Study it. Find one area that’s up and coming or has great rental opportunity and learn that one market. Don’t try to do more than one at a time. Master one before you start looking else where. Know what it costs to buy. Study what it costs to renovate. There are tons of resources out there on what things should cost. And use a tool like RehabValuator (which has lots of great resources as well) to analyze deals.
Tip 5- Start Doing
Perfection is the enemy of progress. At the end of the day doing is going to teach you more than any website, podcast, ebook, or blogger like me can teach you. Just know that it’s ok to make mistakes. You are certainly going to make them. It’s a part of the process. But take calculated risks. If you put in the time up front to do the steps above, you will minimize your risk. You will always be learning and perfecting your team so its ok if maybe you don’t hire the best painter the first time, learn, and do it differently next time. Shadow people in the industry. Offer to trade something you are skilled at in trade for picking their brain or shadowing them. Reach out. Make connections. You will always be surprised how much the big dogs will be willing to share. But most importantly just start doing!