Investing in real estate is more than flipping houses. It’s the path to creating wealth through purchasing, holding, leasing, managing, and selling Residential and Commercial real property and residential and commercial real estate products. So, what does all that mean?
Real Estate Investing has been happening for a very long time, in fact, since the time of hunter-gatherer societies, in exchange for food and serving as the protective members of a community, families recognized the land as owned by the king and his direct family. Eventually, the ancestors of these peoples would be the historical owners of the land. When the Americas were colonized and settled, the profits from agriculture and taxation on neighboring lands by the founding settlers produced sizeable profits.
Today, real estate investing is one of the most sought after businesses that individuals transition into from their regular jobs and careers, and some might argue it has become overly saturated. Since the dawn of TV shows like Flip This House in 2005 and many more thereafter, the potential profits sparked the interest of your average DIY-er, and flipping homes – the process of buying homes that need repair, making improvements, and selling them for a higher price – became the entry-point to wealth creation for the everyday non-real estate professional.
As flippers became highly seasoned in residential flipping, they entered into the ‘How To’ industry and started teaching others how to invest in real estate. Some of these teachers wrote great books and offered reasonably priced courses based on their tried-and-true experience. But eventually, the real estate investing education industry produced many gurus charging exorbitant fees to learn their unique methods and secrets for profiting in real estate. While there are some great courses out there, and I do recommend working with a mentor as a new real estate investor, you can find everything you need to know about real estate investing on the internet – if you have the time. Because I know time = money, it may benefit a new investor to take a course, but I always recommend to do due diligence first, see what they are offering, read up on their business, and don’t just read the testimonials – check in social media groups for feedback on whether the teacher and the course is legit and worth it for you to put your capital into.
Knowing that much of the information on real estate investing can be found online, it might be a better option to save your capital for you first investment and start by educating yourself. While education in real estate investing is on-going, I recommend you start with Gary Keller’s top three focus areas an Investor should start with: Criteria, Terms, and Network.
Criteria: I ask Investors this all the time, and I’m surprised when all they send me is a price range and how much they want to earn. Investor Criteria includes much more, like Market Statistical Area (MSA), submarkets, property types, construction, size, type of rehab or renovation you do, if you plan to rent or resale.
Terms: You need to know your terms, and this means you need to know how to negotiate. Terms include your maximum acquisition price, maximum cash capital you have to invest, maximum lending terms, and much more. One important aspect of terms is knowing Creative Financing.
Network: If you haven’t heard it yet, make this phrase a mantra in all of your business dealings: “Your Network is Your Net Worth.” It doesn’t get any simpler than that, and if you intend to create wealth through real estate, create real relationships. Your network includes other investors, mentors, service providers, contractors, lenders, clubs and groups, and one of the most important – an Investor-Friendly Reatlor®.
As Gary Keller says, “Criteria identify, Terms determine, and Network supports all the investing you do.”
To find out more about the ins and outs of real estate investing, visit my Blog category, Investing. If you are an Investor and are seeking representation, guidance, and support and would like to create an Real Estate Investing Plan & Strategy, contact me today at 310-383-7393 or [email protected]
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