If you’re an entrepreneur just getting started in real estate investing, the reality is that you’ve got some lessons to learn. The good news is the best way to learn is by doing. I learned so many valuable lessons each time I stepped out and acted upon my plans. At the same time, I also utilized a real estate investing pro to mentor me, because I wanted to sidestep some mistakes and simply have that expertise guidance.
Whether you’re a new investor, or you’ve been investing for some time, here are 5 essential tips that will help you make better investments, and ultimately, more money.
1. Stick it out
Listen, real estate markets can become volatile. Sometimes it’s crazy hot, and other times it’s crazy frigid. For the periods of time when it’s lagging, commit to sticking it out. Trust that your investment is solid no matter what the market is doing. Trust that your decision to BE an investor is one of the wisest decisions you’ve ever made. Whether you’re interested in short or long-term investments, stay the course. Remain disciplined.
2. Don’t wait for the perfect deal
It’s normal to have a bit of anxiety surrounding your investments, especially if you’re new, but if you allow that anxiety to keep you sitting the bench, you’ll never get in the game. Now, there are some pretty amazing deals out there, but rarely are they “perfect”. If you’re waiting for the perfect deal, or if you keep waiting for a better deal, you may never reach your investing goals or potential. Look for those deals that meet most of your criteria list, and move forward with those.
3. Be thorough with financial analysis
Financial analysis is important. You don’t want to skimp on it. Take the time to find out the correct numbers when it comes to the home’s taxes and maintenance. Do the calculations for net income, cash flow, and total ROI.
4. Steer clear of sellers who are not motivated to sell
They’re out there. The sellers who aren’t motivated to let their property go. How long has the property been on the market? If it’s been a year or more, and they’ve not budged much in price, they’re not motivated to sell. Go on to find those sellers that are motivated to sell. How?
- Check the classifieds
- Tell everyone you know you’re looking
- Utilize social media
- Go to open houses
- Go seeking vacant properties
5. Stick with your preferred type of real estate investment
As you know, there are various niches of real estate you can invest in. Choose a niche and primarily stick with that niche. Just to name a few, there are residential investments, retail, industrial, REITs, flipping, wholesaling, and more. Do your research and narrow your focus down to one. Does that mean you only ever invest in that niche? No, but as a beginner, sticking to one niche is a great start.
If you don’t know any pro investors, it’s time to make some connections. Even if you don’t meet the person face-to-face, make the connection virtually. Or attend some community events where property investors would go. Reach out online to the pros via professional sites like LinkedIn or niche groups. Get yourself an investment mentor.
You’ve got to make the effort. Sure, you will do most of the work on your own, but having a mentor or “pro posse” will help you learn what you need to know faster and probably avoid some mistakes along your investing journey.