Real estate investing might seem like an elite endeavor that only the smartest and most resourceful people are able to enter. However, the exact opposite is closer to the truth.
It’s actually one of the most accessible wealth-building vehicles around. Regardless of how much money you have, what your background is, or where you’re located, anyone can become a real estate investor and generate a positive ROI.
If you’re serious about getting into this business, you can take certain steps that will flatten your learning curve.
Don’t Reinvent the Wheel
It’s easy to outsmart yourself when you start into real estate investing. Many of us believe that in order to be successful, we have to blaze our own path or attempt some innovative strategy.
Though there’s nothing inherently wrong with being innovative, in fact you don’t have to reinvent the real estate investment wheel. The formula is already out there.
Watch what others do and study what successful real estate investors did when they were in your shoes. What follows are some key concepts you can use to go from newbie to expert at an accelerated rate.
Make use of dead time.
In the world of productivity, experts refer to wasted time during the day as “dead time.” This includes small increments like the commute to work or the 30 minutes we spend scrolling through our phones during lunch break.
For the average person, these little wasted windows of time may amount to as much as four hours per day … which equals 28 hours a week, 120 hours a month, and 1,460 hours per year!
“Most of us let this time slip through our fingers, preferring to skim through our phones or read the latest news,” Memory.ai explains. “But if you can master the art of utilizing dead time, you’ll be surprised at the difference it can make.”
What does this have to do with becoming a successful real estate investor? A lot, actually. If you can become proficient at identifying and reclaiming this dead time, you have the potential to invest another 100-plus hours in education every month.
That might consist of taking online courses, obtaining your real estate license, listening to podcasts, watching YouTube videos, and anything else that expands your knowledge and understanding of the industry.
Read these top books.
Even in the world of YouTube, podcasts, and blog posts, there’s still a lot of value in sitting down and reading. A number of powerful real estate investing books on the shelves can show you how to be successful in this industry. You’ll also find a lot of general wealth-building books can be helpful.
According to Michigan-based rental property investor Connor Anderson, here are some of the top reads: The Richest Man in Babylon, Rich Dad Poor Dad, Building Wealth One House at a Time, Set for Life, How to Invest in Real Estate, Recession-Proof Real Estate Investing, The Book on Investing in Real Estate With No (And Low) Money Down, Every Landlord’s Legal Guide, and The 4-Hour Workweek.
Find a mentor.
If you’ve never had a professional mentor, then you might be a little skeptical about the idea. (Why waste time listening to someone else talk when you can just go out and take action?)
The true value of a mentor lies in his or her wisdom and path. At one point, this person was like you: new to the industry and unsure about what to do. But over the past five, 10, or even 25-plus years, this individual learned what it takes to be successful.
Such an expert can save you a lot of heartbreak and help you avoid making mistakes. Not only that, but he or she can help you focus on the right things.
Mentorship relationships don’t have to be formal. (In other words, you don’t have to go to a local meetup and announce you’re looking for a mentor; it rarely works like that.)
The best mentoring relationships are formed naturally. You meet someone who is in the field and you take the person out for coffee. Then you grab lunch together three weeks later.
Before very long, you have the kind of relationship where you can call that person up and ask questions. Over time, things progress and he or she starts to take you under a wing.
Find as many mentors as you can. Some of these relationships will be short-lived – they’ll come and then go as both of you phase in and out of different activities and circles – while others could be long lasting. Never turn down an opportunity to learn from someone who’s more experienced.
Start by house hacking.
In the arena of real estate investing, the term “house hacking” refers to the practice of purchasing a multi-family property, living in one unit as your personal residence, and renting out the other(s). The goal is to have the rent from your tenants cover the entire mortgage (plus some), which means you carry no housing expenses.
You can take the surplus to invest in additional properties. And when you move out, you add the unit you were living in to your total rentals.
House hacking isn’t for everyone – especially people who have families with young kids. But if you’re young and single (or even married without children), it’s a great way to move ahead with investing.
Reinvest in the business.
When you experience the initial euphoria of receiving monthly checks deposited in your bank account, it’s tempting to expand your own lifestyle. But that’s the worst move you can make as a young investor. (There will come a time when you can do this, but that is not now.)
The best thing you can do at this point is to plow all your net profits back into the business. This creates a snowball effect in which the revenue from one unit enables you to invest in another (and so on). Do this for several years and you’ll be amazed by the results.
Green Residential Professional Property Management
Are you looking for a property manager to streamline your real estate investing business and remove some of the pressure of managing your portfolio on your own? At Green Residential, we offer comprehensive property management services to investors and landlords in Houston, Austin, and a number of other markets around the state of Texas.
For more information on how we can help you augment your business, please contact us today!