In this episode, I discuss how to know when it’s the right time to get started with your real estate business. In other words, I have said time and time again that you can’t wait until you know everything, but how much knowledge is enough?
I received a question via email today from one of my listeners. The question was interesting, so I thought I would share it here on the podcast. I have not asked this person for permission to share their question, so I will not reveal their name or anything that would identify them. I have not even yet responded to the email, but will definitely do so after recording this.
The listener first mentioned that they have been listening to my podcast for the past few days. I always love hearing from listeners and getting feedback! They referenced the fact that lately, at the end my shows, I have been asking for you to send me emails with your questions, challenges, and roadblocks.
The listener said that the one thing they are unclear about is what steps they should be taking right now as a new and aspiring real estate investor. They have not yet lined up financing, a contractor, an inspector, etc. Their concern is that they would go out and find a deal, make an offer, and get it accepted without having these things in place. That is a very legitimate concern and a great question that I think many would-be investors share.
I am a huge advocate of just starting. That is precisely where I came up with the name for this podcast and the philosophy that I preach. You need to accumulate information and become somewhat knowledgeable about real estate investing before you dive in. But after a period of learning, you must get off the bench and get in the game. I can tell you this: when I got my first property under contract, I did not have a contractor or an inspector lined up. I wasn’t even positive where I was going to get financing, but had an idea that I might go through a traditional lender. In fact, that is exactly what I did– I financed the property through a mortgage company. But I still didn’t have the other pieces to the puzzle.
So here’s what I did, and what I would advise new real estate investors to do:
Before I ever made an offer on a property, I started networking in local real estate investing clubs and created a rapport with local investors who had experience, and, more importantly, had contacts for some of the things that I would need once I got my first property under contract. I got references for:
- Title companies
I didn’t need to find all of these things before getting a property under contract. That is exactly the secret for getting started with your real estate investing business before you have assembled your time. It’s very difficult to line up all of these different individuals before you have ever done any real estate transactions or before you even have a property under contract. The best shortcut you will ever have to this business is to get references for the team members you are going to need from friends in your local market. The best part is that they have most likely already been screened by someone else. You will undoubtedly develop your own relationships with contractors, realtors, inspectors etc. Over time, you will develop your own team. But in the initial stages, my recommendation is to find a good deal, get it under contract, and then immediately tap into your network of local investors who can help you fill in the gaps.
The real key is knowing a good deal from a not-so-good deal. If it’s a good deal, people will be eager to help you. If it’s not, that’s were new investors get in trouble. My advice to new real estate investors would be to educate yourself on how to evaluate and determine whether or not something is a strong deal. If it is, lock it up and leverage your network.
If the listener who emailed me is listening to this right now, I hope this helped you. If you have additional questions or concerns, please feel free to shoot me another email and we can talk.