In this episode, I want to share with you the top three lessons I learned in my first year as a real estate investor.
As always, the goal here is to get you off the starting block and to really get you going in real estate. It’s a blast and a blessing to be able to reach so many people and help you in your goals, so if there’s anything I can do to be more helpful, get in touch with me at email@example.com.
My first year in real estate was 2008, which was a pretty horrible time for real estate, but, ironically, a very good time for new real estate investors. Houses weren’t selling for as much, so if you had a house since 2007 and had to sell it in 2008, you were in trouble. However, if you were starting in 2008 like I did, it was easier to get in the game.
Here are the first three lessons that I learned as a real estate investor:
- Paperwork is important. All paperwork. It feels like it’s slowing things down, but it must always be incredibly clear. You need to sign contracts so that everyone knows exactly what they’re supposed to do and how much they’re supposed to make. An important piece of paperwork that I realized I needed was a release of lien, which basically tells your contractor that the business is done and they have been payed. If you don’t sign that and they don’t sign that, you could have contractors or subcontractors come back and claim they were never paid. This is not a hypothetical–it actually happened to me. Also, if you’re working with a private investor, make sure that there is documentation explaining exactly how much you were given and how and when you are supposed to give it back. All this paperwork can sound intimidating and tedious, but it is necessary so that everyone’s interests are covered.
- Hire the most qualified person for the job. My lesson revolved around contractors, but it applies to everyone you work with, from realtors to insurance companies. You need to work with the best person for the job, not a family member or friend or acquaintance you want to help out. Your contractor specifically needs to be the person who is giving you the best price for the highest quality and can do it the quickest. You’re hiring someone as a business owner; it’s not the time to be charitable to friends and family.
- Momentum is key to success. Massive action is good, but tough to sustain. In real estate, massive action gets the humongous ball rolling. Once it gets rolling and you start getting results, you can’t stop. You need to continue to take action. It’s like trying to push a car–once you get it rolling, it’s easier to keep it rolling. Once you establish momentum, you need to keep it moving because if you stop working, you will have to gain momentum all over again. You don’t want to be in start-up mode forever–it’s exhausting. Never take your foot off the pedal.