Starting a new venture can be one of the most daunting tasks, especially an undertaking that involves money and risk. If you begin a new diet and don’t lose the weight, not much has changed. You slide right back into your old habits and comfort zone. Can you imagine investing money in real estate when you Mom told you it was a bad idea, and you ended up losing your investment?
I’ve heard those words “ I told you so”, but I didn’t let it deter my will to succeed. I just realized I needed a new approach. I am just thankful that I didn’t allow anyone to crush my dreams of financial success, including mom.
My goal in this article is to outline seven steps that any new investor needs to follow to achieve success in real estate. I developed these seven steps through hard knocks and creating huge mistakes, but without those mistakes I would still be chained to a mundane job with no ability to control my future. So let’s dive into the seven steps!
- Pick a market
- Due diligence
- Take responsibility
Investors think that a few podcasts and a couple of books on real estate will prepare them for the rigors and perils of investing. Does everyone forget it takes four years to receive a college education, and most professions require additional schooling? Podcasts and books are a fantastic start, but you will have to go deeper in your education to succeed.
So where should you start? Every investor should read “Rich Dad Poor Dad” to understand why real estate is a powerful tool to create wealth. A large number of our podcast guests point to “Rich Dad Poor Dad’ as opening up their eyes and minds to the opportunity with real estate. But this is just the beginning.
The next step is to seek out authors who also speak to the “how” in real estate. Our book Wheelbarrow Profits is a fantastic place to begin your multifamily investing. We have created a detailed three-step framework on how to create wealth and generate passive income with multifamily real estate: Buy Right, Manage Right and Finance Right. Our students are amazed at the depth and amount of actionable content that we share with the reader. If you are a podcast lover, subscribe to our weekly podcast Wheelbarrow Profits on Itunes.
Click HERE to download a free copy of “Wheelbarrow Profits”.
Other authors that have influenced my investing career are: Dave Lindahl, Dean Graziosi, Fixer Jay Decima and Gary Keller. These authors all have two ingredients that are crucial for the success of their students. They are investing in the current market and have achieved a level of success from doing, and their content is focused on the how part, not just the why.
Most “gurus” focus on the ‘why’ because they are not acting in the current market. Choose a teacher/mentor who has been in the trenches and is running their business in today’s market. Jake and I pride ourselves on the fact that we are continually pursuing deals to grow our portfolio.
This gives us the advantage of understanding what strategies are working today, where valuations are and what phase of the market we are currently in.
The internet has countless websites that offer tremendous content. We recommend Jake & Gino, Bigger Pockets, Connected Investors, Keith Weinhold, Seth Williams and Mark Ferguson as places to commence your education. These sites all offer a robust blog page and most contain their own podcasts.
Finally, once you realize that real estate is the right vehicle to take you to where you want to go and you commit to it, seek out a mentor or coach for a deeper dive. I credit much of my success in real estate to hiring a coach and developing a specific plan for me to follow.
A coach reduced my learning curve tremendously, which eliminated many mistakes and propelled me to success much quicker.
I was such an advocate of coaching that I ended up attending IPEC (Institute of Professional Excellence In Coaching) and became a Certified Professional Coach.
Is coaching right for you?
If you are unsatisfied with your current results, it may be time to take a harder look into hiring a coach and getting you back on track. Just hire a coach that has experience in real estate, and a coach who has a track record.
Pick A Market:
Once your education is in high gear, it is time to focus on a market you want to invest in. Are you fortunate enough to be able to invest in your back yard, or do you have to consider other markets to invest in?
I wrote in a previous article how not understanding my market was one of my biggest blunders. It is worth reading: Top Five Things I Wish I Knew. It describes what to look for in a market and how to choose an emerging market.
My first journey outside my backyard was purchasing duplexes in Rochester, NY. My market was nearly impossible to buy multifamily properties that cash flowed, so with the guidance of a coach, I decided to try my hand elsewhere.
Although I ended up selling the duplexes last year, the experience was priceless. I learned how to analyze a market, how to hire a management company, how to underwrite deals and I shattered my limiting belief that I needed to “touch” real estate in order to succeed. It set the stage for me to invest with Jake down in Knoxville, TN.
In the next part of this article, I am going to focus on the next steps to success.
Read further: The Seven Steps To Success in Real Estate – Part II
Please let me know what real estate books you have found helpful. I am always on the lookout for new strategies to learn and implement. My motto has become: Learn-Do-Teach. The truly successful people never stop learning and growing.