By Greg Herlean
As an investment expert, I’ve spent a lot of time on the road, giving talks and teaching workshops on general investment techniques and strategies, how to plan for your retirement, and related topics. Through my own investment research and through working with Mike, I’ve also become an expert on real estate investing. Together we educate freshman and intermediate investors all over the country with our Property Bank Education seminars.
It’s not surprising, then, that I get a lot of questions about how to be successful in real estate investing. Everyone wants to make money and be a success in what they do, and if you’re interested in investing, you no doubt want to know what you can expect and what you have to look forward to.
Unfortunately, I can’t give you a step-by-step, boilerplate guide that is “Guaranteed to succeed!” That kind of “recipe” assumes that everyone comes from the same background, with the same financial assets and goals, as well as the same connections. That just doesn’t work in the real world. However, I can actually give you a general recipe for real estate success that does work for the vast majority of investors. And it’s pretty simple, too. It boils down to three simple principles: self-evaluation, education, and execution.
First of all, when someone asks you for directions to your house or place of business, what is the first thing you ask them? You ask them where they are coming from, right? Without a start point, there is no path to success.
So, before you do anything else, you need to complete a comprehensive self-evaluation. This includes your current financial situation, the state of your investment portfolio, your liquid capital and/or assets, your maximum contributions to an investment per year, and everything else you can think of that will affect your real estate investing business.
This step also involves a thorough evaluation of your mental state and your commitment to real estate investment. Flipping houses is highly rewarding, but it’s not for everyone. Know your level of commitment and how much you want to get into this business before you spend a dime.
When I advise investors of any kind, I always tell them to invest in what they know. You wouldn’t put all of your liquid capital into an industry or product you knew nothing about, right? So why would you buy a property in a neighborhood you’re unfamiliar with at an unknown market value and with no good estimate on the costs of the repairs and rehab you’ll have to do?
Education is potentially the most important element when investing in real estate. You need to know everything you possibly can about the property or properties you’re investing in, but that’s not all. You also need to know the ins and outs, and the tricks of the trade. That’s why Mike and I teach our Property Bank Education seminars, to help people like you get up to speed on real estate and growing their businesses.
Finally, you have to take decisive action. New investors often find this step especially difficult. It’s sometimes hard to know when you’ve gathered enough information and educated yourself enough, and so you can easily get stuck in a rut, unable to execute the next step of actually buying the property.
Taking action could begin with bidding on a property at auction. It could even begin with sending informative postcards to motivated sellers as you gather leads on potentially lucrative properties. There are a lot of potential “first steps” in real estate investing, and Mike and I are both happy to share our wisdom and experience with you in our Property Bank workshops to help you determine your best course of action for success.