The list is seeming endless today regarding the number of people fighting for your undivided attention to show you how to be a real estate investor. Before taking action on any of their “silver bullet” advice, whether it’s paid or free advice, I’d recommend researching their track record and current standing as a real estate investor. In more instances than you can probably imagine, the real estate investing education industry is saturated with “experts” that allege to know a bunch, yet come up a little short on the doing.
There are two types of people in the real estate investing education industry, there are “educators” and there are “practitioners.” As volatile and finicky as the real estate market can be, the best education of how to be a real estate investor will typically come from the “practitioners,” the ones that are out on the court today making things happen.
Here’s the secret! Buy low and sell high is how to be a real estate investor. No duh! Right? Well, I bring that up because many sources will lead you to believe there are good markets to invest in and bad markets to invest in. No such thing. There are only up markets and down markets. And in any market, there is always a low price for you to purchase and there is always a high price for you to sell. If you know how to find the low price in any given market, it’s always a good market to invest in.
Additionally, given the fixed supply (land) and the rapidly growing demand (the population), there just will not ever be a bad time to invest in real estate. Well… unless somehow “shelter” goes out of fashion. If you can wrap your brain around that, then you are now ready to learn how to be a real estate investor. So much of becoming a real estate investor has to do with mindset, and part of the mindset is understanding an investor’s education is ongoing education, the operative word being “ongoing.”
Regardless of your experience, lessons will be entwined in every transaction. You’ll never know everything, so don’t try (as so many do) to learn everything about real estate investing before you get started, it’s so not necessary. With a basic understanding of the four basic steps to investing, you can take action; And it’s by taking action that you will learn how to be a real estate investor.
The First Step – Find a Bargain! Before you can do a deal, you must find one. There are many acquisition strategies that can be learned, and you can easily become overwhelmed trying to learn too many at once. The best real estate investing tip I have ever received is when learning how to be a real estate investor was to F.O.C.U.S. (Follow One Course Until Successful) by learning one acquisition strategy at a time and master it before learning the next. Short Sales, Foreclosure Auctions, Probate Records, Pre-Foreclosures, Bankruptcy Attorneys and Tax Auctions are all examples of acquisition strategies, and there are many more. By becoming a master of an acquisition strategy you will find bargains that the generalists won’t. No bargains? No profit.
The Second Step – Analyze It! Now that you’ve found a bargain, seemingly… how can you be sure that is actually a bargain? From my experience, property analysis is the most often ignored skill when learning how to be a real estate investor. Don’t make that mistake. This skill, or the lack of, can easily make you or break you. If you always remember that a property’s value is determined by what someone is willing to pay for it (as opposed to what YOU think it’s worth), you should be okay.
The Third Step – Put It Under Contract! Once you’ve confirmed that your deal is a bargain, the next step is to present an offer to the seller and put it under contract. As simple and logical as this step is to understand, for some reason it’s the step where so many investors (new and seasoned, alike) get stopped. Sadly, they’ve gone through all of the effort of finding their bargain, analyzing it and then never actually writing an offer to present to the seller. No offers? No transactions. No transactions? No profit. One’s ability to write offers, present them to sellers and successfully get the offers accepted will be in direct proportion to their profit. This is what real estate investors do, they write offers.
The Fourth Step – Close It! You’ve likely heard that “You make your money when you buy real estate,” but! You don’t actually get paid until you sell the real estate that you bought. As previously mentioned, there are several acquisition strategies of which to choose, but there are only four exit strategies [1) Wholesale, 2) Fix n‘ Flip, 3) Lease Option and 4) Buy n‘ Hold]. Another underestimated skill investors commonly fail to embrace when learning how to be a real estate investor is being clear on how they’re going to get out of the deal before they get in. Don’t do that. You must begin every transaction with the end in mind. You’ll discover quickly that paychecks are few and far between if you don’t. To consistently and successfully invest in real estate, a good real estate investor will know which of the four exit strategies to use in any given scenario to maximize their profits.
To sum it up, “How to be a real estate investor” consists of understanding that there will likely never (at least not in our lifetimes) be a bad time to invest in real estate and an investment in one’s real estate investing education will yield the greatest returns, but nothing happens until one takes action. On the court and in the game is where one will truly learn how to be a a real estate investor. Learn the four basic steps of the real estate transaction in the order that you’ll take those steps, move at the speed of instruction, and then you too should have no problem joining the ranks of the countless millionaires that are being created daily by taking advantage of today’s real estate market.
Here it is… 1) Find a Bargain, 2) Analyze It!, 3) Put It Under Contract!, and 4) Close It! Learn all of those and F.O.C.U.S. on one acquisition strategy and you’re ready to play the game.
So, where should you go to learn these basic steps and your investing strategies? There are so many options today for your real estate investing education. Do some research so you choose the best one out there for you. If you’d like, you can start here. Here are three that I recommend. Click here to review them yourself.