Every real estate course and seminar has at one time or another seen my mug. All of them promised that I would become a millionaire but it was just honestly more challenging than that. Success is something I have achieved though with a lot of determination. A good starting guide like this could have saved me years of learning the hard way.
I’d like to share with you the 10 most key hard earned lessons or what I call Click here that I’ve learned along the way through trial and error.
Lesson #1 – Purchase equity/Low payment or monthly term
You just don’t get a lot more than market value for a property in real estate. The only way to make money in real estate is to purchase properties for cheaper than market value. You can either purchase for a cheap purchase price, a cheap monthly payment or a both at the same time. You then sell your payment or equity for a higher price. There’s always a way to get started even if you are real estate investing with a day job.
Lesson #2 – Find the motivated sellers
A really motivated seller is the only one who’s going to give you a cheap price. You need to deal only with home owners who don’t want to sell their property but rather owners who must sell their property. Truly motivated sellers will reveal themselves to you when you ask them why they are selling their property.
Lesson #3 – A Situation that can fixed
You need to be able to fix the seller’s situation or it doesn’t matter if they’re motivated. If the house is in tatters, you may not be able to fix it. There are a lot of situations like a pending foreclosure that you can typically resolve.
Lesson #4 – Fixing a home is for suckers, fix the paperwork
Who profits more from a property, the banking institution or the property owner? The truth is that the bank owns the property and the landlord owns all the liability. Contracts that work for you go further in generating wealth.
Lesson #5 – Tenants are a pain, don’t manage them
If you manage tenants, you can’t get wealthy. Measily returns plus a lot of time commitment is what most landlords experience. There’s a lot less management required for a creative contract that pays the same returns as being as landlord.
Lesson #6 –Have multiple exit strategies
I was so excited to buy my first property but I realized I didn’t have much of an end plan figured out. Every good real estate investor knows how they’re going to move a property before they buy.
Lesson #7 – Don’t buy all the “location, location, location”
Location matters most when you pay full market value. If you’re acquiring equity when you buy, the local market is almost irrelevant. Even a slum can be a good deal if you buy enough equity. A cheap “ghetto” property is better than a full price ideal area. Don’t get sold on a great market, get sold on a great deal.
Lesson #8 – Get money making advice
Everyone gives you real estate advice. I had an epiphany. If stock brokers knew how to invest, they’d already be rich investors. If the people giving me advice knew how to make money real estate investing, they’d be using it. Investment clubs are loaded with real life investors with real how to answers for free.
Lesson #9 – Analyze the local market first
Having a “nice place” that’s close by is how most “investors” select their rental properties. A close drive by is not a consideration for buying stocks. You buy them to turn a profit. Real estate is a business. Analyze the cash flow position and resale options of every property in detail.
Lesson #10 – Market your deals or don’t do any
Marketing is 90% of every business. Focusing on quality marketing will allow you to work less and make more. Bring deals to you through the attraction of marketing. Marketing is the key to every business and every successful business knows that.
Use these lessons to save yourself some wasted time with bad advice.
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