4 Keys to Success For Aspiring Real Estate Investors

August 5, 2020

Do you want to invest in real estate? I've spent the past year learning everything I can about it and today I'm sharing four keys to success for aspiring real estate investors. These are common mistakes I see time and time again so don't ignore these if you're trying to get into real estate.

  1. Know your market — Once you’ve identified the market you want to invest in you need to become an expert and know everything you can about that market. It’s no different than doing due diligence on a company before you buy stock. You study the company’s fundamentals, read quarterly reports, study the growth potential and annual return, and more. In your real estate market, I recommend studying the sales volume and speed, supply & demand of real estate, demographic data (age, income levels, population growth, crime, school quality), taxes, etc. It’s your job to learn what risks and rewards exist for any market you want to invest in.
  2. Know your limits — The dream of owning rental property seems enticing to just about everyone but it can be a lot of work. Yes, you can use a property manager to make things easier but you’ll still have to get involved from time to time to make decisions. Real estate investing seems like it should be easy passive income, but it can easily become a second job or side hustle. You must also know your financial limits. During Covid-19 many highly leveraged real estate investors are learning this the hard way with some renters unable to pay their rent resulting in them being unable to pay their mortgage. Always know your limits!
  3. Know your numbers — This is one of the most important aspects of successful real estate investing. Good investors study the numbers on any property and project the potential income and expenses to see if the property is worth buying. When I first started dabbling in real estate, I got excited thinking I could make money on any property, that is, until understood the true cost of ownership. Now I use a simple spreadsheet (free download below) to analyze a potential deal and know if it’s worth pursuing or not. Another key piece of knowing your numbers is understanding how you’re going to pay for the property. Are you going to finance it, pay cash, use a hard money loan? Make sure you know your numbers!
    Download my Free Rental Property Tracker Sheet for Analyzing Deals in Minutes!
  4. Stick to your strategy — There are many types of real estate you can invest in. Commercial vs residential, single-family home vs duplex, etc. It’s ok to invest in more than one type of real estate but successful investors often pick a niche and focus on it. It makes analyzing deals easier and allows you to specialize, especially when you’re investing in a large city with more deals than you have time to analyze. Real estate investors who aren’t laser-focused on their strategy and niche often get distracted and make costly errors. Be patient, avoid distractions, and stick to your strategy.

Create a strategy by knowing your market, limits, and numbers, and remember it’s a journey, not a destination. You’re going to get frustrated and experience setbacks but stay focused on the end goal. Getting started in real estate investing isn’t easy, but if you avoid these common mistakes you’ll have a greater chance of success.

Are You Stuck and Need Expert Financial Help?

It can be hard to know where to start or what to do first. As a financial coach, I have helped hundreds of people get out of debt, save & invest more, buy real estate, and transform their relationship with money.

I will help you create a system that builds the right money habits to enable you to achieve your financial goals. Everyone’s situation is unique so you’ll get personalized coaching tailored to your specific needs. I guarantee that you’ll leave feeling confident about your financial future and in control of your money!

If you’re interested, please schedule a free consult on my website and we can see if we are a good fit for each other. You can also email me with any questions at info@organizedbyjosh.com.

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