How To Get Started in Real Estate Investing… With Little Money
The 6-step action plan to getting started in real estate investing quickly and successfully…
With all the loads of info out there, it’s hard to figure out what you’re going to do and how you’re going to get started in real estate investing. I know, when I started, the very first thing that went through my head was, “Is this going to work?”. All of us want our new venture to work out. It’s scary though since the statistics show that 20% of new businesses fail the first year and 50% of those that make it past the first year won’t make it past the 5th year.
That’s, unfortunately, the truth of entrepreneurship and the school of hard knocks.
That’s the reality for any new business. However, if you can make something out of it (which in this article we’ll show you methods to increase your chances of success), real investing offers a multitude of ways to earn comfortable passive income streams for the rest of your life. However, there’s a huge range of strategies to choose from. And, each offers a different lifestyle. Whether you’re looking to invest with extreme passivity (sitting in front of your computer and making a few investments), or you’re looking to create a volume-house-flipping-business with a team behind you… real estate investing has brought financial freedom to many… and it offers a huge range of ways to do it.
So, the question is how are YOU going to get started in real estate investing and what’s the best way to get started so you start off on the right path?
From my experience with $5,000 coaches and $400 seminars, my own lessons in the school of hard knocks, and many hours spent talking with very successful investors, I bring you this article to show you a step-by-step guide to getting started in real estate investing starting from scratch… and the best road to take without spending a ton of money.
So, let’s move on to the first and best method of learning your new beginnings as a real estate investor.
1. To get started in real estate investing…. visit as many REI meetups as you can
This is the most overlooked but most powerful way to get started. Not doing this, was the biggest mistake I made when I started in my real estate investing career.
The basics of this are simple: You want to know what works and what doesn’t in your market area (or an out of state market). There’s no better place to go than your local real estate meetup where many investors are there putting their systems and tactics to the test.
As a beginning investor, you want to know what strategies in real estate investing work, how much money you need, what formulas work, what’s selling well, if it’s a buyers market or a seller’s market, what the rents are, etc.
I made the mistake of relying on online forums rather than the local meetups.
There are two problems with that:
- People in the online forums aren’t in the same market location as you; what works in one location doesn’t necessarily work in another
- The advice given in the online forums can be 10 years old; what worked (strategy and technique) in the market 10 years ago, may not work today.
You want the fastest and most sure path to success in your new venture. Doing anything opposite of what works in the market (especially as a brand new investor), is pushing a rock uphill.
So, learn what others are doing in your area TODAY…. That’s a big indication of what will work for you.
To expand on this idea, there’s a guide to getting the most out of real estate meetups in this article here.
The second (and equally important) method to increase your chances of success is…
2. Find the right niche for you
There’s a plethora of information out there online, thousands of videos, thousands of coaches. Hundred of ebooks. There’s a number of blogs and books online that discuss different strategies in REI. Choosing a niche that you’ll not only enjoy but is profitable is crucial.
To find the right niche for you, first, get familiar with some of them (there’s vacation rentals, traditional SFR rentals, storage units, mobile home parks, mobile home investing, land investing, and much much much more).
Once you have some idea of different strategies you can use to accomplish your goals, you’ll have to pick one by asking…
… “What’s the best strategy for achieving MY financial goals?”
The truth is… there’s no best strategy when it comes to getting started in real estate investing. The best strategy revolves around the questions:
- what’s working in your market today (I can’t stress this enough),
- what’s going to get you to your financial goals efficiently,
- and what suits your strengths and skills.
Sure, everyone wants to get into real estate investing to make more money. But, while you’re at it, you should also enjoy what you’re doing. I know, many gurus don’t talk about this. But, I’ve experienced this myself; Being in a niche that is making lots of money for you, but where you hate the process and everything about it… is no fun.
I’m not talking about following your passions. Following your passions is not always a sure way to success. However, finding what works in the market place first, then fitting your strengths and aptitudes into it is the best way to start any real estate investing venture.
What do I mean by this?
Well, I go into further detail in the article here: Find the right real estate investing niche for you, but, to briefly expand on this: everyone has strengths and aptitudes (what you’re naturally good at AND enjoy). It’s important to enter into a field that has lots of potentials to make money and one that you enjoy doing while you’re pounding away at it, day and night.
Picking the right niche for you can be difficult, and can take time. But, if you find that it’s taking longer than expected, then…
You just need to pick something and go for it.
Because, most likely, regardless of what you choose, it’s not going to be the end-game for you. Like most, you’re going to shift. You’re going to learn new things, adopt new strategies, and prefer other niches. Don’t get caught up in picking the right strategy right now.
Just be aware, that the best one, is one that is working in your market area today and fits into your strengths and aptitudes.
3. Imitate an active real estate investor
“Pioneers get shot and settlers get rich”
Don’t be a pioneer when you’re starting out in real estate investing…
… there’s a time and place for that later on in the business. However, when you’re starting out, it’s important to find the person who’s working the strategy that you want to do (you probably met him/her at the local REIA); you don’t want to go at it alone.
In fact, most of the successful investor’s people I’ve interviewed started with being underneath someone’s wing. Going at it as the sole-ranger only means that if you don’t get it right the first time (which most people don’t), you’ll learn a very hard lesson in “the school of hard knocks”.
Learning from your mistakes is a good way to learn… however, it takes a loooong time to get it right if you have no guidance. It took me a year and a half to find my first deal and over $20,000 spent on marketing. It was only when I finally got some guidance is when I landed my first deal.
Finding that Mentor
So, to find that person to take you on as a mentee, he/she must be:
- Still active in the business today
- Working actively in the niche you want to start in
- Open to taking you on as a mentee
Now, this might be difficult to find. Most people aren’t open to just taking you on and teaching you like that. If all you can find is a coach/mentor that does this for a fee, then you’ll have to fork over some money. However, if you visit many local real estate investing meetups, you’ll find that there are many active investors there, and many of them aren’t paid, coaches.
So how do you go under someone’s wing… for free?
4. Barter for Eduction
Paid coaching is expensive. We all need coaching from time to time. But when you’re starting, you don’t know what you don’t know. And it’s best to do as much as you can while being thrifty. I’m not saying here don’t spend money on your business. However, if you’re brand-spanking new, you don’t know what to spend money on, or what do to next, or how to get started in real estate investing.
So, a better way to learn is to…
Bartering and trading have been around for thousands of years. And, businesses do it every day. See this article to explain trading and bartering even further.
CASH MONEY isn’t the only way to pay for things. We all know this but we don’t practice it. Learning this skill is extremely valuable in real estate.
Some examples of real-life trades:
- People trading cars for a down payment on a house
- Accepting boats as a downpayment, then selling the boat for more money
- Trading services for consumer products
- Giving a parking spot in exchange for monthly landscape services
You can do the same thing with a mentor.
The key is to find something he/she needs, and offer that in exchange for an education (you’ll find more on this topic here: how to find a mentor in real estate investing).
Everyone needs something. And, it’s your job as an entrepreneur to figure out what that person needs and give it to them. This is also the first step in deal-making skills (one of the most important skills in real estate investing).
- If that person needs a project manager, offer to replace him/her by driving around to these projects and checking up on it
- If he/she is an active door knocker, offer to door-knock his/her list for them
- Offer to go to the courthouse for them to get their lists (many investors obtain lists this way, especially if they are doing probate deals. This can be a great learning experience)
- Offer to drive around jotting down the addresses of vacant houses (if they do this themselves)
- Offer to cold call their list
There are many things you can do, it just takes time to ask the right questions and figure it out.
Once you figure out what you want to do in real estate investing, and you visit the meetups constantly to get a knowledge of your market area…then it’s time to get under someone’s wing and imitate them, and you can do that by bartering your way to them.
That is the fastest and surest way to success.
5. Constantly Be Networking
Real estate is a people business. And, what I’ve found with some of my other non-real-estate related businesses… is that every business grows because of the people you know.
The whole cliche, “It’s who you know…” Stands true 100%.
If you’re shy, or an introvert that’s fine. There are plenty of introverts are have an abundant network. I’m sure you’ve heard the saying, “your network is your net worth”? Cheesy I know. But true!
Meeting new people doesn’t need to be hard. Here’s an article that shows how to network with real estate investors.
Once you start becoming a regular at a forum or a meetup, it becomes easier to befriend the people there. Then, they know people and they introduce you.
The truth is, networking comes easier to some and not others. Some, have the personality that magnetically attracts others and is rememberable. So, here are some ways you can attract a good network as well:
- Bring deals and leads to them… investors are always looking for deals.
- Be hungry for success… Investors only spend time with those have a drive
- Be a leader… this sounds odd, but leaders gravitate to other leaders. And, this shows immediately when you meet someone
- Follow up… this is important, because, they won’t call you. You must contact after the initial meet. People appreciate this and will remember you for doing so
6. Learn Selling
If there’s one skill that transcends all industries and positions… it’s selling. You’re always selling. No matter what position in.
If you’re networking, your selling (persuading others to believe that you can give them something of value), when you’re cold calling realtors (persuading them to consider your offer)… talking with motivated sellers (selling your cash offer and it’s benefits)… talking with investors (selling the idea that they can get a great return by investing with you).
The skill of selling is something that can take time to learn so it might as well start now.
It’s a skill that will be with you for the rest of your life… not just in business, but in your personal life as well: looking for a date, persuading your kids to go to bed early, getting a discount at the local store, etc.
It’s an important skill that even the famous Mark Cuban says in this article, for it to be the number 1 skill you harness.
So how do you start?
This article here is a good start on some of the basics, but let me guide you with these three basic points:
- Gobble up every famous book on selling (Dan Kennedy, David Sandler, Dale Carnegie, Tom Hopkins, Frank Bettger)
- Learn to weave stories that relate (Stories sell, and every great salesperson I’ve witnessed were amazing at telling stories to clients/prospects)
- Always ask the question (you can be great a rapport building, great at customer service, great at listening…. but none of that means squat if you don’t ask to close. Closing means asking for the order, asking if they want to go forth with selling the house, asking if you can have their phone number, asking for an address to send them something…. you always want to gain something out of the conversation. And closing is the most important skill for this)
But, with all this research…. you must take action
Analysis paralysis can set in very quickly. I’ve stressed that you must know what works in your market location today… and I’ve stressed how you must choose what works for you…. But all that research and thinking won’t move you forward into starting your real estate investing career without action-taking. And, that’s why it’s important to jump into something soon, and start imitating and following that mentor in your field today.
Knowledge without action is useless.
Goal setting to get started in real estate investing in 3 months:
Give yourself a timeline and a goal: “In 3 months I’m going to visit every REI meet up in my area every single week, I’m going to figure out what works, and figure out what I want to do, then find a mentor… and finally, START finding deals.”
Giving yourself a timeline with a goal is one of the best “tools” you can have to get started in real estate investing.
Don’t wait for “perfect” because perfect doesn’t exist. Believe me, you’re going to have the temptation of waiting until your ducks are all lined up… but they will never be perfect. All that rational thinking is just your brain going into defense mode; you’re charting into unknown territory and your brain is trying to protect you. When you have some idea of what you want to do, and you’ve done some research into what works (by visiting meetups and reading different strategies), it’s important to find that mentor and START, ready or not.