If you think real estate investing is just for the wealthy, think again. My JOB + REAL ESTATE = WEALTH program teaches new investors how to create and preserve wealth through smart, strategic real estate investments. My proven JOB + REAL ESTATE = WEALTH methodology makes real estate investments attainable, achievable, scalable and sustainable for “regular” middle-class people with a little extra cash to invest.
This approach educates and empowers people to be successful real estate investors. The concept is simple – keep your ‘day job,’ learn to make smart real estate investments ‘on the side’ and acquire more wealth.
If you want to get started in real estate investing, I recommend taking these first steps:
- Get your mind in the game. Realize that real estate is a participatory business. Once you’ve made the initial investment, you’re committed to that business. This isn’t something that you can completely hand off to your property manager and then wait for money to start rolling in. Much of your success is dependent on your own input. Even if you have a wonderful property manager, you’ll still need to manage your manager. You may not be involved in every detail, but you need to have a clear sense of the bigger picture. Even if this is your part time business, it’s still your business. Before you do anything else, make sure you’re in the right mindset to proceed!
- Understand real estate basics. Some people get involved in real estate for the wrong reasons. Perhaps your friend mentioned how much money they made through real estate investing, and now you’re looking to replicate your friend’s success. Before you invest, make sure you understand real estate concepts, terminology and industry basics. This knowledge will help you develop realistic expectations. Understand how this investment will be different from other investments – such as the stock market – and be clear on real estate’s benefits and potential risks.
- Create time. When people utilize my JOB + REAL ESTATE = WEALTH approach, they’re working another job and investing in real estate “on the side.” The #1 objection that I hear is that people really want to get into real estate, but they don’t have the time. It reminds me of when people say they really want to work out, but they don’t have the time. If they really were committed to working out, they’d figure out a way. They’d get up an hour early to hit the gym before work, or they’d jump on the treadmill in the basement after their kids went to bed at night. There are only 24 hours in a day, and we can’t change that, but we can look at the way we allocate our time and shift our priorities accordingly. I recently read The Four Hour Work Week by Tim Ferriss, which promotes the “batch principle”. Instead of frantically multitasking – responding to emails while working on a report and answering phone calls – try doing things in batches. Check and respond to email at designated times each day, then focus fully on writing the report with no distractions. Consider how you can work smarter, not harder, and you’ll find the time for this.
- Understand your personality type. In my JOB + REAL ESTATE = WEALTH book, I outline a variety of personality tips – such as the Paralysis by Analysis, who analyzes every detail before moving forward. In some ways, it’s great that they’re thoughtful about decisions, but they could also miss out on hot real estate opportunities by taking too long to deliberate – like losing a property to someone who put in a faster bid. Conversely, some people leap before they think, making quick decisions before considering all the facts. They might grab a property quickly, but could lose out on the best price or rate because they didn’t do their homework. Before investing in real estate, be introspective. Figure out your personality type, then learn to use your strengths to your advantage. Whether you’re a deliberator or impulsive, there’s a silver lining in your personality. Leverage it to maximize your success.
- Know why you’re investing in real estate. Are you making this leap because of what you’re hearing – your friend made a ton of money, a commercial is touting low rates, your cousin insists that it’s a “buyers’ market”? I call these “trivial benefits.” Then, there are also more traditional, time-tested benefits. For instance, no other asset offers cash flow like real estate, which provides income on a monthly bases. (Stocks aren’t guaranteed to do this!) Another huge benefit is the power of leverage. You can buy an asset that you normally couldn’t afford on face value. You can buy a $360,000 building with only 20% down, then rent it out and use the money you earn from your tenants to pay down your mortgage. Then, of course, there are the tax benefits of owning real estate. Your taxable position is a benefit, allowing you to pay less in taxes than what you’re actually making on the property. Say you’re making $15K in cash. Your taxable position may only be $4K, so the delta between the two ($9K) is the advantage. Additionally, the IRS lets you write off the interest payments on your mortgage, as well as the depreciation of the property. The logistics around the taxes can seem overwhelming at first, but when you surround yourself with a great team (the topic of an upcoming blog!), they’ll help you take advantage of every benefit.
Before doing anything else, get in the right mindset. Understand what you’re getting into and know that real estate isn’t an instant fix. Have the sense of longevity, and realize that real estate isn’t a “get rich quick” scheme. You need to be in it – and committed – for the long term.
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