Expert Panel®Forbes Councils Member Forbes Real Estate Council COUNCIL POST| Membership (fee-based)Real EstatePOST WRITTEN BYExpert Panel, Forbes Real Estate CouncilSuccessful executives in the real estate industry from Forbes Real Estate Council share firsthand tips & insights.
If you’re new to real estate, you’re probably eager to get into the action and gain some experience. However, you don’t want to move too quickly or bite off more than you can chew—a wrong move in real estate could be disastrous if you have limited resources or industry knowledge.
Still, everyone needs to start somewhere, and it’s OK if that “somewhere” is small-scale or simple at first. We asked 16 members of Forbes Real Estate Council to share some easy ways first-time real estate investors can get started. Follow their tips if you want to dip your toes in the industry pool.
1. Buy A Multi-Family Home And Move In
Start with a multi-family home (duplex or triplex) and use one of the units as your primary residence. It will drastically reduce your overhead costs and prevent you from being overleveraged because you’re not paying a mortgage on two different properties. This also allows you to take your time and slowly improve the other unit(s) as you learn the ropes. – Ron Costa, The Eighty Two Group @ Compass
2. Consider Multiple Scenarios
Firstly, it takes time to create a positive impact on the market. The important thing is to be faithful to the big picture and constantly consider various scenarios. If your worst scenario will make you gain money, you are safe. Also, it is important not to overthink some calculations. Get started because you know that events like COVID-19 may happen and your investment timing could only be delayed. – Marco Calignano, CALIJUS Investments & Business Management Forbes Real Estate Council is an invitation-only community for executives in the real estate industry. Do I qualify?
3. Know What You’re Looking For
Investors should set their parameters carefully. Identify product type, price, number of tenants and the rate of return you are willing to accept. I call this “building your box.” If a property does not fit in the “box,” walk away. The biggest mistake I see is investors make is falling in love with a property and being unwilling to walk away if the deal doesn’t fit in their “box.” – Eric Kimose, Panorama Commercial Group
4. Get Your Real Estate License
This is a common debate among investors. Some will tell you that getting your real estate license is not the best use of your time. However, I couldn’t disagree more. If you are starting out, getting your license will open up so many doors within the industry and allow you to find and acquire deals on your own. This will make you a much better real estate agent down the road. – Kris Lippi, ISoldMyHouse.com
5. Think Long Term
When you invest in real estate, you must keep in mind that it is a long-term asset and therefore a long-term investment. To start, focus on properties that generate good yields in short periods. For instance, look at well-located properties for long-term renting or properties in tourist areas where you can get income from vacation rentals. – Jesús Mateu, JEMMOMA
6. Keep Training And Learning
Lack of experience and knowledge is why most investors make the wrong moves when investing in real estate. People often admire our first responders whose jobs mean they have to put their lives on the line. But many of them will tell you it isn’t courage that propels them—it’s training and that’s what they are trained to do. The same is true with real estate investing. Never stop training and learning. – Ken McElroy, MC Companies
7. Partner With An Experienced Investor
If you’re brand new to investing, you’ll have more time on your hands than money to spend. Offering to spend some of that time assisting an experienced investor with day-to-day tasks is a great way to get into the game and learn the business. Offer to help source deals or take some of the admin work off their hands. Show your value and keep your ears open. You’ll learn a ton just by being close. – Willie Mandrell, The Mandrell Company, LLC
8. Invest In Your Own Home
The first real investment you should make is in your own home. The amount of time, effort, energy and diligence you’re going to spend buying your own home is so much more than you’ll spend on an individual investment because you’re emotionally invested. You’re learning the neighborhoods, seeing how it fits and doing inspections. You look from a long-term horizon, which is imperative for investors. – Kellie Rastegar, Rastegar Property Company
9. Outsmart Major Repair Issues
Foundation problems can reduce the market value of a house, creating a situation where cash investors can buy low. Fewer potential buyers may give you more leverage during negotiation. The result could be a lucrative real estate opportunity. Use free foundation inspections to calculate potential profit margins after the repair. Keep in mind financing options can be limited for these properties. – Matt Malone, Groundworks
10. Start Small And Look At Every Deal
Many investors want to start their careers on $100M deals, but will end up chasing dreams. The key is to start small, take an extremely hands-on approach and get a few wins under your belt before going big. Also, it’s important to follow every deal in your market, even if it’s not a perfect fit. Learning from others and getting your name out there as a real player are the keys to early success. – Max Comess, Hodges Ward Elliott, LLC.
11. Build A Focused Expertise
The best way to get your start is with a focused approach. Pick a market or segment and get to know its dynamics. Practice due diligence in every investment before you commit by educating yourself on the types of strategies that resonate with you and market specifics such as pricing, costs, comps, etc. Build a reputation for expertise in that segment and you’ll become the “go-to” for that market. – Mike Miedler, Century 21 Real Estate LLC
12. Do Your Due Diligence
In the current environment, there are going to be a lot of “good” deals being pushed out there. The good thing is that there are also a lot of good data resources. It may seem basic, but if it is too good to be true, run. Take your time and invest wisely. Look at where people are moving. There is a shortage of housing, so going forward, rental homes are a good bet. – Noel Christopher, Renters Warehouse
13. Find A Mentor
Educate yourself and find a mentor. When you have something to bring to the table, a good mentor will work with you and help you to avoid some of those dangerous pitfalls. When you can use the benefit of their experience to learn, you’ll go much further, faster! – Melissa Johnson, Dannybuyshouses.com
14. Develop An Action Plan
One manageable way to lay the first stone on your real estate investment journey is to create a straightforward action plan. The plan should consist of your intended outcome and specific steps necessary to achieve your results. Identify a timeline and outline the strategies you will implement during the process. – Adrian Provost, LEVEL
15. Consider Time Versus Money
If you have more time than money, then start finding fixer-upper deals on your own. Do the work upfront and then take those deals to a local real estate investor club. You will be respected for not asking for a free handout, and investors who want deals will be happy to see what you found and share their thoughts. You learn for free and the active investor may buy your deal. It’s a win-win. – Dani Lynn Robison, Freedom Real Estate Group
16. Immerse Yourself In The Real Estate World
Invest in a single-family rental and property manage it yourself. It’s how I started. Join a local real estate investment association and learn. Learn from those who are actively investing, not just those who talk about investing. On the remodeling side, learn from your suppliers and subs. Go to real estate conferences and immerse yourself. Those who put that knowledge to work, win. – Amy Tiemann, TM1 Properties Expert Panel®
Forbes Real Estate Council is an invitation-only, fee-based organization for senior-level executives in the real estate industry.… Read More
Source : Forbes