The world of real estate investing can be an intimidating one. The sheer volume of information alone is enough to scare even experienced investors – let alone new ones. However, there are several principles that can guide you through your introduction to the industry. If – at any point in your initial year as an investor – you feel stuck, do not fret. There are steps you can take to stay on track, and keep you there. New investors, and even veterans alike, are advised to take these basic steps. That said, here are 5 things that every new investor should be doing:
Listen
Investing in real estate is a great career path. However, the first few months can be intimidating. There is a lot to take in, and most new investors feel inclined to get off to a fast start. Of course, there is nothing wrong with taking charge, but there is an initial learning curve that every investor is susceptible to. As tempting as it may be to get working on your first deal, take a step back and listen. Again, there is a lot to take into account.
As a new investor, there is a good chance that you have a lot of questions. Perhaps even more importantly, you don’t even know what you don’t know. That said, talk to people that have been in your situation before. Gain insight into what has worked for them, and what hasn’t. Listening to successful entrepreneurs that have come before you can be invaluable to your business. While you may be anxious to share any thoughts you may have, try to listen more than you talk. You will be surprised how much you can learn by simply listening.
Local investor groups and real estate networking meetings can serve as a great platform for making contacts. Get to know the people in your area and listen to what they have to say. Chances are: they know the area better than you and can provide you with good information.
Spread the Word
As I am sure you have heard before, the real estate industry is a people business – and it must be approached as such. There is perhaps no greater tool to an investor than his or her list of contacts. Remember, real estate is as much about what you know than it is about whom you know. Sometimes all it takes to get a good deal is to know the right people. How do you get to know the right people? Spread the word about your business and what it is you do in the area.
Most investors will be surprised to find out that their own personal contacts are a great place to start. Don’t be afraid to tell everyone you know that you are investing in real estate. It is the simplest, fastest way to grow your network, and it is a great starting point. There is a good chance that someone you know would be looking to buy, or sell. At the very least, they may be able to point you in the right direction. In other words: it can’t hurt.
In addition to your immediate contacts, let others in the industry know about your intentions within the business. There is a good chance you can work with someone in a mutually beneficial partnership. If an immediate partnership doesn’t form, at least you have another contact for your collection. Perhaps you can work with them down the road, or they may even refer you to someone else.
There is one major advantage to reaching out: building a contact list. You are essentially letting everyone know what it is you do. The better you get; the more inclined people will be to work with you. In the event that you specialize in a particular niche, people even may refer contacts to your business. So what are you waiting for? Get out there and let your presence be felt.
Familiarize Yourself with the Area
Real estate is as much about education as it is about knowing the right people. That said, the more you know about real estate – and investing in particular – the better. Investors are advised to learn as much as they can about the area they will be investing in. As a new investor, you do not have the luxury of falling into a well-established niche; you just need business any way you can get it. The best way to catch the attention of respective clients is to be able to provide the best service possible. And how do you do that? By knowing everything you can about a respective market. Essentially, the more you know about a given area, the more services you will be able to provide. Maybe you got wind of a new school going in. Perhaps a certain part of town caters to younger couples. Whatever the characteristic of a neighborhood, be sure to know it. Since you don’t have many (or in some cases any) clients, use this time to learn the ins-and-outs of as many neighborhoods and possible. The information you are privy to will assist in every aspect of your business. Phone calls, meetings and even site visits will all improve as your education grows.
Exercise Patience
Ambition can go a long way in shaping a successful real estate investor. After all, without big dreams – and a plan to achieve them – how far can you really expect to take your business? Having said that, there is a time for ambition and there is a time for patience. The two really do compliment each other. Subsequently, the larger your dreams are, the more planning they will require. And planning takes patience. The last thing you want to do is to rush into a real estate deal without having the slightest idea of what is going on. Negligence is a recipe for disaster.
Instead, understand that it takes time to learn the ins-and-outs of real estate investing. It is not uncommon for the average investor to sell about two properties in their first year. That’s a far cry from the 50 deals many want to accomplish. However, it is important to understand that investing in real estate is a marathon, not a sprint. Understand that you are building a business, and it takes time. The best thing you can do is to grow your business every day. Even small accomplishments add up in the end. So be patient. Your business will increase simultaneously with your education and experience.
Learn From Your Mistakes
The importance of a good real estate education can’t be underestimated. However, having said that, there is more than one way to learn. Often times, the most successful real estate investors are the ones that have stared defeat in the face. Take solace in the fact that you can learn from any set back. Knowing what not to do is just as important as knowing what to do. Everything you do as a real estate investor is an opportunity to hone your education. Only one real question remains: what will you do with the information you glean from an experience? Make sure you take what you learned from a past mistake and improve on it. Only then can you truly become a successful real estate investor.
