Is It Hard to Get Into Real Estate Investing?

The process of getting your foot in the world of real estate investment isn’t easy for novice investors. Many people look at successful investors and believe they have some “secret” as to why they’re so successful. So many have asked me many times throughout my career in the field of investing: Ryan Do you think it’s difficult to begin real property investing?

It’s not difficult to begin real estate investment. However, it’s difficult to succeed. Investors who are new to investing must devote time and effort learning investing fundamentals. They must then adhere to a system that has been tested that will help them analyze their next investment and follow through with the plan.

In this article, I’ll discuss how to start your journey into real estate investment. In particular, I’ll go over the following topics:

• An Overview of Successful Real Estate Investing
• Following a Proven Investing System
• Reverse Engineer Achievement by implementing The Next Deal Blueprint
• Execute Your Real Estate Investing Strategy
• Final Thoughts

IS IT HARD TO GET INTO REAL ESTATE INVESTING?

It’s not difficult to get into real estate investment. The better question is how difficult is it to become a successful real estate investor? It depends on your. The key to the success of real estate (and the majority of other areas!) depends on the amount of amount of effort you’re willing to invest into learning and getting experience.

Most people don’t want to do the work required to make a success being an investment professional. If you’re a novice investor chances are you won’t make it in the long run if you don’t spend at least 15 to 20 hours per week. If you stick to that schedule for a period of six months or more and you’ll be able to get your foot into the market. As long as you don’t, you’ll discover it very difficult to become an effective investor.

In general, these are the essential elements for getting success as a real property investor:

• Desire and dedication with the length of time that real investment in real estate takes to understand and practice, you will not be able to be successful without these qualities.

• Knowledge The Knowledge is tied directly to the traits mentioned above. For you to be able to successfully invest on real estate you have to be educated about the real estate. There is no one who was born with an knowledge of the field. You must instead commit yourself to “academics” – reading books and articles, listening to podcasts and finding mentors and everything other way you could do in order to gain knowledge about real estate.

• Use a proven method There are a myriad of ways to achieve real estate investing success. However, the thing you’ll notice the most successful investors are that they use a tested and proven investment method. This is advantageous because one of which is that) you’re aware of how that the system is working and also 2) you’ll be an expert on the subject matter of the system you’ve chosen to follow.

• Create a plan that will “reverse engineer” success Find your next transaction, and go backwards to determine the steps needed to move from goal to an agreement that is successful.

• Execute After you’ve created the strategy above then you must go out and be disciplined to follow those essential steps every week to be successful.

In the remaining portion of this article, I’ll expand on the three previous items.

FOLLOWING A PROVEN INVESTING SYSTEM 

Many different real estate investing methods and variations of these systems are available. Certain of them are more complicated than others. This is why I would like to create a path of learning. Each of the investing strategies builds upon the previous ones, and a lot of successful investors are experts in each one before moving onto another one.

Although you don’t have following these directions in exact order these investing strategies can help you navigate your “investor lifecycle.” Learning the steps in a systematic manner lets you improve your understanding.

Bird Dog

bird dogging provides a great low-risk method to begin your journey in the world of real estate. And it doesn’t require the use of anycapital. To earn money, you’ll have to be a hard worker and study lots. However, if you fail to make the right decision in a transaction and lose a lot of money you invested when you make a mistake.

Here’s how it is done. There are many real estate investors earn money by wholesaling and I’ll go over it in the next article. In a nutshell the wholesaling process involves investors having to discover deals that they can offer to investors. Although wholesalers have the ability to conduct this task, they typically employ other individuals – bird doggers – to complete the task for them.

Bird doggers are searching for a specific kind of deal. They are looking for homes that are in need of repairs that don’t qualify for conventional financing. Also, traditional mortgage lenders would like to ensure that a home is suitable for living. Bird doggers are looking for homes which don’t meet the criteria. The people who own these homes have to possess the following: A) at least some money in equity on the house and B) an incentive to sell it – typically in order to convert the value into cash.

If bird doggers come across leads in these situations and pass them on to wholesalers at a cost. They might receive a payment for each lead however, it could also be a contingent fee based on the lead’s conversion. It all depends on your relationship with a specific wholesaler. However, regardless of the how you pay it is the chance to acquire an understanding of real estate investing with no barriers to admission.

Wholesale

After you’ve been bird scouting for some time, you’ll be able to move into wholesale properties on your own. This investment strategy allows you to earn money without the need to purchase any properties. This is why it is a fantastic option for those who are just beginning their real estate investing seeking to build knowledge.

Through wholesaling, you do not buyan an investment home. Instead, wholesalers search for properties that are not on the market and then sign contracts to purchase the properties. Instead of closing on purchase they transfer these contracts to third-party typically a fix and flip investor. Then, they assign these contracts in exchange for an amount. So, wholesalers can discover deals, connect sellers to investors, and earn an amount in return and all without the hassle of rehabilitation themselves.

When you buy wholesale, you are able to quickly identify great deals for fix and flip investors. If you aren’t able to find great deals, you’ll not be capable of assigning contracts to these investors. Simply put, you are taught what to look for when buying the property. Furthermore, you need to be in close contact with home flippers. This will give you the benefit of getting knowledge from them. Take their advice. They’ve got a lot of knowledge, and you could learn from them. Additionally, selling your wholesale business will put money in your pockets. If you’re disciplined, you may use a portion of these funds to a down payment to buy your own fix and flip property.

All of these benefits of wholesalers put you in a position to take the move to the next option.

Fix & Flip

If you are an fix and flip investor it is important to be aware of what wholesalers are doing about getting good deals. However you also must know how to sell and rehab these properties. In general terms the fix-and-flip strategy works as follows:

• Step 1, Locate distressed properties Investors must identify properties that require rehab work in order to be eligible for conventional financing. These properties must to be financially viable. The purchase price as well as all rehab-related expenses must be lower than the estimated value of the sale in order to generate an income.

• Step 2: Repair the house When purchasing an uninhabitable property the house flippers have to make it a new property that A) can be considered conventional mortgages and B) attracts potential buyers who are in the same market. This requires a thorough knowledge of renovations and working with contractors and preparing accurate rehab budgets.

• Step 3: Sold the home : Finally the house flippers must sell their property. Typically, they sell their properties to home buyers who are primary. This means they sell to buyers seeking to purchase their own home and not as something to invest in. This requires a thorough understanding of pricing and sales strategies, as well as an accurate study of the local market.

The information above is a brief outline of the home flipping process. It should however be evident that this method is a bit more complex and requires more expertise and understanding that birddogging, or even wholesaling. However it also gives investors much higher return. When you’re in the home flipping process, you’ll definitely make mistakes. While you go through a handful of deals, you’ll acquire a wealth of knowledge.

BRRR

After getting knowledge in the fix and flip market Many investors decide to leap into investing in the the BRRR method. This requires all of the expertise and experience of flippers. However, you also require a thorough understanding of the property management process as well as permanent finance. These are the steps to follow in an BRRR strategy:

• Buy investors purchase distressed properties – usually at a substantial discount that require major repairs. Therefore, BRRR investors tend to are looking for the same kinds of properties as fix-and-flip investors.

• Rehab The investor will then renovate their property. But, they don’t renovate it in order to offer it for sale. it. Instead, they conduct their work with the intention to attract tenants. Renovating rental properties typically requires the use of more durable material than remodeling for sale. It is essential to choose materials that are able to take all the wear and tear caused by many tenants. You do not want repair work every year. This rehabilitation is directly linked to the next stage of your strategy.

• Rent After you’ve finished the remodel, you’ll have to sell the house to the possibility of renting it and secure reputable tenants. It is possible to hire a property manager to manage this. This will save you a lot of stress however, the process also costs the money. From a personal viewpoint, I suggest that investors take care of at the very least one of their properties. This will give you a thorough knowledge regarding the renting and management process. You’ll be better equipped to hire and oversee property management companies later on.

• Refinance After you’ve renovated the house and signed a lease agreement, you may take out a refinance. In general, BRRR investors (and flippers) utilize the hard-money credit for financing a home purchase and renovation. However, these loans carry higher interest rates because they are designed for investment in short-term use. If a property is in compliance with the traditional mortgage standard of quality and is let, you’ll need to refinance to the traditional mortgage. This loan will be used to pay off the loans made by hard money.

The steps above illustrate that BRRR investing needs all the knowledge and experience of flipping homes, however there are two other nuances. The investors must understand property management and must have a greater understanding of financing real estate. The success of the plan depends in refinancing and that’s why it’s essential understanding.

While it requires more expertise however, this method also offers greater profits. When you flip a house you earn a profit that is one-and-done. When you’ve sold a house and you make that profit, that’s the amount you make , for greater or less. The BRRR investing can create long-term wealth. Alongside the initial profit through the pocketing of a percentage of the refinance funds You will continue to earn money in three different ways.

First, you take out the rent that is in excess of operating costs as well as debt servicing. In the second, you gradually increase equity in the property , as tenant’s payments help pay off the mortgage’s amortization. Thirdly, homes increase in value in time. Although they might be volatile in short term however, over time (especially with a 30-year mortgage term) house appreciation generally has been higher than inflation.

BECOME A LENDER

The final stage of the process of investing in real estate requires knowledge of every one of the strategies that have been used previously. Once investors are familiar with these strategies and their implications, they usually decide to turn into private or hard money lenders. Note that both the lenders operate in a similar way however they operate as formal companies and private lenders function as individuals.

On the surface the lenders seem to be doing more work than they do. And in some ways, they are. You can lend money, relax and make money. To do that effectively, you must know the best ways to analyze deals. Lenders earn their money only on profitable deals. If you lend money to anyone that fails, you’ll lose. In order to issue loans, lenders must to analyze their deals thoroughly similar to how they would do as fix and flip investor or investor in BRRR. But now, the loan’s interest will be an income and not an an expense.

However, lenders must be aware of something more than simply analyzing deals. They also have to be aware of what are the legal and administrative and financial requirements for making loans and directing their administration. Unfortunately, a large the process of knowing about foreclosure processes, in addition. An upfront due diligence process can lower the chance of a borrower’s defaulting on their loan. However, in some cases, a string of unfortunate events can lead to the borrower’s insolvency. If you are the lender in this scenario you must be ready to implement foreclosure procedures in order to recover as much principal loan as is possible.

EXECUTE YOUR REAL ESTATE INVESTING STRATEGY

However, a great plan isn’t the best amount. It’s definitely a crucial aspect, but ultimately you have to follow through with your plan! Each week, you have to complete certain tasks that can lead to successful outcomes.

For instance, I am a fan of a method that I call “driving for dollars.” Simply simply, you jump in your car, drive through various neighborhoods, and then look for houses that could be bargains. It is possible to find a damaged home or one that looks abandoned. No matter the kind that property is looking for taking a drive for a couple of hours every week will allow you to find many opportunities. We’re so confident that this method that we’ve created an Drive for Money application to assist you!

But the most important thing to remember with the steps you take is perseverance. Every week, you need to meet your goals. For instance, if declare that you have to call 50 prospective sellers Make 50 calls. If you have to locate 20 homes while driving around for dollars, to find 20 houses. This will definitely exhaust you. A majority of people will turn down your propositions – and some harshly. It requires a lot of determination and stamina to remain committed to your strategy even in the face of challenge. If you keep on track, you will see that good things are bound to happen!

FINAL THOUGHTS

After laying out all of the above, I am aware how overwhelming the process of becoming an investor new to real estate could be. This is reason why Do Hard Money team is there to assist! We’ve got a lot of resources for new investors. From finding deals, to finding financing to successfully renovating homes, our tools as well as coaches will give you the help you require. Send us a message and we’ll hope to assist you to start your real estate investment journey!