5 Tips to Help Start Your Real Estate Investing Journey
If you're just getting started in real estate investing, here are 5 tips that I learned from Robert Kiyosaki.
So, you’ve been successfully convinced to start real estate investing. Congratulations! You are now on your way to a lifetime of passive income and potentially even early retirement. However, the process can sometimes seem overwhelming. You probably have a lot of questions and may be unsure of where to start.
That’s okay! One of the most important things to know about real estate investing- and life in general, for that matter- is that you will always be learning. You are bound to make mistakes, and that is okay. What you need to make sure you are doing is constantly learning from your mistakes and applying your teachings to the future.
However, just because you are likely to make a mistake, that doesn’t mean you have to go in blind. Here are five tips from Robert Kiyosaki to can help you navigate the beginning of your real estate journey.
Table of Contents
1. You must decide to become an investor
While this might seem obvious, having a strong intention and a concrete goal of what you want to do will help you tremendously as you get started. Decide your goals precisely: what are you looking for? Passive income? Early retirement? Both? Are you looking to quit your job and invest in real estate full time? At what age do you hope to retire?
Once you’ve asked and answered these questions, you will find it’ll be a lot easier to decide where to start. Now that you’ve decided, the next step is…..
2. Start small
It might be tempting to look at enormous, multi-family properties or lucrative, expensive houses, but realistically, you will need to start your investing small. That doesn’t mean that you have to purchase a teardown- it just means start realistically within you means.
Look for properties that you know you will be able to pay off after purchasing. Have a reasonable idea of your finances and know the approximate amount you will want to use a down payment and for your other overhead costs. If you buy a property that is out of your price range, make sure it is something you will easily be able to start renting out to quickly start making passive income, meaning you’ll be able to pay off your loans faster.
And when I say start small, I mean one property small- consider your first property your “test run”. Once you’ve tested the waters with a single property (and started receiving that positive cash flow) , then you can look to purchasing a second property and growing your revenue.
3. Don’t look for something you want to live in
When looking for a house, it will be tempting to act like you are purchasing a house for yourself. However, you must constantly remind yourself that you are not- you are looking for a house that someone else will rent. Instead of looking for something you can see yourself living in for the next 20 years, look for something you know you will be able to successfully rent for 20 years. Bringing us to our next point….
4. Fall in love with the deal, not the property
A mantra you must hammer into your mind if you are going to be successful in real estate is the following- never let emotions come cloud your judgment of a rental property. Hate the color of the house? Don’t like the size of the kitchen, or the fact that there’s only a shower and no bathtub in the bathroom? That’s okay. You aren’t the one living there. Don’t let your personal preferences get in the way of a lucrative deal.
Of course, you want to make sure your rental is comfortable, clean, and an attractive place to live- otherwise no one will want to rent out your property! However, it does not need to meet your specific qualifications of what you are looking for in a personal residence.
Another thing to remember is that your tenants are buying, not renting- meaning it most likely won’t need to meet all of their specific wants either, which is also okay. When they want their dream house, they will buy it. Renting is just a stepping stone.
5. Ask the seller for financing if you need it
The last piece of advice we are going to talk about is kind of a strange one. Have you found a fantastic deal on a fantastic property, but don’t have enough for a down payment? There are a few ways you can come up with the money, but something most people don’t think of is that you can actually ask the sellers if they will loan you the down payment to buy their house!
While many sellers will say no, they need the money immediately, you would be surprised at how many sellers are open to this type of agreement. In order to make it more lucrative for them, offer a higher interest rate than what they would be getting by simply putting that money in the bank- now you both have a successful investment in the works!
Now that we’ve discussed a few helpful tips on how to begin your real estate investment journey, it’s time to put these tips into practice! So, what to do first? Remember- you must actively decide to become an investor!
Write down your specific goals, and go from there. Look for one property you would like to purchase (remember, you’re starting small). Find a property you want to rent, not live in yourself- then decide if the deal is a good one. Once you’ve completed these steps, you’ll find that the path to your successful investment venture will be a lot smoother. Check out part 2 of our article to learn about how to continue your journey once you’ve purchased a property!
Charles is the founder of infoSpike.com. He enjoys real estate investing, marketing, and personal finance. Read more about Charles here.