Getting Started in Real Estate Investing

Are you like me and have both watched and wondered about those real estate infomercials that are on television late at night?. You know the ones I am talking about. No money down and get a house? Get cash back at closing? Spend 15 minutes a week, make $150,000 a year? Because of my financial situation, (or more for fear of what my wife would say), I never bought any of those courses. But I can tell you I have spend the amount that those tv ad programs cost and more on books.

And while I will tell you that books on different aspects of real estate investing have broadened my horizons, no one book ever put it all together for me. I will give some credit for trying. They painted a picture of what should be done (buy off of motivated sellers, people that need to sell, but at a substantial discount as compared to the retail price of a home) but all of them left out the part on “how” to perform such a feat.

If you are just starting out in real estate and have cable, you can’t help having watched those “Flip this house”, “Curb Appeal”, and many other tv shows thinking, “Wow, even if I am just half as good as those folks, I am going to make a killing in real estate.” Then you start thinking, “You know I am vaguely familiar with what a hammer looks like, so why don’t I just quit my job and 6 months down the road, I will be rich. Taking vacations when I want, work when I want. In fact I am going to tell my boss today to take this job…” Well, you know the rest, because we have all had those thoughts at one time or another.

At the end of the day, I wish it were as simple as they make it seem. And sitting here a year later, people look at me like I am some kind of “wunderkind” of sorts. The things that seemed daunting to me when I began to invest are merely an afterthought at this point in time. Funny, how 25 homes will do that do you. My monthly marketing budget is more than some people make. To be sure, it wasn’t always that way.

Looking back over the last 15 months, I want to impart to others who either are in the same situation that I was or just want or need to a change how they are going about the business of real estate investing to become even more successful than I have been. To be clear, I am not here to toot my own horn. I was making good money at the job I had. But I was on the road 50 weeks a year to get it done. I missed important family functions both scheduled and unscheduled. No matter what amount of money you make, at some point, you want a different way of life. I knew I did.

But I would like to have some people after they have finished reading this article say, “Yea, I get it. I understand what he was talking about. This time is different. I am going to be a real estate investor starting….NOW!”

We all have the opportunity to be a real estate investor. But fear usually comes into play at some point for all of us when it comes to real estate investing. After all, the largest expenditure most people make is a home. Making a mistake there can seem catastrophic. Remember that same fearful wife who I took into consideration when contemplating buying some of those tv real estate programs? Well, she comes from a family that by and large needs the security of a regular paycheck coming in, a structured retirement program (she is going to start getting $150 a month next year on her program) and believes that health insurance needs to be partially funded by an employer. In her nicest of ways, she would tell me all of those benefits were too much to give up on to do real estate investing. This is kind of amusing to me because in one deal the profit I made was over 75% of what I earn from my job. And those type of deals aren’t a once in a lifetime experience. (Nor are they weekly either!)

So where do you start if you want to be a real estate investor?

• Be clear about the “why”. I have had several folks having seen my success want to jump on and learn. I don’t have a problem with that. There is enough business for everyone. But the question they have to answer before I take them on is: “Why real estate?” For some real estate investors were the stock day traders of a few years back. They are quick buck specialists. I am not saying you can’t make money quickly here. You can. But you also earn your money as well. So figure out for yourself why you want to do real estate. The answer may surprise you.

• What are your financial goals? People by and large get in this business to make money. I know that. But what type of money do you need currently? If you don’t have any cash, creating wealth isn’t as important to you. Determine where you are currently and where you want to be in six months. You can re-evaluate it then.
  

• How are you going to make money in this business? The above two answers will greatly drive this. This can be a moving target over time. But I would recommend sticking to a certain model until you get comfortable. If you need cash, then flipping or bird-dogging might be for you. If you are interested in additional cash flow, acquiring property might be a way for you to go. Analyze this fully. Do you have the temperament and the expertise to be a landlord (and yes if you have managed these for any period of time, there is an expertise to it)
  

• Review your SWOT (Strength, Weaknesses, Opportunities, Threats) for your approach to the business. Find a partner if necessary to help you through the first few deals. Get educated always. The laws are constantly changing. Join a local real estate investment group.
  

When you have all that done. Write it down on paper and put it into a place you will see it. While a lot of days will be good, you will need to remind yourself WHY you are doing this business on some days.

That’s a good start. Obviously, there is much more to the business than that. But if you get the above done, I have found that you are way ahead of the competition.

John Panico is an active investor of properties throughout NE Georgia. He is the General Manager of Local Guys Equities, LLC, one of the fastest growing real estate investment companies in Georgia. John founded the NE GA Real Estate Buying & Investing Group and wholesales properties to real estate investors around the country. Feel free to contact John about selling your house or other information.