An adjustment period is almost certainly required for any new undertaking. At the very least, individuals will question their direction. In addition to fear, there is an unbridled passion to see the transition go as smoothly as possible. Real estate investors, in particular, face a number of challenges in starting out. The first six months are crucial. While they are the hardest, they set the foundation for the rest of your career in this industry. You may have the best intentions and the biggest plans, but unless you have an idea of what you want to do and how you want to do it, you will not get very far.
Investing in real estate can take many shapes and forms. The path it takes you on is entirely dependent on the respective investor. You can strike up a conversation with an investor at a coffee shop and their plan may be completely different than what you had heard from another investor. The best way to get around this is to do your own research and come up with your own plan. This will probably change several times in your first year, but when you get started you should pick a path, a niche and focus on it.
One of the most popular ways to get started in real estate is by purchasing a two-family house and living in one side while renting the other. FHA loans will allow you to get into the property with only 3.5% down or 5% if you go the conventional mortgage route. As long as you don’t feel uncomfortable living in one side of the property while your tenant lives in the other this is a good way to get introduced to the business and build equity. Your tenant should cover most or all of your mortgage payment and you can learn the business and receive some of the tax benefits.
If you don’t have the initial down payment to buy on your own, the next best thing to do is to network yourself and find out as much about the business as possible. You can meet wholesalers or other investors who may allow you to get started in the business, make a little money and learn as much as you can. The picture painted by reality TV is not always in line with real life. In real life, you usually have to work your way up the ladder.
If you have developed contacts and just need money, you can develop a pitch for hard money and private investors. You will not make as much as you envision on every deal, but your risk will be dramatically reduced. If you do this enough times, you will start to develop your own funds where you can eventually buy something on your own. Investing in real estate takes time, patience and persistence, but it can be done by anyone.
The first six months can be the hardest in the business, but that doesn’t mean they can’t be approached with a plan. There will be many ups and downs and many changes along the way, but if you have a plan and are willing to stick with it, there is a light at the end of the tunnel.