I often get calls from new members at MAREI asking me . . “Where should I start?”
That’s a hard thing to say as I have no idea where the person is at in the business. So rather than where should you start, let’s talk about what you should know.
First you need to know how to spot a good deal. I don’t know how many times I have told a new investor that if they bring me a good deal, we can help them put the deal together where they can get it under contract and then assign the contract to me for a fee. Sounds GREAT right?
But 9 1/2 Times out of 10, I get leads brought to me that just will not work, they just are not a deal. So spend some time learning how to determine what is a deal. I would suggest as a friend and investor said, go look at 100 houses and analyze them to see if they are in fact a deal.
You need to know about comparables, repairs, daisy chains, exit strategies, location and even “gut” feel.
Once you know what a good deal is, then you need to spend some time finding a good deal and how do you find the best deals . . . you DON’T ! Instead of hunting down good deals, you want to take steps to get the good deals to find you. There are many different ways, personally I like to use Craigslist, send Direct Mail Marketing, using SEO and my website, signage and word of mouth.
Then next biggest thing I see new investors struggling with is how to get paid. Usually you buy the house and then you sell it for more money or you rent it out for income. But what if you are wholesaling or using creative techniques? How do you get paid? An did you know that unless you are a licensed Realtor and that “Referral Fee” is going through your Broker, then that “Referral Fee” is ILLEGAL?
So you need to know and understand options, assignments and double closings. There are other fancier things you can do, but I like to stick to the basics.
Then next big question is what should I do? Should I wholesale, rehab, be a landlord, do apartments, lease options, subject to . . . ? My answer is yes, you probably should learn a little bit about all of them. The internet can offer you a great broad overview on a bunch of different strategies so you can pick the niche that will best fit your resources and goals.
However, I do say that all new investors should master the strategy of wholesaling. Why? Because all the techniques used in wholesaling can be utilized in all the other niches. You have to find the deal, then put it together and then sell it to make money. All strategies are the same with just a little bit of modification.
So, if you can master the techniques needed in wholesaling, then you can transfer them to just about any other kind of real estate investing.
The last thing you need to do is to come up with some sort of action plan. Some people say a business plan but I am thinking more along the lines of what you need to do to get the phone ringing, get you talking to sellers and to buyers and getting you to your first deal.
So that’s it in a nutshell, the 5 things you need to do as a new investor. Sounds easy, RIGHT?
Maybe, NOT SO MUCH?
Well I do have some resources for you . . .
- The MAREI Member Library – go to www.MAREIMember.com, log in and dig into the library.
- The MAREI Facebook Group: click here to find a great place to ask questions
- Go to the MAREI Meetings and Training Events – you will learn way more than your money’s worth
- Amazon.com – there are lots and lots of books under $20