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This Old House - Do-it-Yourself

The Very First Steps You Should Take To Become a Real Estate Investor

Written by Posted On Monday, 05 June 2017 13:21

Real estate investing seems like something everyone wants to do, but not every has the knowledge to make happen. Real estate investing has the potential to produce the best returns as compared to all other methods of investing, but it’s also a process with a learning curve that requires a good amount of work.

It’s overwhelming to think about where you should begin, but the following outlines some of the very first steps you should take if you’re interested in building a business as a successful real estate investor.

Think About Legal Structure

Before you do anything else, it’s key that you research legal structure and make sure that you’re building a business that is going to protect your personal assets. Investing in real estate offers tremendous opportunities, but also a high level of risk.

You’ll have to consider an LLC for real estate and whether or not that’s the right legal structure to protect your personal assets and your family.

Decide What Type of Investor You’ll Be

To do well in the world of real estate investing, you need to have a strategy, and a big part of your strategy should be knowing the type of investor you’ll be.

There’s the passive investor who is someone that takes a buy and hold strategy. They’re not out constantly looking for deals. Instead, they find a few good deals at the start of their career and stick with them over the long-term.

Then, there’s the active investor. That’s someone who’s constantly looking for hot deals, negotiating and selling homes.

When you’re deciding how you want to approach investing, you’re going to have to think about whether or not you want to be in the trenches, and the level of time you’re willing to commit.

Find Someone Who Knows A Lot

Real estate investing isn’t something you can learn overnight, and while research is involved in being successful, it’s also beneficial to find someone who knows more than you to learn from. This could be another investor that you partner with or maybe a real estate agent who knows the particular area you want to invest in.

You’ll need to target someone you want to work with and be proactive in building a relationship with that person.

You might even need to work as a sort of intern for someone for a while to gain valuable experience. The experience you can get from working with someone who’s a successful investor is going to be the most invaluable thing you can do for yourself as you’re starting out.

Avoid Seminars

As a final note to get you started, cities and towns across the country there are usually real estate investing seminars being held every weekend. Avoid them.

Professional real estate investors often encourage new investors to avoid these seminars no matter what, because ultimately they’re just one big sales pitch that gets expensive quickly and can drain your wallet and leave you with few benefits.  

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