Sometimes, getting started is the hardest part. We’re a distracted and busy people. That busyness can derail the best intentions, delaying and diminishing potential returns. Maybe you’ve been considering investing in real estate for a long time. It’s something you want to do, something you know you should do for your financial future.
You just keep kicking the can down the road.
We’re here to help you finally take those practical steps to start. It’s time to turn those woulds and shoulds into real passive wealth!
7 Steps to Actually Start Investing in Real Estate
Step #1 – Solidify and Align Your Goals
First things first: know what you want. Investing in real estate – or anything for that matter – should be intentional and purposeful. Why this strategy? Why now? What are you trying to build? What results do you want to see? Write down your goals and intentions. If you have a spouse or partner, consult them, too.
You’ll have to balance out your individual ambitions against risk tolerance, assets, and other factors. Get on the same page or settle on a compromise. From there, you can better evaluate strategies and investment opportunities that align with your vision.
Step #2 – Investigate Investment Strategies
Investing in real estate isn’t a one-size-fits-all venture. Depending on the goals you established in step one, the strategy that suits you may differ wildly from the next guy. Educate yourself on your options – the pros and cons, the advantages and disadvantages. Remember, you might find things are different in theory versus practice. It’s okay to dabble in a few strategies before you settle on your primary focus. Just be sure to manage risk accordingly and do your due diligence every step of the way.
Step #3 – Consult a Financial Advisor
Regardless of your results in the first two steps, we recommend consulting with a financial advisor. They can help you see the full scope of your assets, options, and the best courses of action. Their job is to help you make the wisest financial decisions possible – and make the most of your money. They may help reveal risks, options, and opportunities you hadn’t considered.
Additionally, an objective, financially savvy consultant is always welcome to any discussion involving big investment decisions.
Step #4 – Investigate Potential Partners
No matter your investment strategy, you will need other people to help make it happen. It could be as simple as a turnkey company that handles virtually every aspect of your business for you. For others, it could be individual real estate brokers, contractors, and property managers.
Regardless, you must thoroughly vet anyone you want to work with. What’s their reputation? What is the scope of their work? Which options are available to you?
Research and compile a list of potential partners, narrowing them down by asking tough questions and alignment with your goals.
Step #5 – Set Metric Benchmarks
One of the critical elements of a worthwhile goal is specificity. As a potential real estate investor, get used to working with numbers! Based on your goals and discussions with your financial advisor, what numbers do you need to see? How much will an investment property really cost? What are one-time expenses versus ongoing costs?
Determine your KPIs (key performance indicators) and set clear, specific benchmarks for success. Know how you will evaluate investment performance. This will empower you to make better decisions on the front end and allow you to continuously assess and refine your portfolio.
Step #6 – Develop a Budget
What’s your budget? We’re not just referring to what you need to start and sustain your investments. This is about your whole budget. How much should you save each month if you must save up for a property down payment? What’s realistic? Where can your belt afford to tighten? How can you promote financial self-discipline?
Budgets aren’t one-and-down things. They should be revisited and tweaked periodically for new expenses, inflation, and changing financial goals. A solid budget will keep you on track and moving toward your investment objectives.
Step #7 – Craft a Realistic Timeline
Finally, create a timeline. With a method and goals in mind, backed by realistic numbers, you should be able to set a precise start date. But it’s not just about buying that first property. Your timeline should also consider your desired frequency for property acquisitions.
With each of these steps, remember to allow room for adjustments. You may go back and forth a bit, and that’s completely natural! What’s important is that you focus on setting clear, actionable goals. Actively pursue your success with due diligence and a growth mindset.
Start investing with REI Nation, where you invest and we handle the rest!