The Minnesota Home Brothers have put together 5 tips to help the first time real estate investor make their first investment! All based on real life experiences!
Tip #1: Do your own research
Do your own research. Don’t rely on agents or real estate professionals to provide you with everything you need to know. Ask questions, and take in as much information as possible. From the minute you decide you want to invest, and throughout your entire investing journey, continue learning and researching. Learn the areas, trends, property specifics and any other information you can get your hands on.
Educate yourself continuously and surround yourself with like-minded individuals who share a common goal. Find people who are doing similar things and share experiences and stories. Find a mentor and learn as much as you can from people who have been there before. Learn from the professionals and share stories.
Tip #2: Don’t get stuck in a analysis paralysis state of mind
Many first time investors never actually make it to their first investment property purchase. You can’t let fear of the unknown stop you from investing. Run your numbers, ask other real estate professionals for their opinions and by that I don’t mean asking your mom or friend who just got his real estate license and now thinks he knows the game inside and out. Ask someone that has been around the game for awhile and has purchased dozens of houses. I know what your thinking now… ‘Well I don’t know any investors…’ THAT’S A LAME ASS EXCUSE !!! Its 2020 for Pete sakes! Your already on the biggest networking community in the world (THE INTERNET). I suggest going onto BiggerPockets and you can ask any question to 10’s of thousands of investors that truly enjoy helping people get started in the real estate game. Heck some may even wanna talk to you over some coffee. Don’t be scared to make new friends. After all networking is one of the biggest factors to being successful in real estate.
Tip #3: Know your options
There are many options when it comes to starting your real estate portfolio. You don’t have to stick to single and multi family rentals. You could consider leasing a commercial property to local businesses, renting land to people to use recreationally, or even think about investing in mobile homes. Many people make a lot of money by pursuing investments that are off the beaten path. You can also look into REIT’s, or other investment groups. You will have to be able to pull your weight, but working with experienced investors is an excellent way to learn the ropes.
Tip #4: Make sure it’s right for you
First make sure that this is a path that you want to take. These are BIG financial decisions. Make sure this isn’t just another one of your weekly fabs. Keep educating yourself for a few months and if you still have interest in real estate then it will be time to start making some moves. I know what real estate investing did for my brothers and I and I also know what it can do for you too.
Tip #5: Calculate your margins
Make sure you are accurately calculating your profit margins and cash flow. The 50% rule states that about 50% of your profits will go towards house expenses… other than your mortgage. Set realistic expectations and goals so you can see great returns as a first time real estate investor!