A Comprehensive Guide for Beginners
Great job! You’ve realized that the current real estate market offers incredible investment opportunities. However, you may feel overwhelmed by the complexity and perceived risks involved, which prevents you from taking that first step. It’s common for new real estate investors to get stuck or head in the wrong direction. So, how can you steer clear of these mistakes and risks as a beginner in real estate investing? Learn how to get started on real estate investing with this simple guide.
What Should You Do First?
What should you do first? They make “fixing and flipping” look so easy and profitable on TV, so why not fix and flip a house?
Some guru’s say just take over someone’s payments and do “subject-to” deals. Other guru’s say invest in tax liens, lease options, use hard money lenders, or just buy houses with cash and rent them out.
What about wholesaling? Why do gurus make it so complicated now? New wholesaling terminology comes out every couple weeks. It’s flipping houses, flipping contracts, virtual wholesaling, front flip, back flip, sideways flip, and so on.
I just have to laugh at all the hocus pocus. Wholesaling is…well, just that. Buy low, sell higher. No matter what you call it, that’s what it is. Done the right way, it’s simple, easy, and very low risk.
It Doesn’t Have to Be Complicated – Start with Wholesaling
The good news is that investing in today’s market is very forgiving if you apply some simple concepts and follow some simple steps to minimize your risk. Instead of starting with complicated transactions that are speculative and risky, why not start creating income by wholesaling houses?
When you wholesale houses, you learn to buy houses directly from sellers, without needing a bank and without needing an agent or broker. You learn to control real estate without owning it. By controlling it, you gain equitable interest, and you can assign or sell your interest to another real estate investor.
You learn about contracts and about the settlement process, without the risk of attempting a complicated transaction. Wholesaling teaches rookie real estate investors to do some deals, create income, and learn about real estate investing without risk. It’s not complicated when you follow the right roadmap.
Add “Buy and Hold” for Cash Flow and Long-Term Wealth
After you learn to do some wholesale deals and enjoy your success, you will gain the confidence that will lead you to wanting to buy and hold. That is the key to long-term wealth and residual cash flow streams.
The key to buy and hold with minimal risk is buying the right house at the right price without needing a bank and becoming a great property manager.
Your wholesaling transactions will teach you to buy houses directly from the seller with the big discounts that minimize your risk. Once you begin to buy and hold without banks, you can create excellent cash flow while building your net-worth with a portfolio of rentals.
Fix and Flip – For Experience Investors Only
Along the way, you may want to venture into the fix and flip arena. Trust me, this is the riskiest form of short-term investing, and there are a lot of moving parts.
You have to buy the right house, at the right price, get the renovations done, and resell the house for a quick profit. The good news is that this is working great in most markets right now, but you need to follow specific steps to make it work well.
You Need a Roadmap
If you were driving from Boston to San Francisco, you would not venture out without a roadmap and a specific plan. The same is true of your real estate investing plans. Don’t jump in blindly and get off to a bad start. Choose your investments and strategies wisely, create a specific step-by-step plan, then execute it while minimizing risk and maximizing your profit.
