Hello my name is Rich and I am trying to gather as much information as I can on how to get into real estate investing. I have read a few books but they were very vague and not very helpful. What I could really use is some advice on how to begin, where to start! Can anyone offer me some advice?
This is what I did
Read books, blogs boards, etc
I started looking at mls, craiglist, hud, financial institutions and wholesalers websites.
I went to my loan officer and got pre approved.
Felt comfortable putting a contract in 4 houses. 1k earnest money on each. Got very excited.
My loan officer dropped the ball 1 week before closing. I was able to get 3k back.
Always get approved in more than one place if you need to finance.
After that I got one in my dads name and paid cash for another now I am broke and looking for my third.
How To Get Started
While your question positions itself for a very vague answer, there are several things that you can do to get into the mindset of becoming a Real Estate Investor.
First, look at what you are trying to accomplish. What is it you desire your business to do for you?
My first three years in Real Estate were profitable, yet lacked ultimate direction. Do you want a bigger house, a nicer car, better relationships with your relatives, what?
I remember the first month my company did $100k gross sales. I was totally on cloud 9. Problem was, what I thought was going to make me happy…the big $1MM/yr…wasn’t making me happy.
It didn’t bring love into my life (I was single at the time). It didn’t solve my stress issues (I had panic attacks almost every day). It didn’t improve my relationship with my parents (They lived across the country and I barely had time to talk to them)
So then, what was my solution? I think you have to sit down with a piece of paper and really lay it out. What is it about your current lifestyle that you love…and what is it that you hate?
Real Estate can bring you success however you would like it to. The old saying, Careful what you wish for…applies here.
Here are some of the things I thought would make me happy…that I got…then ‘mostly’ got rid of.
A penthouse in Manhattan
Several $100,000 in the bank
A model girlfriend who was also a doctor
A new Range Rover
A new BMW convertible
13 Rental Properties
2 Rolexes
Flight lessons
Anyway you get the picture. None of these “things” will make you happy. Happiness comes from the inside.
Right now I am sitting in my one-bedroom apartment in Bogota, Colombia. I left Miami on August 1st after a 57 day vacation in Seattle, spending time with my family and especially my nephews. My girlfriend just made me a fantastic dinner and we went for a 20 minute walk afterwards to help digest our food.
I am completely 100% virtual at this point. I receive my postal mail, phone messages and faxes all via email. Stress is now at an absolute minimum in my life. I was telling my girlfriend last night how I used to have eleven offices scattered across four different states…she was in shock. She said, pero tu es tanto tranquilo (she doesn’t speak English)…means…but your are so calm. It’s very hard to believe when you see me now that I used to crack heads and yell all day long.
More “flip, rehab, and rental” volume is not always the answer, at least not in my case it wasn’t.
Cash in the bank, less stress and more peace of mind will carry you a lot further than showing off a new beamer to your neighbors.
Start with the end goal in mind. You want to do X…in X amount of time. When I was really honest with myself I wanted to travel the world, spend time with my family and have a “Free-Forming” schedule. This is what I was planning to do at 65…why not put together a business model that let me do it now?
I know I’ve gone a little deep here for someone that is just getting started.
With all of that said, here are the basics that you can do to get started. These items should not take you much more than a week to put in place.
I want to preface that the following are ACTION items to getting your business started. This comes after you have done all of your mental preparedness, attended seminars until it burns inside from inactivity and read more posts than is really healthy.
Building your foundation and getting ready for business.
Set up for a remote email account to merge all of your emails into one. Up until now your life has been scattered. You have work, hobbies, church, etc. All of this needs to be managed from one source.
Get an 800 Number, transferable later to an assistant. You need to do advertising to grow your business. If you direct all of the advertising to your cell phone, you will be chained to it for an awful long time.
Get a fax number…one that can be received via email. Efax.com and several others will do the trick.
Let’s get you an electronic PO Box. No more paper mail…EVER! Reason being is that with paper mail comes negativity. Negativity distracts you from becoming a successful investor. Do not allow things into your life that create stress for you.
Start to learn about Virtual Assistants and create a task list they will perform. You are not ready for one yet, but write down all of the items that you do on a daily basis so that when it comes time to free up some of your schedule you will have a game plan for your assistant to follow. Start with the mundane tasks that you don’t like doing. Chances are someone else will be great at them.
Choose a domain name for your website. This is probably one of the most important but overlooked aspects of your business. You want to pick a name that already has people looking for it. I chose my domain name because Google tells me 246,000 people are keying in this search term each month. (Look for separate article: Choosing a Domain Name)
Build a website for your business. This is part of your credibility kit. It helps to establish your business when people are searching the internet for a home buyer to help them with their problems. If you have chosen your domain name correctly, they will be directed right into your home page.
Add an email Auto-Responder to your website. Keep sellers and buyers informed. I held the single biggest buyers list in South Florida during the boom. 133,000+. Everyone told me it was foolish to spend time on this. In the end I could flip properties in four hours. An auto-responder allows you to capture emails so that when you decide you are tired of working so hard, you can automate your business and start living a real life.
Get a copy of Real Estate Investing style contact management and follow up software. You have to get organized. Organization will make your life easier. Separate your Real Estate Investing contracts from your Personal Contacts.
Order Business Cards. You are now a Real Estate Investor. It’s important that you tell people. This business card should be a cross between classy and an advertisement. Or, you can have two cards, one for bankers and attorney types, then one for the Investors and sellers. (search for business card post)
There are many other items you can do to get started, but this is a list that worked for our franchises and continues to work for our partners today.
If you have any questions on any of the above task list, please feel free to post them in this thread.
Hope this helps,
Matt Gerchow
Next stop Thailand, Jan. 1st
Week One...Setting up your system, and getting ready for business.Set up for a remote email account to merge all of your emails into one. Get an 800 Number, transferrable later to an assistant. Get a fax number...one that can be received via email. Let's get you an electronic PO Box. No more paper mail...EVER! Start to learn about Virtual Assistants and create a task list they will perform. Choose a domain name for your website. Build a website for your business. Get a copy of Real Estate Investing style contact management software. Add an email Auto-Responder to your website. Keep sellers and buyers informed. Order Business Cards - search my posts for what's important to put on them.</blockquote>That is just about the WORST advice I’ve ever seen directed to a new investor. Of all the things a person could do to start a business, the tasks on this list (other than business cards and maybe getting a fax number) should be numbered starting at 1001!!! They are so low on the priority list that they aren’t even in sight.
After learning the basics, then actually looking at houses for sale would be 1,000 times more helpful than adding an e-mail auto-responder to a website!!! Are you in the real estate business or in the information sales business (I’m guessing the latter)? A few days ago, you didn’t know how to calculate Cap Rate and now you offer advice like this! Give me a break. First on my list for you Matt would be to at least learn the basic definitions associated the real estate business - I’d suggest starting with Cap Rate!
Mike
Mike,
Matt will have to re-calibrate his Forum Auto-Post Responder to include the right definitions next time!
There was nothing in that post relating to educating yourself about your local market or really taking legitimate actions to get started. I will agree about reading as many posts as you can, but that burning sensation from attending too many seminars…may need to get a doctor involved for that one.
Early on, you need to focus on learning everything you can about the area of REI you are choosing to start with. I chose a buy & hold strategy with rentals for the long term. I don’t need a website, 800 number, virtual assistant, or anything like that to start out doing rentals. I can use my cell phone for people to contact me and I can advertise in my local newspaper. To get started, I needed to focus more on basic landlording techniques, how to find a deal for my first property, educate myself on my state’s landlord/tenant laws, and compiling the required paperwork to begin operations.
Looks like the mud slingers are back at it again…I love my haters!!!
Even you 1-Minute ( how’d you earn that name?..lol )
I did not see any information from either response as to what they would do step-by-step to get started.
Only theory. This is the problem with most of the “critics” these days. They talk only theory so no one can hold them to their word.
Without a foundation, when the business starts you will fail. Digging your foundation deep will allow you to weather the hurricane of business that is waiting for you.
Please provide for our newbie here YOUR suggested plan of attack other than…learn your market. It’s advice like this that keeps people on forums instead of out in the streets making things happen.
Is it just possible that I may know something that you don’t. I held the single biggest buyers list in South Florida during the boom. 133,000+. Everyone (like you) told me it was foolish to spend time on this. In the end I could and still do flip properties in four hours. An auto-responder allows you to capture emails so that when you decide you are tired of working so hard, you can automate your business and start living a real life.
People will choose who they listen to for themselves. Mudslinging isn’t working in the current Presidential Campaign…it probably won’t work here either.
One day I may even help you automate your business so you can join me and my girlfriend on the beaches and have a REAL life.
Hmm…probably not. I kind of like you as one of my haters…keeps me on my toes.
“No one ever erected a statue to a critic”
Matt Gerchow
An electronic PO box? Never heard of such a thing. How does it work?
Welcome, Rich. I am new to this too, but let me share with you what I’ve been doing so far or plan to do in preparation:
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Evaluate cash and credit situation. Start saving as much money as possible if you haven’t already. Check your credit, and if it’s not “Excellent”, then take the appropriate measures to get it there. I even went so far this week as to order Quicken so that I can really grab hold of my personal cashflow (got the Home & Business version so that I can use it once I form an LLC too) and understand EXACTLY how I stand today and set a strict budget.
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Set specific goals for where I want to be personally and financially a year from now and 5-10 years from now.
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READ READ READ. I’ve read a TON of useful info on this board. If you search, you will find a lot of recommendations for good books as well. I personally have a 45 minute commute each way to work, so I have been starting to listen to audio books (Rich Dad Poor Dad, As a Man Thinketh, Think and Grow Rich, etc) during the trip.
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Attend a local REI club meeting. I’ve attended one so far and really need to push myself to get to more.
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Start forming a team… find realtors, mortgage brokers, etc. who will be able to help you find and complete deals.
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Find and close a great deal!
As a disclaimer, I have just started this process, but this is a rough layout for how I plan to get started. Hope this helps!
Greg
Most people have never heard of them, don’t feel bad.
In business you have something known as your Corporate IQ or Business Intelligence. Management of new technologies is a critical factor in achieving market competitiveness and increasing your ability to handle additional workload without additional time constraint.
Earth Class Mail offers PO Boxes in several cities around the country. Currently I have mine located in Downtown Seattle because I am able to ship presents, souvenirs, non-seasonal clothing and books for when I arrive to town to visit my family.
My girlfriend and I will be in Seattle for two weeks around Christmas on our way to our new condo in Pattaya, Thailand. I will be able to pick up any stateside packages at that time.
To retrieve your scanned mail, you simply login and decide which items you would like to scan. I can’t tell you how fun it is to return all of the mail that I simply don’t want. Junk mail is a thing of the past. With one click you can shred, scan or return to sender.
A mail box with ECM runs $30/mo, about the same as a Mail Box Etc. / UPS Store box, MUCH less when you factor in the time to retrieve the mail.
Google Earth Class Mail for more information or to get an account.
Hope this Helps,
Matt Gerchow
Matt - I believe you are missing the point… In your own post you justified Mike’s and Justin’s position - You said so yourself “…when you decide you are tired of working so hard, you can automate your business…” I agree with this statement 100%. But this should happen only after you get tired of working so hard. This is hardly something a newbie should focus out of the gate.
And to answer your comment about being specific, here is my take:
1 - read all the posts here - you will learn a lot
2 - join your local REIA and go to the meetings. Arrive early and stay late. Join the subgroups and go to the meetings. Talk with people. In the beginning don’t feel you have to know what to say or what you want… Just introduce yourself and ask what the other person does. Ask questions - for example two nights ago I went to a networking meeting with my local club. I met a guy that does lease to own. He has done 50 deals within the past 5 years. I just asked questions about his approach. Because I am reading this forum on a regular basis I was able to ask some questions - for example there is a recent thread discussing if the option fee gives equitable interest to the tenant/buyer. I asked this guy what were his thoughts. If he ever had a problem with someone suing him asking for the money back if the option was not exercised… Basically you don’t need to be an expert to talk with those folks. You just need to listen and ask questions.
3 - define your goals - 1 paragraph or 1 sentence stating what you want to accomplish - doesn’t need to be perfect. You can always adjust it tomorrow, or next week, or next year… you get the point. And to be even more specific - my goal is to be able to quit my current job and work in my real estate business full time. I want to replace my current income ($###) with passive income from rentals. At this point I did not capture in my goals a target for wealth accumulation. They don’t seem to be as important as the ability to replace my job income with rental income. I am sure that at some point I will want to set a target for wealth accumulation. I will include that in my goals when I feel the need.
4 - build your business plan to help you achieve your goal. Google “real estate investing business plan” or “real estate business plan”. You will find several business plans. Read as many as you want until you feel you get them. You will find that you can grab what you like from each one of them. If there is one that you particularly like, use it as a starting point and change it to meet your needs. If you can’t find one that appeals you, go to the small business administration website (www.sba.gov). Click on the tab at the top of the page that says “Small Business Planner”. This session of the website has a ton of good information that will help you build, manage, and grow your business. It is a very interesting reading. Under column “1”, click on the link that says “Write a Business Plan”. This will get you to a detailed, step-by-step explanation on how to write your plan. Again, it doesn’t need to be perfect. Write what comes to your mind in each section. If there is a section that you don’t know how to approach, write TBD and move on. Another option, go to your local library and search for books on business plans. In my case I want to work with rentals - so I bought Propertymanager’s book. He included his business plan there. I used it as my starting point and changed it to where I felt comfortable. Since I wrote my first plan few weeks ago, I changed it twice. Overall I believe I am changing it on a monthly basis.
5 - go learn your market - in the end of the day I believe most investors want to buy investment properties. Choose an area close to where you live or work. I would start with an area of 9 or 12 blocks. Go drive by the area and find agents that are listing a lot of properties in the area. Call them and explain that you are planning to invest in that area and that you would like to go see some properties. Be truthfull when they ask if you are ready to buy. If you are, tell them you will buy if you find what you want. If you are not, simply tell them that you first want to get a feel for the area. Some agents will not want to work with you. If they say no, ask if they know any other agent that would be willing to do that. Keep calling agents and eventually you will find one that is hungry enough or that feels you have potential that will be willing to show you some properties in the area. Call the FSBO’s in the area and go see the properties. Go to open houses Saturdays and Sundays. Some people say you have to see 100 houses to get a feel for the neighborhood. My take is that after you have seen 10 or 15 houses you start to have a feel. The more properties you see the more you will learn about the area. By the way - don’t forget to buy that agent lunch or do something nice to him like bring coffee, cold water, or candy. Tell him that you appreciate his willingness to spend time with you.
I hope this is specific enough. One disclaimer - I completed the above 5 steps recently. It took me almost 3 months. I am now working on my 6th step - I wonder if you can guess what is my 6th step… :O)
Set up for a remote email account to merge all of your emails into one.
Just kidding… :O) (Matt - I am sorry. I could not resist. Don’t get mad at me…)
My 6th step is to create a criteria to analyze properties… So I will be able to decide on a case by case basis if a property is worth pursuing and how much am I willing to pay for it…
I hope this helps.
Matt - here is where I believe you fail in giving people advice. I am not saying you don’t have the experience or the knowledge or good intentions… But sometimes you do seem like disconnected from reality. You need this service because you travel all the time. Most people here don’t need it - we stay put. Why would someone spend $30 per month + the cost of them shipping whatever mail you need to receive physically (for example, when you receive checks you either will need them to ship those checks to you or to your bank).
So to give anyone advice that one of the first things they need to do to start investing in real estate is to open an “electronic PO Box” is not good advice…
And to the poster who asked about electronic PO Box… This service has been around for a long time - they are called “mail forwarding”. Sometimes people come up with new names to look sophisticated. If you google “mail forwarding services” you will find all the “electronic PO Box” services… :O) The new trend on that business is to scan the mail you receive so you can review them online. You decide the ones you want to receive physically and the ones they can destroy. Pretty neat - but only if you travel a lot.
Great post J1Dias,
You are correct in that my advice is for those that want to live a ‘live anywhere’ lifestyle with a Free-Forming schedule…while they are still young. I do realize this is not for everyone.
Perhaps there is a disconnect. My brother for instance has no aspirations to travel the world. I might be making an assumption that people want to life the lifestyle that I have.
Among most men, this is a really taboo subject because the thought has never even entered their mind.
For those that do want it…I’m waiting for you…let’s get to it.
I have done all of the steps you recommended as well. They are great steps and people should consider doing those as well.
Fact is, I’ve done the dirty work and want to help people shorten their startup time to weeks instead of years. My franchises never joined a REIA, but they sold properties to all of their members, I taught them how. They never read forums, but they made $10-$15k on average their first month. All but one franchise recouped their franchise fee in the first three months.
Great post though,
Matt Gerchow
Do you really think I’ve never heard of mail forwarding? Come on… I was talking about the scanning service.
Matt,
I have read a lot of your post and looked over some of the stuff you market.
You have some interesting ideas and you are an entrepreneur from
what I see.
My question is are you a fan of Dan Kennedy at all?
What about Mark Evans?
They have the same train of thought as you as how to run their business
on remote and have more time to do what they want to do and I wondered if
you have worked with either of them.
I know Dan likes horse racing and Mark and his girlfriend like to travel the world.
Me I have traveled all over the world the last 25 years and have slowed down
a bit, but I still try to take at least 6 full weeks a year and go some where far away.
I don’t hardly ever answer the phone anymore and like Dan’s idea of only accepting
faxes. I mostly do buy and hold, and some foreclosure and flips and I used to market Real Estate education myself but have really given most of it up a month or so ago. I still have to take down a lot of websites or sell them to someone who wants them as 98% of the folks who want to become a successful investor will never do what it takes anyway to make it happen from what I see.
On another note, I get so tired of going anywhere, and all I see is people on the cell phone or texting, while they are driving, eating, walking the dog, heck some folks I have heard stop having sex to answer the phone. No Body is that Important!
Any sorry to rant a bit but, What is your take on all this?
Welcome Rich. Here are some things I’ve learned. These things can be done simultaneously.
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Work your butt off to save as much money as you can. Fdjake has a great post for newbies that basically recommends saving 10% of your gross income each week for 1 year.This will demonstrate the discipline you’ll need.
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Work to get your credit score above 700.
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Get control of your own personal finances. That means proper debt & income management. Your future business depends on it.
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Go to ebay and purchase the most current Carleton Sheets course. The ones withthe DVD’s are pretty current. Be sure to get the “toolkit” CD. It has many forms and management software that you can download on your PC and edit the forms and print them out. The course is about $60. Thats a great price for what you get. It even has goal setting and " roadmap" to get started.
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Here are some very good books that are very helpful.
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“The Millionare Real Estate Investor” by Gary Keller.
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" 1 Minute to Rental Property Riches" by Mike Rossi (aka Propertymanager).
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“The ABC’s of Real Estate Investing” by Ken McElroy.
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“The Millionare Next Door”.
Read through the previous posts and ask questions on this site. Also join you local REI club or Landlord association and hang out with the VETERANS that are where you want to be. Ask questions and learn what you can from them.
This should get you started anyway. Good luck.
Gigo - my point exactly. Everybody has heard of mail forwarding service. You would not have asked the question “what is electronic PO Box?” if Matt had used the more common name “mail forwarding”.
In my mind it would be the same as if I start talking about “cyber accounts”. These days in order to be successful you need to have a “cyber account”. :O) And then someone will ask me what is a “cyber account”? And then I will explain it is a bank account that you can access from home through the internet… :O) duh!!! I am only giving a new/fancier name to a bank account… :O) In the past banks did not have Internet access… Nowadays they do.
In the past mail forwarding services did not scan your mail. Now they do. Same difference… :O)
And by the way - if you google “electronic PO Box” you will find 408 hits and none of the ones in the first page would help you. If you google “mail forwarding” you will find 2,120,000 hits and all of them in the first page will point you to companies offering the service (including the mail scanning…). you get my point…
Have you tried googling Matt Gerchow? You will find some interesting homo erotic pictures and a ton of marketing for his real estate products. I wonder if he was living in his Manhattan penthouse while working at www.petplace.com ?
But we should all be impressed by his giving up all of his earthly posessions to travel to third world countries. When he starts posting from Monaco and Kaui I might be impressed. Until then he will just be another internet snake oil salesman.
Yes.Like Tony Robbins, Find someone that are doing what you seek.
Interesting thread…