So this is a little overdue. Something that I should have started a long time ago. You know those people that immediately document their journey when they begin something new. Yeah, well I forgot to do that, so here is me trying to catch up.
Real estate investing, for the most part, it’s intriguing to most people. I find that most people would be interested in getting into real estate investing, however, the first thing everyone thinks is that you need a ton of money to get started. I don’t blame people for thinking that, I mean, you’re dealing with properties that cost hundreds of thousands of dollars. It’s easy to assume there’s no way for the average person to step foot into the “real estate investing game” without first saving up an arm and a leg or two or three.
The point here is that real estate costs a lot of money so obviously, it costs a lot of money to even play this real-life game of monopoly.
If you agree then we’re on the same page, you, as most people do, have the same idea of what it takes to get started and invest in real estate. If you don’t agree, then you’re not who I’m speaking to. You and I know both know what I previously alluded to is not exactly true.
How Do I Start Investing In Real Estate?
Okay, so if you don’t really need a bunch of money to get started in real estate investing then how do you even start?
Well, that’s exactly what I’m going to talk about. Obviously, my journey specifically and how I actually stumbled across real estate almost by accident.
My journey dates back almost 3 years ago. It all started when, out of curiosity, I was browsing through Youtube looking for videos on “how to start fix and flipping”. At the time I was of the mindset that, in order to make money in real estate I first had to start with money myself. So when I was doing these Google and Youtube searches I was looking for ways to start for free or with a little amount of cash.
This search for how to start investing in real estate led me down a rabbit hole that I couldn’t escape. It was okay because I didn’t want to leave this real estate investing spiral. I was obsessed. I wanted to learn anything and everything I could about real estate investing and real estate as a whole. Even until this day, I am on a constant search for more knowledge.
What I initially learned is that no, you didn’t need a ton of money to get started. There were ways to start investing without even using your own cash! It sounds crazy, but that is literally how the entire world of real estate practically works!
Leverage Other People’s Money
If you’re a seasoned real estate professional you will already know this, but for those of you barely dipping your toes into the real estate investing waters, did you know that real estate investors leverage other people’s money?
What that means is, that they are borrowing money to essentially make money. Now, there are some real estate investors that will use their own cash when they buy properties. However, for those that are looking to do volume and not tie up their own cash, they will borrow money from a third-party source.
Typically, these money sources will be private money or hard money. Essentially, these are loans. If you are not a real estate investor you may be familiar with the loan you took out when you bought your first home. You borrowed money from a financial institution because you weren’t about to drop a hundred plus thousand dollars out of pocket to purchase a property right?
Well, the same concept applies to real estate investors. We as real estate investors need leverage! The good thing about the type of loans we use to purchase properties, typically don’t need to go through the rigorous approval process of a traditional mortgage.
Now the difference between hard and private loans is in the name. Hard money is a bit more institutional and there is stricter underwriting, however less than a traditional loan. Private money is money you borrow from someone you have built a relationship with. This could be a family member or a close family friend. These loans are a little more lenient than hard money, but at the end of the day both loan types act “same as cash”.
How I Started To Invest In Real Estate
So after learning about what I just mentioned, I not only continued my journey learning all I could about real estate investing. Meaning, the different types of strategies (there are many), ways to generate leads, how to truly build a real estate business. I also began developing relationships. Real estate is a business built on relationships. So if there’s anything you take from this, remember that.
Now, I must say, I’m naturally an introvert. I really don’t need interaction with people on a regular basis because I’m okay being on my own. So to be involved in and really get into the real estate investment world, I know I had to get out of my “shell”.
This meant attending real estate networking events, events on business and entrepreneurship, and anything I could to get acquainted with other individuals actively doing what I wanted to do. Now, don’t get me wrong, while I may be an introvert I am also really good at making one on one connections with people.
I rather make connections based on quality versus quantity.
So throughout my journey of learning how to invest in real estate, I was also developing relationships that will get me a step closer to where I wanted to be. The group of people that I would begin to associate myself with all were people involved in real estate or some form of entrepreneurship.
How Do You Find A Real Estate Investment?
So, if you’re following along this far you’re probably like ok “learn strategies, build relationships…but how do you FIND investment properties?”
Good question! Well, this topic alone can be an entire blog post in itself but I’ll try to give you a taste of that topic.
Finding properties to invest in comes down to marketing, plain and simple. Like any business, and yes you can turn your real estate investment hobby into an actual business. As I was saying, like any business, in order to thrive you need to learn how to generate leads through a form of marketing.
The type of marketing you do will vary depending on what you’re comfortable with. You may go straight for online marketing, meaning Google and Facebook advertisements, cold calling, sending mail, etc.
Aside from generating leads, you have to be able to solve problems! This is why it’s important to study as many real estate strategies as you can so that you can provide solutions for the situations you come across.
I learned quickly that many of the houses that real estate investors come across have a homeowner that is in need of some kind of assistance. Whether they are facing a foreclosure, recently inherited a property, went through a divorce. They need assistance for the situation they are in. So we have to be real estate experts and provide multiple solutions for these homeowners.
So yes, many times the way we are able to acquire properties that make sense as a real estate investment is to solve problems and provide value and in exchange, we can take a headache property off of someone’s hands.
If you’re interested to learn more about my real estate investment company, hop over to the Millennial Home Solutions home page.