Getting started is one of the most difficult parts of real estate investing. Having some cash up front puts you a long way ahead of most people with a real estate dream. Have you ever talked with someone about your real estate interests only to have them tell you their story about how they lost a bunch of money on their first and only real estate investment and would never do that again? They further advise you with their wealth of experience to not even get started. What a bummer.
That first experience is so important in real estate investing. It takes a lot of time and effort and those are possibly bigger investments than the cash. Make sure you set yourself up right to put yourself in the best position to succeed.
How Liquid is Your Cash?
Where is that $100k right now? Is it in a house you inherited? Cash in the bank? An annuity? Determine how much cash you actually have to use. Sometimes taxes and sale fees will cut into this significantly. Others receive a windfall and want to set aside some for a vacation or other purchase. Consider your needs and do the research to determine what you can actually spend.
Once you have the cash, put it in a safe bank account that won’t get spent until you are ready to invest.
Determine What Type of Investing You Want to Do
This is the next most important part – education. It is very important you take the time to learn about investing niches and determine which is right for you. Getting started in the wrong area makes it more likely you’ll have a bad experience. The best way to do this is to read a lot of books and blogs.
Consider Paying for Knowledge
This one is controversial. There are a lot of swindlers out there who will happily take multiple thousands to teach you about their particular area. If you do plan to pay for coaching or conferences, budget no more than $10,000. The right one can be a game changer for you and launch you into investing the right way. The wrong one can drain your money without any benefit. Get referrals from other investors you trust.
Make Your Dream Reality
The biggest thing that stops people is the fear of losing the money. Start small so you have less of this fear. Realize that it is very unlikely to ‘lose it all’ in real estate if you take the right steps and be prepared – such as getting the right insurance and remembering to pay your taxes. It’s a lot of work but gets a whole lot easier after taking that first step.
If you want a deeper dive in how to get started, take a look at this post I did on getting started with some money. Good luck realizing your dream!
