I know now you are starting out. You have the mindset you need and are ready to take the first physical action.
What action should that be?
You need to start meeting people, networking. A great way to do this is through your local landlord association. Finding one is as simple as typing “landlord association [your state]” into your favorite search engine. Find the non-profit association that best represents landlords interested in the same type of investment you are. Some states will be big enough to have the option, such as multifamily, some will not.
This is going to take some money up front. The first time you have to put up some money will seem to make this thing real. All the worries will come in; after all, you are spending money but no money is coming in! Unfortunately, that is the way of any business. The restaurateur needs to find a space to cook and serve, needs to purchase utensils, advertise…all before the first customer comes in. That could amount to hundreds of thousands of dollars. Lucky for you, your up-front cost is much smaller. Now, pay the fee to join that association. In my state it is $100 per year. Small potatoes for you.
Now, the hard part. Go to the meetings. This is a difficult one for me. It takes a lot of time to get to the meeting and back and disrupts the day. The reason for this is to educate yourself and to network. Meeting people is hard for me but hopefully easier for you. I started by going into the meetings without any sort of expectation. I explained to people that I was just starting out. By that time, I had purchased a property but you might not have one. Tell them that. In my experience, the greener you are, the more time people will give you for advice. These meetings will give you many benefits.
1. Deals: There won’t be much immediate benefit from these interactions but you will be telling these fellow landlords exactly the properties for which you are looking. They may be interested in selling a property or know someone who is. At this point, I should warn you that unscrupulous people exist, who may want to take advantage of a newbie like yourself. In my experience, people who take the time to go to those meetings are honest and want to help, however. You will perform due diligence on any property offered just like you would for any other property you find. This kind of networking just increases your exposure to deals.
2. Find Professionals: Another important reason to go to these meetings is to inquire about professionals you can use in your business. We will talk about individual professionals more in future posts, but for example, you may ask if they know a good real estate lawyer. They will be happy to give you the one they use and like.
3. Learning: The association meetings often center around a 1-hour topic such as tenant screening or inspections. These are great ways to learn more about becoming a property owner.
All this, for a low, low cost. It’s a no-brainer and a great way for you to take the first tangible step to being an investor. Some associations even keep a list of professionals from which you can choose. Word-of-mouth is better; some lists require payment rather than quality to be listed.
Now’s the time, warm up the search engine and get started!