4 Tips To Help Transition Into The World Of Real Estate
By JD Esajian on May 31, 2017
Successful real estate investors come from all walks of life and various professions. Someone with a background in technology has the same chance on a deal as a lifelong real estate agent. One of the great things about real estate is that there is no defined path of success. Every day there are new investors with their own unique story. In many cases investors dabble into the world of real estate while still holding their full-time job. Balancing full time employment while keeping one eye on a growing real estate portfolio has increased in popularity in recent years. How you make the transition goes a long way in defining you and your real estate business. Here are five tips to help transition into the world of real estate.
- Stay In Your Comfort Zone. It takes a lot to be a successful investor. Just because you have had previous success it doesn’t make you a real estate expert. As you are just starting out or looking to transition over to real estate you should stay in your comfort zone. This doesn’t mean you can’t spread your wings down the road but initially it is a good idea to invest with what you are most comfortable. It takes time venturing into a new market or a researching a different property type. What you will find is that things can change drastically from one zip code to the next. If you don’t know what you are doing you can end up with a property you don’t really want. The alternative is sticking with what has worked for as long as you can. If you are comfortable with single family rentals in a certain area keep going with them for as long as possible. Eventually you will want to branch out and try new things but only when you have more time and some experience under your belt.
- Always Be Learning. The real estate investing business is constantly changing and evolving. A piece of information today can be completely different just a few weeks from now. Regardless if you close one deal a year or you want to close one a month you need to stay updated. Part of your daily routine should be spent reading articles, researching properties and gathering as much new real estate data as possible. You may not use this information any time soon but it will help give you a better understanding of the business. In most cases, when a new deal presents itself you need to be able to act quickly. The more education you have the easier it is to make a decision. Even seemingly minor things like watching a real estate program on TV or following your favorite investor on social media can help add to your knowledge base. The number of deals you do shouldn’t influence your quest for constant education.
- Start Conservative. There is no limit to the potential upside of your portfolio. It is not uncommon to hear stories from fellow investors about a home run deal they were recently a part of. However, you very rarely hear about the lemon deals that almost ruined their business. As great as the potential in real estate is there is also the chance of a loss. Losing money on a deal is rare but it does happen from time to time. If you are running a business or working full time you should look for small gains rather than swing for the fences. Small gains may seem boring but they will keep the wheels of your portfolio turning and help you move onto the next deal. On the flip side if you acquire a property that you cannot sell you will be forced to lower the price to a point where eventually you will have to take a loss. Not only does this hurt financially but it will bruise your ego and cause you to second guess everything you do. There is nothing wrong with taking a small profit and moving on until you truly know what you are doing.
- Don’t Ignore Primary Business. The real estate business can be intoxicating the more you are a part of it. Once you close your first deal and get a taste of success there is a tendency to want it more and more. While your first deal can start you on the path of real estate success there is a difference in closing one deal and building a portfolio. You need several deals in your pipeline to truly feel comfortable. As you build to this point you need to keep focused on your primary source of income. Whether you own your own business or are a full-time employee you should never do anything to jeopardize your position. Even if your goal is to eventually shift to a full-time investor you should keep earning a paycheck as long as possible. It can take months to build a strong enough pipeline and total overall business for you to hit the ground running. A property you find today may not generate revenue for serval weeks, if not months. Never ignore your primary business until you have everything firmly in place.
There are many investors who juggle their full-time profession with their real estate passion and have great success. Follow these four tips to help make the transition as seamless as possible.