In our latest podcast, we talk about how to begin your real estate investment journey by “shifting your mindset to the investor mindset.” If you’re someone who’s looking to get into real estate investing, but not quite sure how, or where to start, then you should keep on reading!
Nonetheless, you’re not alone. There are many others out there who are in the same boat as you are. However, as long as you’re still in the boat, then you still have the opportunity to become a successful real estate investor…but you must shift your mindset and begin to think like an investor.
The Foundation to Getting Started
Establish your goal
First things first, set a goal for yourself! You want to start investing in real estate, but do you have a goal? A plan? Why do you want to buy an investment property? Are you looking to gain additional cash flow? If so, how much? What’s your timeframe for accomplishing these goals? These are all questions that you need to be able to answer before diving into real estate investing. If you can’t answer these questions, then you won’t have anything to look forward to down the line.
We can’t stress enough how important it is to start with a goal in mind. If you don’t have a goal, then how will you establish an effective plan to execute those goals? Keep in mind that “if you don’t have a plan for your money, your money will have a plan for you.” With that said, once you have developed a plan for yourself as an investor, you’ll then know why you’re working, and what you’re working toward – i.e. saving up to upgrade to a multifamily unit.
When starting, we encourage people to start small but to also believe in yourself enough to not undersell yourself as an investor. You’d be surprised at how many people reach a higher goal than what they initially thought they could. I.e. instead of focusing on 12 months, think about what you want your investment journey to look like in 5 years or more. Buy what you can afford and fix it up to maximize the income. You can also refinance and pull cash out, or sale – or over a period of time, refinance and sale. After which, you can then use that money to roll over into another investment deal, ultimately trading up.
Shift your mindset
Moving up to a multifamily property, or from a 2-4 unit to a 10 unit, is without a doubt going to require a shift in your mindset – consider reading books and/or listening to podcasts that pertain to multifamily properties. Understanding multifamily properties as an investor will help you understand how to get good, quality tenants to move into your units, so you can generate enough cash flow to pay your mortgage.
Getting into an investor’s mindset can be scary – you’ve never done it before. However, once you start to build that confidence, you’ll want to keep doing it. Keep in mind that once you commit, it’s going to be a process, so don’t expect things to be easy or happen overnight. A shift in your mindset is going to require you to have patience. Nonetheless, when deciding what kind of property you want to invest in, do the numbers. Ultimately, it’s about the safest investment vehicle that you can invest your money in. Of course, it may be uncomfortable to you at first – but remember that “usually, if it’s not easy to do, then you’re on the right track.” You can have the highest degree of success when you invest or buy a multifamily unit, but only if you stay focused on your goals.
What Can I Do to Execute?
Now that you’ve established a goal and a plan, and have shifted your mindset, it’s now time to execute. As an investor, having a professional, such as a mentor, lender, or broker on your side can be valuable in helping you understand what you’re doing, and how to handle certain situations.
However, while professionals can be valuable, it’s important to know your numbers as an investor. Real estate investing is common sense – run the numbers yourself, so that you’re able to walk into a situation with more of a clear mind. A professional is here to assist and to provide guidance – he/she can potentially get you to see things from a different perspective, but you’ll want to have some sort of understanding about what’s going on, as well as who you’re choosing to invest your money with. There are guidelines that you can follow, and if you’re up to date with the current housing market, then you’ll be able to predict things much easier. All in all, what it comes down to is doing the research yourself…get multiple opinions, talk to others in the industry, and become well-rounded and educated.