It’s smart to start off as a small investor in real estate. One, it’s easier to get into the game and your options are greater in number, that’s for sure. And two, it’s safer with less risk involved. Lastly, I guess the strongest part of the equation is that income and value seem to be more consistent and stable.
Some people have to start off small due to financial constraints or fear, perhaps both. While others start off small because they think it’s the wisest thing to do. Smart move.
The Principle of Kaizen, a Japanese technique for achieving great and lasting success through small, steady steps has been around for years and phenomenally successful worldwide. It’s based on the concept of “how you eat an elephant” – and the answer is “one bite at a time”.
To build a fortune in real estate requires years of being in the game, adding to your portfolio one property at a time, and taking territory inch-by-inch. It will pay-off hugely in the long-term and the short-term as well.
Here are 3 keys to making money in real estate for small investors:
#1 – Choose mastery. Focus on one property-type at a time.
There’s power and riches in focusing. If you like apartments, then buy apartments. If your passion is in another type of property, then do that. Choose mastery. Studies tell us that we can only “master” one subject at a time. Two, if you’re exceptional. Choose to be an expert in apartment investing only rather than just an average investor of apartments and another property-type. Maybe choose to be the best in small retail strip centers. Or perhaps be supremely knowledgeable in mobile home parks. Whatever you do, choose mastery.
#2 – Once you find your passion for a property-type, study it like a mad-man!
Get your hands on books (or ebooks), go to seminars (or webinars), and hang out with people who are already doing what you want to do. But by far, the biggest bang for your buck is going to be hiring or interviewing experts in your field. This will fast-track your knowledge level. But here’s the key: when you are talking to these experts, look for their patterns of success and their best practices. And then, do what they do!
The secret to making money as a small investor is duplication by replication! Duplicate the experts’ habits of success and best practices and replicate it exactly – that’s the key! Most of the how-to is there – you now must do the work.
#3 – Start off with a small property and that’s close by.
My first commercial apartment building was a quaint 7 unit building that was close by. It was very affordable and I got great seller-financing. A big plus was that it came with an established property management company at the helm. My first small residential apartments were duplexes and four-plexes that were a few minutes from my house. When you’re first starting out as an investor, there are lots to learn and there are lots of mistakes to be made. Small property mistakes usually equals small pains. That’s why it’s smart to start off with a small property.