Success in Real Estate is taking action. Taking the necessary steps we as real estate investors and professionals can take to progress along our road to success. In order to obtain true success it is always important to understand where you are in accordance to your road to success. Are you at the beginning, middle, or almost at the end of your own personal road to success? This article will share some tips that I found useful from my own experiences and of others based on their positioning in accordance to success.
Getting Started in Real Estate Investing
Let’s begin with the investor that is just starting out. This usually is a person that is highly motivated, has a job they hate and can’t wait to quit, and wants very badly to be a full time investor. Many of us have been there or are currently experiencing these feelings and experiences. The best advice I can tell the beginning investor is to constantly learn, keep your day job, and have a plan to eventually be a full time investor.
Your hate of your job and your impulsive quitting of your job does not put food on your table, plus what deals do you have, you just learning what real estate investing really is. I have known of those who jumped out on faith and were successful, but I don’t recommend it. Learn the game, treat real estate like a true part time job, and hit it hard when you can so you can quit that 9 to 5 you hate so much.
The smart beginner will save up either his work check or his earnings from the deals he or she has done so that they have a fall back when times are hard, but they can one day become and continue to be a full time investor. The saddest stories I have heard are those of beginning investors who have dove all the way in to the real estate pool only to never be heard of again and ate by the sharks. Don’t be the beginner who starts strong and can’t finish the race be the beginner who starts steady, but finishes strong.
The category most of us fit into reading this article is the full time investor looking to progress our business to the next level. We have marketing budgets, expenses, tenants, contractors and we know how to survive now we want to thrive. One piece of advice that has helped me drastically is to plan out for your big expenses such as taxes and when the sewer line needs replacing, etc.
The worst enemy of progression is not the unexpected expenses, but the failure to prepare for an unexpected expense. So depending on the size of your business budget a set amount to put away for expenses per month. You MUST pay this like a bill no excuses. You’ll be thanking me later. Also when it comes to taxes or expenses what breaks or arrangements can you take to not pay all the expenses at once? What situation can you arrange that will give you more time to pay back the expense?
In San Antonio the Bexar County Tax Assessor will allow you to pay a half payment on your property taxes if half of the amount owed on the year is paid by November 30th. This allows tax payers to pay half by November 30th and pay the other half by June of the following year. So instead of paying all the taxes by January 2016 you have till June 2016 to pay the property taxes without a penalty. T
his has been a game changer for me and has allowed me to focus my expenses on marketing, other expenses, and most importantly ease financial burden. Secondly, if you don’t have great credit get great credit. Yeah using other people’s money is awesome, but every business person needs great credit. Credit used correctly can often ease the financial burden of unexpected expenses as well.
Example if an AC goes out on one of your rentals there goes $3K to $6K to replace it out of your pocket. However, if you can put it on a card or get it financed at a great interest rate the burden is stretched over a period of time that is manageable allowing your business to move forward and operate business as usual.
Professional Real Estate Investors (Full Time)
The last group is the investors who have made it. They have done the deals, made the money, avoided the pitfalls, they are successful. The advice I have received from investors that have reached success is have a plan on how you will retire and keep retired as long as you desire.
One investor told me, “JP if you get 20 houses that are paid in full and get at least $800 a month in rent don’t you think you can live off of the rent the houses produce?” If we calculate the numbers that is $16,000 a month and $192,000 a year. We all know there will be expenses, vacancies, and taxes to be paid, but it is not bad money and the goal is reachable.
If you’re a young landlord this is a goal that is reachable, obtainable, and realistic. However, saying you going to have 500 rentals for many may not be an obtainable goal. Each investor is different. Your goals are different from mine, and mine are different from yours, but the point is to sit goals that fit what works for you and to reach them.
Focus on Success
Success is a process. Success takes work. The beginner must be successful to become full time. The full time investor must have an end goal in order to reach the ultimate goal and retire in the sunset with a smile on his or her face. Find your success and don’t give up, keep dreaming, keep planning, and keep investing.
As always thanks for reading and successful investing.