By Jeremie Beaudry
You ever see those “ret rich quick schemes” about real estate on TV at like 2:00 AM? Here’s an even better question: have you ever bought the “get rich quick scheme” system at 2:00 AM? I have to admit that I actually purchased one expecting the worst. I just wanted to read the first three chapters just to see how much credibility these “professional courses” actually had. And to my surprise it was just total crap (sarcasm). It was more of a semi-inspirational course that really didn’t get you motivated enough to go out and buy real estate. I give it two thumbs down! I returned the program just because I really didn’t feel like paying Carlton Sheets and, of course, because it was a complete scam. Another thing that I would like to point out is how much trustworthiness these people even have if they have an infomercial at 2:00 AM. I mean they are competing for airtime against some “5 minute ab work-out” infomercial and “Girls Gone Retarded”! Now back to the point… The one thing that I have learned about real estate is that it requires time and comprehension. It is not some kind of get rich quick scheme because if you are in it for the short-term you are going to lose big time. It requires you to be diligent and get as much knowledge in real estate as possible.
Step one: Develop your game plan.
Before you dive into the uncharted real estate waters, you need to develop a game plan. Figure out whether you want to invest in property, or just have a comfortable lifestyle (no more than two properties). This step is crucial because it makes your house hunting much different. Many factors come into play that you would probably overlook if you were just buying it as your residence. Examples would be the renting culture (how many homes are already being rented in the neighborhood), apartment prices (to stay competitive), proximity to grocery stores, malls, etc. (area renting incentives).
Step two: Already nice, or fixer upper.
Are you going to shop for foreclosures, houses that need some repairs, or homes that are already nice and ready to move in? These are some things you must read up on. Don’t just decide you’re going into the foreclosure market and fixing up the house without looking at cost analysis of the repairs (materials, labor, and time). This can get you into a lot of debt very quickly if done incorrectly. Buy Low, Rent Smart, Sell High is a great book that explains the costs of “fixer up’ers”.
Step three: Financing. Buying stuff with none of your own money!
Find your financing. I usually recommend finding your money source before you starting buying everything in sight. You can’t make a bid for a house without the Benjamins (money). When you are an early investor there is nothing else better than using other people’s money to buy stuff that makes you a profit. It’s a beautiful thing called leverage.
Step four: Advertising time baby!
Use as many free resources as possible before you start pumping money into other promotional devices. Use Craiglist's to advertising your new property before it goes on the renting market. You always need to start displaying ads before you buy the house, but make sure the deal will be going through. After exhausting your free advertising resources, use other online services (Rent.com), and local newspapers to announce an open house for rent. Use words like “New low price, Free Rent, Move-in Specials”.
Step five: More to come later on this week….
Books eFIPO recommends for Real Estate
Buy Low, Rent Smart, Sell High
The Automatic Millionaire Homeowner
The Beginner's Guide to Real Estate Investing
Blogs eFIPO recommends for Real Estate
Mind 2 Money
Real Estate Blog
The Real Estate Blog
Build Your Wealth in Real Estate
By Jeremie Beaudry