The question I’m asked more than any other regarding the Real Estate Riches column is, “How do I get started?”
It’s not about the one deal I made that earned me enough money to retire on, it’s not about my secret to buying a property using zero of my own money, and it’s not about any other of the real estate tricks I’ve used.
It’s simply about taking that first step.
And I suppose that shouldn’t surprise me, because it’s the most important thing. Once you copy this exact blueprint to get started, everything else is easy…
The first thing I want you to do is throw away any ideas you may have about buying a glamorous property and flipping it for an instant profit after removing a few walls and installing a smart kitchen.
That’s the sort of phony thing you see on bad real estate TV.
In reality, getting started in your real estate investment career won’t be extravagant and television-worthy, but it also doesn’t have to be difficult if you follow this plan…
1. Your first property
If you’re just getting started, you likely have very little experience and a relatively small amount of cash to work with. That’s OK!
All you need to focus on is getting your hands on the right live-in property.
That’s right – your first property will be one you live in, which means you may already be in it!
The trick is getting into something cheap that can be improved. This sort of property is going to cost you next to nothing to get into, which allows you to spend what capital you have on upgrades.
Now it’s time to improve the property. The nice thing about it being a live-in property is that you don’t have to rush to make sure you’re not draining money, so go at your own pace. With a fixed-rate mortgage, timing won’t really matter.
Do some painting, restore the yard and fence, put in new flooring (my favorite upgrade!), and replace anything that’s bringing down the value of the property.
Now sell it for a nice profit, and move on to the next one!
2. Your second property
This is my favorite real estate trick for beginners, and where your real estate career will really be put into motion.
Now that you’ve successfully completed your flip on the first property, use the profits to put a down payment on a multi-family property for the next one. Here’s the idea:
With a multi-family property, like a duplex or two-house lot, you can live rent-free in one home while renting out the other(s)! This give you so many benefits that will kick-off your career:
- You’ll be right there for your tenants when they need anything, which is much nicer than having to drive an hour to get to your property every time the tenants ask for something.
- You now have an extra income stream flowing into your pockets.
- This will give you the platform to now use that extra income to put a down payment on a new property, and build on what you have going!
- When you eventually move out, the other home on the multi-family property will turn into another income stream in your real estate portfolio.
Before you know it, you now have multiple properties earning you a passive income that you can use to buy and flip bigger and better properties as you go!
That’s the point at which it all snowballs, and what seemed like a daunting road at the beginning of the journey has now become easy for you…and very, very profitable!
