How to get started in real estate investing?
So what’s the best way to break into real estate investing? You may think you should start by getting approved for a loan. Maybe you think you should meet with contractors, realtors or even lawyers first. Perhaps you should buy one of those seminar packages who come with a mentor that will tell you exactly what to do next.
Here is a personal tip: please don’t do the latter. I’m all about the right kind of seminars but … well let me explain.
I met a wonderful couple; they were excited about getting into real estate investing. They’d purchased a program that was supposed to teach them the ins and outs of the business. This package came with an “expert” who’d mentor them one day a month for a year.
The problem I saw with this scenario was that the purchase price for this package was more than what it costs to buy a house.
Had they known better, they could’ve partnered with an investor for that same amount and been made part of a deal while being taught in the process. This would’ve given them some real-world education while making them some money. And that would have been a great jump start to their business.
As we were talking, this couple, desperate to get started, asked me what they should do first.
All the things I mentioned in the first paragraph are important, but they all hinge on one thing: you have to have a deal for any of them to matter. In order to have a deal, you have to get face to face with sellers.
This factor is very important. You see deals are created by asking the seller lots of questions so you can find out what they need and how you can give it to them.
In fact, Pete Fortunato’s famous question, “Why are you selling such a nice house as this?” should be the first thing you ask.
In mentioning Pete’s question, I’m reminded of a deal we created by using it. The seller needed to move because of heartache – they’d inherited the house from their grandmother who raised them. They thought living in the house and fixing it up would make them feel closer to the newly departed, but instead, it brought up memories that kept the wound of losing her fresh. Plus, once they moved in, they realized fixing it up was too big of a project for them.
When I asked them Pete’s question, they tearfully told me they felt they were letting their loved one down by not being able to fix the house up.
They’d started looking for a new place and found they’d be able to purchase a house they’d previously lived in – it was where they’d brought their first-born child home to. This opportunity had given them excitement, but they needed money to move.
We agreed that since the house needed so much work, we’d give them 10 percent of the purchase price as a down payment and they’d carry a note back for the remainder until we sold the house. This gave them the moving money they needed and got us started on a rehab for much less out of pocket than if we’d bought it outright.
By getting face to face, we saw cash wasn’t as important to this seller as the concept of doing right by grandma’s memory. Once we finished the renovation, we invited them back for a tour of the house. Hearing them say we made grandma proud really warmed my heart.
So if you’re interested in getting into real estate investing, go see some sellers and ask Pete’s question. Once you have a deal, all the other things like money, knowledge and a team of professional will fall into place.
Joe and Ashley English buy houses and mobile homes in Northwest Georgia. For more information or to ask a question, go to www.cashflowwithjoe.com or call Joe at 678-986-6813.