Investing in real estate is done several different ways. You don’t need to be a full-time rehab investor to enjoy success. There are many would be investors who shy away from the business based on perception. They don’t think they can invest with a full-time job, kids and everything else life throws at them. The reality is if you are willing to make some personal sacrifices, work hard at your craft and find good people you can invest successfully, regardless of circumstance. Like anything else, there will be periods of ups and downs but don’t let other people’s perceptions get in the way of something you want to do. Some of the best investors got their start while working at a full-time job and raising kids. Here are five tips to help ease the transition and get you started investing in real estate.
- Build The Best Team: If you have a full-time job that limits your availability you need to find a team that can help supplement this. Every good part time investor needs a solid real estate agent, attorney, contractor, property manager and mortgage broker. In some situations, these people will act as your eyes and ears and you will work hand in hand with them. Take the time to build a solid relationship with all of them to the point that you trust that they have your best interests in mind. Your real estate agent should know exactly what types of properties and markets work for you. Your attorney should be willing to walk you through the contract and answer any questions you may have. Everyone on your team should work in cohesion, making your business as smooth as possible. A reliable team is absolutely essential if you can’t commit 30 hours a week to your real estate business.
- Pick And Choose Your Properties Wisely: Regardless if you close a deal a month or a deal a year it is important to pick and choose your property battles wisely. The most common mistake part time investors make is pursuing deals with limited upside. They think that because they don’t have much going on they need to force the issue. Instead of crunching the numbers and looking or deals that fit, they get involved in speculative deals. When these don’t produce the results they anticipated, they get discouraged and either become far too picky or much too loose. As difficult as it may be, you need to have a plan of attack in mind and be willing to follow it. Stay disciplined with your numbers and formulas and be willing to walk away if they don’t make sense. Of course, this is much easier said than done but only closing a handful of profitable deals a year is much better than scraping to make a small profit, or even taking a loss.
- Save/Don’t Spend: There is an old financial saying in that it is not how much you make but how much you keep. This is especially important in the world of real estate investing. You are not judged on the number of deals you close but rather the bottom line. Closing only a few deals a year is ok, if the risk justifies the return. With every deal you close you need to make sure you handle your profits wisely. It is a major adjustment getting a lump sum check after a successful fix and flip deal. It can almost feel like you hit the lottery. You will be tempted to make expense that you normally wouldn’t. It is important to fight this urge and think of the big picture of your business. Most of your profits should be put to either paying down debt or reinvested back into your business. This doesn’t mean you should be cheap, or not spend money when necessary. It simply means that you need to pick and choose your expenses wisely.
- Keep Going: If you want to invest in real estate nobody is stopping you. You don’t need a business license, or even a degree to submit an offer. However, there will be times when you will feel like you are fighting an uphill battle. Deals will fall apart, offers will get rejected and unexpected problems will surface. If you want to get to where you want to go, you need to keep going. Investing is like trying to lose weight. You may get an initial burst, but soon after you will level off and be disappointed in your results. At that point you can either throw up your hands and quit or push through and see what happens. Those investors who push through will look back and be glad they did. The investors that quit will never know what kind of success they may have had.
- Find A Balance: The hardest thing about investing part time is finding the time to do everything you want to do. It sounds simplistic but make a list of your time priorities. Work is most likely your number one, followed by real estate, family time and leisure activities in no particular order. If you really want to invest you will need to make some sacrifices. This could be spending some time after hours on your business or maybe giving up a weekend or two a month. These may not be ideal, but they are the only way your business is going to work. The quicker you can learn to balance everything out, the faster you will get to where you want to go.
Right now, all across the country there are thousands of investors working full time while balancing family life. On the surface, it can seem daunting, but if they can do it so can you.