It seems so clear now that I have been an investor for many years, but I can remember how intimidating it was trying to figure out where/how to get started. It felt like being a freshman on the first day of high school. Just like any new experience/hobby/job/change, you just need to get started. Secondly, you need to surround yourself with advisers that you trust to give you great advice.
Here are the steps I would recommend to get started:
- Figure out what type of investing you are interested in: flipping, flip & hold, single-family investments, multi-family investments, commercial. If you are uncertain, call for rent signs and talk to other landlords. Go to your local REI meetings and meet other investors.
- Read everything you can about real estate investing. Participate in on-line forums and discussion groups. Take a real estate investor to lunch and pick his brain.
- Find a mortgage broker that specializes in investment property. Without the financing solidified, you can look at properties day and night, but will never be able to buy anything. S/he should own investment property so that s/he understands the nuances of being a landlord. You should expect that this person will give you long-term advice and that you will be working with him for years. Because of the long term commitment, make sure it is someone that you like and trust.
- Next, ask your new and trusted mortgage broker if s/he can recommend a Realtor. Preferably one that specializes in investment property. Also, s/he should own some investment property or done the same type of investing that you are interested in (flipping, flip & hold, etc). Tap your Realtor for information regarding both the market and how to buy investment property.
- Once you find a deal, analyze it thoroughly, but quickly. I find that some newer investors get start in analysis paralysis. Keep in mind that if it really is a good deal, probably 10 other investors think the same thing and you will lose the deal because you took too long. Get a second 3rd party opinion from someone in the REI group or an on-line forum.
- At the closing, ask questions about the process. Understand all the documents you are signing.
- After closing, immerse yourself in understanding how the process works. Whether you are flipping or buying to rent, learn all you can from the contractors, tenants, your advisers, and on-line.
Your Realtor and mortgage broker are your key advisers that you need. Other advisers that you should quickly identify are: accountant (once you own investment property, you should never do you own taxes again), attorney (hopefully you will never need him beyond setting up your llc), contractor for each trade (find business cards on boards at local hardware shops).
The key to becoming an investor is to surround yourself with people you trust and then just get started. It is an amazing ride!