This real estate investing thing can get pretty mind-boggling.
Where do I start or if I have already started, where do I go from here. Do I go for a lease option, subject to, rehab, wholesale, long term rental, retail, etc? Then how do I fund the thing? Do I look for seller financing, hard money, private money, bank line of credit, relatives or partners (that’s a scary one), or just pay cash. Then you start thinking, where can I get the education and training I need to either get started or get to the next level.
I think everyone that gets into real estate goes through this. I have been in this over 18 years and I still struggle with what I want to do next. It is important to continuously look at your situation and make adjustments in your long term goals but do not get so bogged down with paralysis of analysis that you do nothing. Start from where you are right now with what you know. If you know lease options start with that and do a couple. You may stick with it or as you learn about high-end rentals or section 8 you may do some of those. Whatever it is you start with it doesn’t matter as long as you do your due diligence and make sure that you have an exit strategy.
My wife and I were having a conversation last month about how we did last year in real estate. I was telling her that it was a really good year and how many houses we bought and a little about some of the deals. I was excited until she looked at me and said, that sounds good but how many of those deals did we keep for ourselves to add to our rental portfolio? I had to tell her zero. She then said, so for you to keep the money coming in you have to show up every day and keep buying and selling houses, right? My wife knows nothing about real estate but she reminded me of a valuable lesson.
Unless you keep some as rentals you will always have to “show up” to get a paycheck. We have decided to start keeping at least one a month for ourselves. If we keep one a month and have a $200 a month cash flow on each one our cash flow at the end of our first year is $2,400 a month. You can do this for a few years and build up a nice passive income.
Real estate is a great vehicle for making money whether you’re a realtor, builder, lender, wholesaler or retailer but just don’t forget how to really get wealthy and create an income for life. You have to keep some!