How to get started in real estate investing in 8 steps
Andrew Syrios walks through 8 steps on getting started in real estate investing. Andrew’s company, Stewardship Properties, owns over 500 units in 4 states.
About the author: Andrew Syrios is a real estate investor and writer living in Kansas City, MO. He is a partner in Stewardship Properties along with his brother and father. Their company owns just over 500 units in four states.
I have heard hundreds of times from new investors how overwhelming it can be getting started in real estate. There is just so much information out there, so many gurus selling get-rich-quick schemes and so many different niches and ways to invest in real estate. Thus, real estate investing for beginners is hard to get off the ground and procrastination is an ever-present temptation.
With that in mind, in this article, I will lay out the steps for how to get started in real estate investing for beginners. If you don’t know anything about real estate, you’re in the right place, as we’ll outline each step of the process and provide a broad timeline to pace yourself against.
The basic steps to start real estate investing that we’ll cover in detail are as follows::
- Make sure real estate investing is what you want to do
- Create a broad plan
- Study, study, study
- Network, network, network
- Build a team
- Pick a niche to start in
- Pick a “drop dead date”
- Start investing!
1. Make sure real estate investing is what you want to do
Real estate investing is lucrative, but not an easy endeavor. If you don’t know your ‘why,’ you will not know what real estate investing strategy you should pursue in order to accomplish your goals.” So, focus on both what you want financially and why you want to invest in real estate. Once you have answers to those questions, it’s time to move on to creating an overarching plan.
2. Create a broad plan
The first thing you should do is create a broad plan with timelines for accomplishing the goals decided on from step one. Many new investors find it difficult to move from learner to doer. I’ve heard of people who have been going to seminars for a decade without having ever actually made an offer on a piece of property. Don’t be one of those people!
The key here is to line out the steps you are going to take, along with due dates for achieving them. You should also plan an approximate date that you will start investing by. To be clear, that’s not a date you will buy your first property, but it’s the date you will start seriously looking. To get you started, find the best ways to find investment properties here.
3. Study, study, study
As odd as it sounds, it’s actually quite liberating to have a plan for how you will study. For this stage, I would set aside three to six months, but no longer than that. And you can simultaneously do steps 4, 5 and 6 during this time (network, build a team and pick a niche). What’s liberating about it is that since you have planned out how you are going to study ahead of time, it can mitigate the feeling of “I have to do this right now”, which makes many feel overwhelmed and results in procrastination (or even giving up entirely).
In addition, planning out a period of time to learn the business also prevents you from getting overly excited and jumping in too quickly. If you dive in without proper preparation, you will more than likely make a lot of mistakes.
There are plenty of great books, websites, forums, and podcasts on real estate investing, as well as many seminars (although many seminars are overpriced and overly focused on selling products, so be careful here) to choose from. You can start with the LendingHome blog.
4. Network, network, network
You will not become a successful real estate investor by sitting back and reading one article after another. Real estate is a people business and it’s critical to get out there and network effectively with other real estate investors and professionals as soon as possible.
The best place to start is at a local REIA (Real Estate Investors Association) near you. These groups usually hold monthly meetings where you can listen to speakers and talk to local investors about the market. But there are many other similar meetings which you can find on Meetup.com or through a Google search.
And if you come across successful investors, offer to take them out to coffee or lunch and pick their brain. Maybe they’ll even let you work for them for a bit, while you learn the business.
5. Build a team
Once you decide what you want financially and are sure you want to start investing in real estate, you should immediately start studying and networking. After about a month, I would recommend working to build your team.
There are a large number of different vendors and professionals you will need to run your real estate business and succeed. You should start looking to get them on board before you start investing so they can assist during the process. And don’t just settle for one in each category. For example, you will want more than one contractor so you can get multiple bids on different projects. Some of the most important contacts you will need include:
- Real estate agents
- Vendors: plumbers, electricians, floor installers, cleaners, etc.
- Real estate attorneys
- Property managers
- Lenders or potential partners
Of course, if you plan to flip houses, you don’t necessarily need to look for a property manager, and if you have a lot of money saved up, you may not need to look for lenders. Everything depends on what you determined you will need when putting together your broad plan.
The best way to find good contacts in any industry is to ask for referrals from successful investors. Some may be hesitant regarding contractors since good ones are a prized possession and may not want to be shared, but they will usually be open with banks and attorneys. And of course, you can find many online: Craigslist, Indeed, and AngiesList are great places to find contractors.
Just make sure to interview each beforehand and ask for references. Make sure that what they offer is in line with what you want. For example, you don’t want to hire a real estate agent who specializes in working with homeowners but not with investors.
6. Pick a niche to start In
There are a thousand different niches in real estate. From residential, commercial, industrial, and retail to wholesaling, flipping, and holding to student housing, working class housing, ADU’s, AirBNB, veteran housing, and Section 8; to direct-to-seller marketing, buying foreclosure auctions, buying tax auctions, buying notes, real estate owned (REO) properties, probate, etc.
The important thing to remember is that you can’t specialize in everything. Pick a niche you want to start in, which if you have read this far will probably be either flipping or holding single family houses and small multifamily properties. Now, pick how you want to find these properties. It doesn’t have to be just one thing, but don’t try to do everything all at once. You will not be successful in real estate as a jack of all trades and a master of none.
7. Pick a “drop dead date”
At the very beginning, you should have picked an approximate date to start. After about two months or three at the absolute most, you should pick an official “drop dead date.” This is a date when you will start actively looking for properties to buy. Yes, it may take a year to actually find one, but you are no longer just a student at this point, you are an active real estate investor looking to make a deal.
When that “drop dead date” finally comes, put your fears aside and start trying to buy an investment property. At some point you have to dive in, so just do it!
However, always remember that just because you are actively trying to invest in real estate, that doesn’t mean you get to stop learning and networking. No matter how much success you have, you should always be learning more and networking for more and better contacts. Indeed, that’s perhaps the most important part of being a real estate investor.
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