The real estate market is, sometimes, given a wrong impression by the media. For some people, it is something you can get into, make a ton of cash, retire by thirty, and settle for a life on the beach.
Other times, the media gives the impression that the real estate market has no entry point, and it is created only for investors with deep pockets. But of course, you should not get your education from the media.
Today, Winston Deloney, a Chicago-based seasoned real estate expert and entrepreneur, will be sharing exposes and thoughts on how to start from the bottom in real estate.
You Need Good Credit
The availability of funds highly determines real estate. An investment opportunity or idea will remain so—an idea or opportunity, if you do not have the financial and technical resources to turn the idea into a business.
While I generally frown on borrowing because of personal expenses, a company cannot run without some form of funding. If you have a history of borrowing and defaulting on payments, your credit report will be on the wrong side of lenders.
If you already have bad credit, I will suggest that you get your life and finances together, put a leash on your spending, make attempts to renegotiate a debt consolidation, settlement, or a change in contract with your lenders.
You may have to work with a credit counselor. Get your credit in order, and patiently wait for an opportunity—or search for one.
You Need to Learn the Game
People succeed in businesses because they understand the business. While a lot of money can be made from real estate, I advise that you start by educating yourself.
House flipping, for example, may look very simple: you see a property you buy, you renovate, and then you sell. However, it is a complicated transaction that can leave you hanging if you do not have good knowledge about how house flipping works.
For house flipping, you need to factor in the market price of the property you want to purchase, funds to buy the property, negotiation with the seller, contractors, design-build engineers, council, tax, the government, mortgage, and a host of many other things.
If you want to run a real estate business successfully, you need to learn the ropes.
Find a Mentor
The fastest way to succeed as a business owner is to find someone who has succeeded in what you want to achieve. It’s not enough to have a drive. There are more manageable, cheaper, and more creative ways to achieve your real estate goals. When you find a suitable mentor, you will learn from their experience and avoid the easy pitfalls.
There are three factors you should look out for when looking for a real estate mentor.
- Has he made significant achievements in the real estate market. Do not learn from an amateur. Is this person an established, savvy, and experienced real estate investor, or is he also trying to get his foot in the real estate market?
- Are his strategies relatable to your situation? You are starting from the bottom—your problem is different. Your circumstances are unique. Find a mentor who had similar cases like yours.
- Learn for yourself: While I appreciate mentorship, there are certain things you may need to learn for yourself—like how to follow your guts, hard work, courage, negotiation. You’ll have some of these complex characters by taking a few risks.
Remember that all risks must be calculated. The real estate market is conquerable—even for upstarts. Put your leg in one foot at a time, and in due time, you will reach your desired height.
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