Look, I know that real estate investing is a lot to take in. It’s not the kind of thing you can just jump into without doing your research and starting from scratch.
But it doesn’t have to be as daunting as you think! This nine-step plan will help you get started on the right track and start making some serious money in a few months or years, depending on how committed you are.
Figure Out What Your Financial Situation Looks Like
The first thing that needs to happen if you want to succeed with real estate investing is figuring out what your financial situation looks like. And I don’t mean just your bank account, though that is important.
Figure out where you stand as a person financially. This includes:
What is your credit score like? If you haven’t looked in a while, it’s never too late to check and try to bring it up if you are falling behind. Go to www.annualcreditreport.com to access your free credit report from one of the three major reporting agencies.
Fix any problems you find on your credit report.
You will often see mistakes or errors when you get your free credit report, so make sure to fix any issues that can potentially kill your chances of getting a loan.
What is your general financial knowledge like? Do you have a handle on your spending habits and how much it will take to keep up with them? Do you have money set aside in case of an emergency? If not, do some research and figure out how much you should be putting away every month.
The most basic rule of thumb is to save 10-15% of what you earn for emergencies.
If you’re an independent contractor, set aside even more money. Usually, independent contractors end up paying an IRS tax on the money that they take in for themselves.
If it’s too high, a good way to save some of what you earn is to pay yourself a little extra each month.
How much do you make? One of the biggest mistakes new investors make is assuming they can make enough money to support themselves just by doing real estate investing.
Not only is this untrue, but it costs them hundreds of dollars in taxes and expenses
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Figure out how much money this is going to cost you over the next several years.
If it’s not enough to get by on, then stop reading now and focus on bringing in more money or decrease your expenses so that you can save some extra cash for investing.when they start out and then thousands when they finally figure out how long it takes to break even at their earnings level. So, how much do you make?
Are you a single male or female who has no dependents or are you married with children
Commit For At Least 3 Years
I know that a lot of people say they want to get started with real estate investing but aren’t willing to commit for several years.
They want to get started as soon as possible and make some big paydays as soon as possible, too. And that’s absolutely fine.
But there’s a reason I told you to set aside some money for emergencies and to save 10-15% of what you make: You need to be willing to commit for at least three years.
If you aren’t willing to do this, don’t do it.
With most things you try, the longer your time frame, the better your chances of success if everything works out (which is incredibly unlikely).
So while I don’t agree with committing several years straight ahead of time, I understand that everyone has their own way of thinking and MOOC (Mastery Over Commitment/Overspending) happens. If you are willing to commit for at least three years, keep reading.
Look At Cash Flow, Not Income
A lot of people make the mistake of looking at their “potential” income instead of their actual cash flow.
Real estate investing is a business, not a get-rich-quick scheme. So when you look at your potential investing income, that includes money that you might earn in the future.
And if you aren’t living off your investments right now, then you have no right to expect to live off of them in the future! Fabulous Story
It sounds harsh but it’s true. You are investing in the stock market, real estate, or anything else. If you don’t make money right now, then you might not make any money in the future.
Find A Simple, Repeatable Business Model
Starting a new business can be hard enough sometimes without having to figure out all of the tax laws and other regulations that apply to different states and countries around the world.
It can be even harder when you have to figure out which resources you need to access to learn everything you need to know about your new business (which is why I created my free course).