by Gino Barbaro
I remember when I first decided to try my hand at real estate investing. I was a business owner with a growing family and limited time on my hands. My goal was to generate some additional money to supplement my business income and accumulate these assets as part of my retirement. A few years later, my goals changed radically, and I decided to devote more time to learning the business. This article will discuss how much time a newbie should devote to their education and how much money is needed to begin investing.
The First Question a Newbie Should Ask
The first question a newbie should ask is, “Do I want to create some passive income or do I want to become a full-time investor?” I regret not dedicating more time to educating myself on investing. I elected not to hire a coach or mentor and believed that my family’s experience was enough for me to be successful. Those were the first and second mistakes on my journey.
I would recommend every new beginner dedicate at least an hour per day to learning the business. Wake up 30 minutes early, spend half of your lunch hour consuming content, and read a book before you hit the sack. Everyone has at least one hour per day to dedicate towards their future. If you don’t, then continue to lead the same mundane life and don’t waste your time.
It doesn’t matter what type of content you consume. Download podcasts for the commute, listen to Audible when working out, watch You Tube videos if you are a visual learner. The key is to surround yourself with continuous, positive information about real estate to keep you motivated and engaged. And, of course, join websites such as BiggerPockets to engage with professionals.
This is the beginning of a new adventure for you, and if you are not excited, then quit immediately. Real estate is a difficult business to learn, and you will experience many ups and downs. If you attack the business with a low level of energy, expect to get a low level of return. I was not excited when I first began, and my results mirrored my excitement.
It was only when my “should” became a “must” that I totally dedicated myself to learning. I felt that it was life or death for my family and myself to succeed, and within three quick years, I was able to “retire” from my business and pursue real estate full-time.
Don’t Do it On Your Own
My second mistake was trying to learn everything on my own. When I decided to hire a real estate coach, my knowledge exploded, and more importantly, my learning curve was dramatically shortened. I finally had a custom tailored plan for myself and a coach to hold me accountable when I ran into stumbling blocks. I often hear people complain about the cost of a coach, but I could never calculate the true cost to my life if I DIDN’T hire a coach. I was so convinced about the profession that I attended Institute For Professional Excellence In Coaching and became a Certified Professional Coach.
Do you need to hire a coach? Not necessarily. My partner Jake was never coached, but our partnership led me to mentoring him through our first few acquisitions. His willingness to jump in and manage our properties gave him hands on experience and someone to talk to when problems arose.
How Much Money Will You Need?
Now comes the money question! This is also a highly subjective and controversial topic. How many units do you plan on acquiring? Are you going to raise private money? Do you intend to partner with someone? What part of the country are you going to invest in? On our first investment, we acquired a $600,000 multifamily property. There were three partners, and we were able to secure 10% of the down payment as seller financing. The bank provided 80% of the financing, and we had to raise the remaining 10%. Thus, we “only” needed a total of $81,000 to acquire our first deal (this included closing costs).
It is difficult to assess how much a newbie has to save for their first investment. The most important piece of advice that I can give is to get your financial house in order. Try to eliminate as much personal debt as possible, and maintain a few months of salary in a savings account for any type of emergency. If the newbie investor can bring value to the investment, such as Jake did to our partnership, then money will not be the central issue. Jake would have taken a smaller percentage of the deal, but he would have been earning management fees to manage the property. The key is to get started!
Commit to real estate. Set aside at least one hour per day to educate yourself. Put your financial house in order, and seek out professionals for advice and guidance. Finally, have some fun. You are embarking on a new adventure, and things may get a bit uncomfortable.
If you’re just starting out, what weekly tasks are you performing to ready yourself to invest? How much time are you spending on real estate-related items?
Let me know your experiences with a comment!
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Address: 1415 Main St. #823, Grandview, MO 64030
Ireland Investments llc
This information is intended only for the use of the intended recipient(s) and it may be privileged and confidential. Please note that any views or opinions presented in this post are solely those of the author and do not necessarily represent those of the company. This is reposted information and is not original thought of Ireland Investments or anyone associated with the business.
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