Some great advice I heard that’s been circulating around forward thinking people looking to better their lives is, “What would you do if you knew you could not fail?” For a lot of folks, when it comes to real-estate, the dream of owning a home or investing in property stays in this amorphous dream-land instead of becoming a real possibility because there’s a large misconception that’s also simultaneously circulating among these would-be investors: the system is set up to take advantage of you, your money, and your dream. This is the furthest thing from the truth.
Here’s a quick tip, if you believe in that statement above, you might not be ready to start investing in real estate, and that’s fine. However, if you are open to the possibility of making one of the smartest investments of your life, taking control of your long-term financial future, and establishing generational wealth for your family, please check in with yourself to see if you’re ready to start investing in real estate. Taking time to pause and assess where you are when it comes to your mindset as it relates to real estate will ultimately save you a ton of money, frustration, and maybe heartache down the line.
Here’s 5 Indicators to help gauge if you’re ready to start investing in real estate:
1. You’re ready to be a beginner again. In your life, I’m sure you’re great at many things. But, once upon a time you knew nothing about those things. If you’re investing in real estate for the first time, you’re going to be at a disadvantage by virtue of your lack of experience in this arena. You can’t change this, so you have to make peace with being a kid falling off their bike over and over again while they’re learning how to ride one. It’s humbling to be sure, but everybody has to start somewhere. Are you ready to approach this process with a beginner’s mindset, ready to learn, stumble, and grow on the way? If the idea of being a beginner at something again isn’t already bruising your ego, you’re already off to a great start.
2. You have time and energy to spare. If you’re willing to take a few hours out of your day per week to learn about all things financing, consider yourself ready to start investing in real estate. This is where you put your beginners mindset to the test. Think of all the questions you have about investing, write them down, and spend time researching the answers to those questions to the best of your ability. For example, you may be of the belief that getting a mortgage is hard or that your credit score isn’t good enough to qualify for one. Well, did you know that for an FHA or VA loan, you only need a credit score of 580 to qualify? There are so many lines of credit and loan opportunities open to people of all different backgrounds, occupations, with different financial histories, you name it. But, do you have the time to investigate these hidden gems, then apply for them?
3. You’re great at asking for help. This goes back to being a beginner. You will not know many things about investing in real estate. For example, there’s a lot of nuance when it comes to the taxes involved with real estate and property ownership. Are you ready to become an expert, or would you like to hire one? When you run into a roadblock with this knowledge-gap, don’t be too proud to ask for help. More likely than not, you will end up working with a team of experts you hopefully trust who can guide you through this process. If you’re a rugged individualist who thinks you can scrap this together on your own and throw all of your hard earned money at a plot of land, you’re forgetting this is an investment opportunity at heart and you’re already devaluing it. Remember, that hiring a team is also part of this investment, it isn’t “extra” and yes, you will need their help.
4. Your intention is clear. Is this a purely investment property? Are you looking to rent it out or live there longterm? Or are you interested in commercial real estate? Yes, investing in real estate is a smart decision, but like anything else in life, being clear with your intention from the outset will be extremely helpful when it comes to making empowered decisions for your future and staying the course. Anything that deviates from your intention with this investment? You don’t need it. Investing in real estate is exciting and it’s easy to get side tracked – anyone who’s spent hours window shopping on Zillow will tell you that. Be sure you’re absolutely clear on what it is you want out of this investment before you do anything else.
5. You aren’t afraid of your bank. If you’re someone who flinches when they check their bank balance, someone who gets queasy talking about money, or feels afraid like they’re a kid being punished in school every time you enter the bank, investing in real estate is probably not for you. Beyond being an app on your phone to deposit checks or the place your direct deposit goes to, there’s likely a brick and mortar building in your area that represents the institution you bank with. Go in there and ask to speak to a mortgage broker about your investment goals. These people are here to help you achieve that dream you have of owning property and will assist you in making that dream come true one step at a time. It’s free to speak to a broker (an expert who has knowledge that you, a beginner, currently lack) and if real estate is going to be a main avenue for your investment portfolio in your life, now is the time to start establishing this key relationship. You and your broker are about to become best friends. They’re strangers now, but don’t be scared. Like anything else in life, the key to success is building an authentic and honest relationship with people on your team.
And remember, you may have heard scary stories about housing bubbles or evil banks, but for the most part they’re just that – stories. This is not to say to discredit the past mistakes of others, but this is uncharted territory. Moving towards this investment opportunity should be exciting more so than scary!
So, if you’re still excited about real estate and you’re undeterred from investing after reading this list, you have my seal of approval – you’re ready – now, go get started, ask lots of questions, be ready to learn and good luck.