A lot of people have real estate empires, but have you ever wondered how they got started and why they were able to be so successful?
The reason isn’t that they began with a lot of money. Most of the people who started them were actually broke when they got going.
The truth is that they followed a formula that works. This formula isn’t the same for everyone, but it follows a general pattern.
1. Education
The first step starts with education. That doesn’t mean going to a literal school or university but instead learning about how the industry works and what people in it do to make money.
The trick at this step is to understand the value of debt. When you go into debt, it’s possible to afford homes and then sell them for a profit. It’s also possible to cover the debt and interest payments with income from the property, another tactic that a lot of people use.
2. Start With It As A Side Hustle
Next, you want to think about making your real estate business a side hustle. It won’t become your full-time job immediately, but it can be a great way to learn the ropes and get things moving if you do it in the evenings.
For example, you could use your free time to:
- Meet people in the industry and network with them
- Learn new skills
- Scout deals
3. Use Financing
Next, you’ll want to look into the possible use of financing. Almost everyone in the real estate business does this, so it’s a necessary part of the process. While you can buy properties outright, that’s a great way to go through your cash quickly, and it can prevent you from actually getting a better return.
Furthermore, you may not have much cash right now (which is probably the primary motivation for becoming a real estate mogul in the first place). In this case, spreading your money out among many properties and using lenders is usually the best option.
4. Be Creative
I sometimes like to talk to design build contractors near me about the sorts of properties that are possible in the area and which are likely to make the highest return. The problem with the existing housing stock is that it just isn’t set up for landlords. The original assumption was that people who lived in properties would own them, but today, that isn’t the case, causing friction.
The best way around this problem is to buy and build properties yourself. This way, you can set them up for maximum return on your initial investment.
5. Start Small
Starting small is also critical. You want to find affordable, easy-to-rent properties that people want. If it looks like there is an issue with a home, it’ll be harder to find tenants or make a return on the initial capital value.
6.Build Growth Systems
Finally, you want to build “growth systems.” Hiring property managers and automating tasks like tenant screening are critical for long-term business success. Getting the right people into properties can make all the difference.
