It’s completely natural to be anxious when you’re first starting anything, particularly when your hard earned money is on the line. But in the real estate game, your mindset affects everything. That is why it is critical to invest in yourself as your first asset before you spend your first dollar on property. If you’re new to real estate investing, follow these four ProTips to develop a mindset that will set you up for long-term real estate success.
ProTip #1: Treat Real Estate Investing Like a Job
This may seem overwhelming if you already work a day job, but hear us out. If you want to have a “paycheck” from your real estate business, you can’t afford to treat real estate as a hobby. Taking your new business seriously will help you build a strong vehicle towards financial freedom. Even if you begin with a modest goal, such as a few hundred dollars of passive income monthly, treating your business exactly like a job will serve you immensely if you continue expanding your portfolio and set more ambitious goals.
Thinking of yourself as a professional, even when you’re brand new, can help turn you into one. If you approach your real estate business with seriousness, dedication, and a willingness to always learn new things, your odds of success will be higher.
ProTip #2: Be Patient and Consistent
This one is so much easier said than done. Real estate is not a get-rich-quick scheme. You can definitely get rich, even filthy stinking rich. But most of the time this will not come in the form of a windfall. Real estate offers many opportunities for creating wealth, but often your gains will be steadily incremental.
Just as you should be patient about building wealth, you should be patient with yourself. You will fail from time to time. After all, you’re new to this job. But failure is simply an artifact of trying. So when you do fail in ways big or small, don’t beat yourself up. Instead, learn from it. Many seasoned investors have had to fail their way into success, and they do so by simply resolving to fail forward. Operate with a mindset that failure is not truly failure if you learn from it, and your resilience will serve you throughout your career. In real estate, we either win or we learn. We only lose when we give up entirely.
ProTip #3: Create a Solid REI Business Structure
Building a business may sound intimidating, but anyone can do it and you’re not alone. Start simple. The next time you’re out running errands, pick up a dedicated notebook for your real estate business. You can even write it off later if you like.
The first thing to do is establish your metrics for success. Consider what your original motivations for creating your business were. Every business needs targets, so if you haven’t already, create a clear goal for revenue or returns. Write it down. And we mean actually write, with a pen or pencil. Research has demonstrated that the action of physically writing down a task or goal helps you remember the information and can strengthen your commitment. Creating a daily discipline of writing, setting, and achieving smaller goals has additional benefits. First, you are reinforcing that you are treating your business like a real job. You will also have a record of measurable progress to refer back to. Finally, you can reverse engineer the small steps you will need to take to proceed towards your larger goals. You can also make use of a tactic we use at Royal Legal Solutions: create three daily priorities that serve your greater goals. These priorities may be simple things like researching types of LLCs, reading a book, or analyzing certain details of your market.
Your notebook can also be a great place to jot down questions you have, information you want to learn about, and which pieces of your business to assemble next. For instance, you will need to think about how you are going to handle your taxes and legal structures. Unless you happen to be a CPA, attorney, realtor, and underwriter, you’re going to need some support. That’s where our next tip comes in.
ProTip #4: Know That You Don’t Know Everything and Ask For Help
If you learn nothing else from this article, learn that it’s okay to ask questions and to avoid triny to do everything on your own. No matter how smart or talented you are, you will need help from more experienced investors. Fortunately, help getting started in real estate comes in two forms: from mentors and professionals.
Get a Investment Mentor
When athletes climb Mount Everest, they need a sherpa: a local who has climbed the mountain before and knows the territory well. The same is true of new investors. Your best chance of building a business that will lead to lasting success is to operate with the guidance of someone who has done what you want to do.
It is best to find a mentor who has already achieved what you seek to accomplish. One thing to consider when looking for a mentor is asset class. If you want to strike out in multi-family, someone who focuses on self-storage may not be as helpful to you as an established multi-family investor. Your mentor can be an invaluable resource for navigating your first deals and checking your blind spots. Even if you invest a great deal of time in your education now, you may not know every city ordinance of your market, or the nuances of how to project costs, screen tenants, or perform any of the other of hundreds of small tasks an investor must get comfortable with.
A mentor with a substantial amount of time in the real estate industry also offers you the wealth of their experience. You can learn from their successes as well as their past mistakes. Learning from your own failures is expensive. The best investors learn from the mistakes of others. If you are still seeking your mentor out, check out The Real Estate Nerds Podcast to learn what kind of investors are out there and how they have benefitted from their mentors.
Have Trusted Investment & Legal Professionals By Your Side
Going into real estate without professional assistance is an easy way to lose money. At a bare minimum, we recommend having an attorney and CPA on your team. When you use a full-service real estate firm like Royal Legal Solutions, we can help you with structuring your business, protecting yourself from lawsuits and their enormous costs, and understanding which legal structures will support you now and in the long run. Remember, we don’t just know the law: we are also investors ourselves. You will get to benefit from both areas of expertise.
The experts at Royal Legal Solutions are happy to help you. You have a lot to do for your business, and that’s what you should stick to. Whether you need help with forming an entity to protect your real estate assets, or simply a second look at your deal from a legally trained, experienced investor, we can assist you. Contact us today to get your real estate business started on the right foot.