31: Seven Steps to Your First Real Estate Deal in 2019
Happy New Year! Thanks for joining us for another trip around the sun!
To start this year off right, here is our list of actionable steps to get your first (or next) deal done in 2019.
ONE: Figure Out Your Goals
Before you do anything else, take a step back and ask yourself "what do I want to get out of real estate?" There can be a lot of answers to this question, but here's an easy place to start: do you want to be active or passive? And do you have cash or not?
There are a million ways to accomplish your goals in real estate, but here are a few types under each goal and episodes that go into detail on each one:
Active Investment Options
Buy and Hold Investment Options
TWO: Get Educated
Listen to podcasts, read books, participate in forums, look at deals, network. Do everything you can to gain enough knowledge so that you can speak the lingo and understand what makes a good deal. There are unlimited resources available to a new investor that all you have to do is search and put in the time to learn. A great resource for this is Sam Rust's episode where he lists all the education sources he used to close on a 64 unit property within 8 months of starting.
THREE: Figure Out What You Can Buy
This looks different for each type of investing, but figure out what you can afford. If you intend to flip houses, you will need to know how much cash you have access to, which can be through partners, investors, your own cash or hard money loans. If you intend to buy and hold, make sure you have your bank financing mostly in place before you start looking. This doesn't mean you need to have every detail nailed down, but you should know how much you can afford and be sure you can close if you get an offer accepted.
FOUR: Research Your Market
This can mean the market you live in, but it doesn't have to. We would recommend looking in your local market first to see if the numbers work, but if they don't work for what you need find another market that does! Here are some basic things you should know about the market you are investing in: how many homes are being listed and sold, the average price for the type of property you want, the average rent amount, the economic drivers and the average income.
FIVE: Look For A Deal
This step is most likely going to involve a few different methods and don't give up when you don't get the first deal you like. A few different ideas to find deals are: connect with a local agent (we can help with this, click here!), network with other investors, mail letters to people who are likely to sell, get in touch with a wholesaler and look daily at online listing sites.
SIX: Analyze (a lot!)
Start analyzing every deal you can. The more practice, the better. Get online and start running numbers on every potential deal you can find. When the right deal comes through, you will be much more likely to know it.
SEVEN: Make an Offer
Congrats, you found a deal that makes sense! Now it's time to make an offer. You need to write your offer with the intention of giving the seller confidence that you are going to close. This might mean including a pre-qualification letter, proof of funds or making your offer clean by only using the contingencies you need.