Today it’s marketing your latest flip. Tomorrow it’s building out your cash buyer list — and that means lots of research and lots of networking. The next day? You’re on site, checking out where your most recent rehab is, schedule-wise. And by day four you’re onto the next deal, navigating financing, agents, lawyers and inspectors to get this property to close ASAP.
Ah, the life of a real estate investor. A life where no two days are ever the same. A life I wouldn’t trade for anything.
But, still, it’s a life not without challenges. Because real estate investors wear so many hats, there’s seemingly endless information to absorb and leverage. You’ve got to be a pro at tons of different pieces of the puzzle, from marketing and accounting to construction and staging — or, at the very least, you need a solid enough foundation to tap the right experts for the right projects at the right time, every time.
And that means getting the right real estate investor education.
I’m not talking about a degree from a fancy (read: expensive) college or university, or investing tens of thousands of dollars in individualized training and support. What I am talking about is getting the right information and insights to ensure you’re on the right track from day one. Because, no matter your specific path or end goals, you’re going to have to have and be able to leverage some essential skills, tactics and know-how to be successful in this industry.
At the top of my list? These three essential areas every real estate investor needs to understand going in. While they aren’t the only things you’ll need to master as you grow your real estate investing business, they are critical, foundational pieces that will ensure you get off on the right foot.
#1: Understand That THIS Is A Numbers Game
Real estate investing is all about the numbers — more specifically, it’s all about figuring out which deals maximize your revenue while minimizing your risk and investments. But don’t worry, this isn’t a guessing game or “go with your gut” scenario. Instead, you’ll leverage simple systems and equations to determine your inputs, potential earnings and everything in between.
Paired with insights and pro recommendations from your real estate agent, accountant, attorney and other advisors, you’ll be able to assess the numbers and determine which deals make sense and which deals aren’t worthy of your time. By staying consistent with your calculations and how you weigh and assess individual deals, you’ll be able to make smart, strategic decisions every time.
#2: Diversify Your Portfolio
While chances are you’ll start your real estate career with one type of investment — wholesaling, for example, or rehabbing and flipping properties — you want to consider serious diversification once you get your feet wet. This will ensure you’re expanding your business, your know-how and, most importantly, your earning potential. Think about it: would you dump EVERY penny you have in ONE stock or investment fund? Probably not. So why do that with your real estate portfolio?
My advice in this arena is simple: I recommend mixing long- and short-term investments. By doing that, you’ll create both mega-paydays — those huge windfalls of cash from successful rehabbing and wholesaling — as well as beef up your passive income flow. Having both income sources is powerful. You’ll be getting those checks every single month from your buy and holds while, at the same time, getting big payouts from your flips.
#3: Be Clear On Funding Sources
If you’re going to rehab a property or invest in a buy and hold, be sure you’re very clear on funding sources and options going in. Every bank, lender and alternative funding source has their own unique set of parameters, processes and minimums. Knowing what you’ll need and what sources will, ultimately, consider financing requests like yours will ensure you go into each deal ready for action. If you don’t understand the funding landscape before you start making offers, you could wind up with an incredible deal on the table but without the cash to make it happen.
The easiest way to get everything together fast? Make a simple grid that lists out potential funding sources — i.e. private money, hard money, HELOCs, mortgages and so on — along with the types of deals each individual lender will consider, plus any parameters or minimums you’ll have to work within. For example, some lenders may have minimum credit scores for borrowers, while others will only lend for six to 12 month periods. Keep everything in this master chart and refer back to it whenever a new deal crosses your desk.
What’s Next: Keeping GOING
Your next step? Start with these three takeaways and never stop learning. Real estate investing is all about growing, improving and bettering yourself and your business. Whether it’s enrolling at the Nick Vertucci Real Estate Academy (NVREA), stopping by one of my workshops or seminars happening all over the country or, simply, networking, studying up and absorbing everything you can about your local market, your goal should be to learn, learn, learn each and every day.
I’m more than a decade in and I still try and carve out time to catch up on the trades and dig into the markets every day. That, paired with the constant networking I do, the events I attend and the workshops I lead, have helped me evolve into the real estate investing expert I am today. But no matter how big my business gets or how many programs I teach, I’ll never stop learning and growing. Because this is an industry that changes by the minute — and the minute you stop is the minute you get left behind.
If you’re ready to take your real estate investing education to the next level, I encourage you to check out the NVREA schedule and see when the next class is enrolling. Besides digging into these four key topics, we’ll unpack everything that comes with being a real estate investor from finding the deals to funding the deals to flipping the deals. No matter what approach you’re tackling, we’ve got something for you — and then some. But, for now, focus on making the most of these four principles and commit yourself to learning and growing for your entire investing career. I know I have — and I know it’s served me very well.