I have to show you something real quick...
That's a Purchase Agreement from December of 2016, when I purchased My First Property.
WOW...I can't believe it's officially been 2 YEARS since I started investing in Real Estate. And it's been a crazy roller-coaster ride so far, to say the least. Here's a quick recap:
I bought My First Property from a turnkey company in December of 2016. Everything went "smooth" for 11 straight months, until an unexpected vacancy and unacceptable management derailed the investment. With $16,000 in repairs needed, I decided to sell it.
I bought My Second Property in March of 2018. I bought My Third Property in July of 2018. Then I invested in an 80-unit multi family property just this past October.
I've had my fair share of bumps and bruises along the way. Tons of challenges, frustrations, and second guessing. And I know there's plenty more of that to come. But, I'll continue to learn every step of the way. And now it's my job, to share my knowledge with YOU.
Here are my TOP 8 TIPS after my first 2 years in Long-Distance Real Estate Investing:
1. Network, network, network
"Your Network is Your Net Worth"
I live by this and truly believe it. The people you keep closest to you, create such a profound influence. You've got to be conscious of that and surround yourself with the best and brightest.
I've met some of my best friends through real estate and I couldn't imagine my life without them. So, use the best real estate networking tool out there, Biggerpockets, and connect with locals that are just as ambitious and driven as you.
Set up local events and meetups to chat with novice and experienced investors, agents, contractors. Business and LIFE are all about relationships.
2. Master How to Analyze Property
The basics of investing start with understanding How To Analyze Rental Property. You MUST know how to quickly filter through potential investment leads, determine all expenses, and projected rents. You need an understanding of flood planes, school districts, neighborhoods, taxes, and much more.
If you're looking to acquire a property, I challenge you to start analyzing 1 property a week. Then 1 property a day. Repetition will get you to a point where analysis becomes clockwork, so when that great deal pops up, you can JUMP ON IT!
3. Location, location, location
When I first started investing in real estate, I didn't realize the importance of location. I just saw the numbers on paper, and assumed if the numbers on paper worked out, the investment would work out. Well, I WAS WRONG.
Having a great real estate investment requires so many factors...and location is a huge one. You must understand neighborhood crime levels (I use Trulia crime maps), school districts, neighborhood classes, and neighborhood amenities (is there a Starbucks nearby?).
Understand what type of tenant lives in the neighborhood (check out Neighborhood Scout). After all, your tenant is the primary source of income.
4. Interview and Vet Multiple Property Managers
I've experienced working with the wrong people. And it SUCKS. Don't be like me. My first property manager decided to just NOT tell me that one of my tenants left. I only found out when my friend drove by the property and spotted a lock box on the front door. Then, I ran into $16,000 in needed repairs as the property manager never checked up on the property throughout the year.
But, I take full responsibility for hiring the wrong people. And I learned real quick how to never make that mistake again!
The key is to interview multiple property managers and really truly vet them. Check out my post on How to Hire a Property Manager.
5. Always get an inspection
Ahhhh...I was so naive a couple years ago. When I bought My First Property I admittedly was a little too trusting. In buying the property all cash, I didn't need to get a property inspection from a 3rd party company. Unless you really understand construction, rehab, and can see the property in-person, I'd say: ALWAYS GET AN INSPECTION!
An inspection can and WILL save you from unexpected issues that'll cost you $. Lots and lots of $$$.
6. Don't ignore issues on the inspection report
Well, I learned early on about the consequences of not getting an inspection report. But, I guess you could say I didn't learn the whole lesson.
I had a relatively major issue pop up on an inspection report once...standing water in the crawlspace. I had a mold guy go out there and check it out, but I never decided to get a foundation expert to assess it.
I ended up brushing it off the whole thing and tried to push it out of my brain because emotionally I really wanted the property and the numbers looked AMAZING! I eventually bought the property.
Now, it's biting me in the A$$. Bottom line: don't ignore big issues on the inspection report. Take care of them or walk away.
7. Visit your market and meet your team in person
Some long-distance real estate investors might disagree with me here, because technically everything can be handled remotely. BUT, having flown to my market multiple times, I can say it's an invaluable experience.
You'll have a HUGE advantage if you take the time to get your boots on the ground, meet connections face-to-face, drive through neighborhoods, and really understand the culture and direction of the city. Real Estate Investing is a relationship business and meeting your team IN PERSON strengthens those relationships. Sitting down with your agent and property manager for a nice lunch goes a long way. Trust needs to be built if you're going to invest from afar, so get out there and understand your team on more of a personal level!
8. Keep a Positive Attitude and Move Forward
You're going to fall down. And you might even get kicked while you're down. But, that's not only real estate or business...it's life.
Being able to get back up from every challenge, move on, and LEARN is crucial to your development. This is much easier said then done, but get it in your brain, so when your next pitfall comes up, you're ready to move forward and grow.
Well, as a final conclusion here, I've got some last things to touch on:
A LOT has happened in the last couple years. Literally, my life has changed. My mindset has changed. My understanding of investing has changed. By the way:
-I'm nowhere near "Financially Independent." This is a LONG game. I'm 2 years in. Let's chat in 20.
-I'm continuing to learn each and every day. Books, Podcasts, and Meetups. Never stop.
I'm excited for the future.
Reach out if you have any questions, I'm always happy to help in any way possible.