You’ve decided that you’re finally ready to take a bigger role in securing your financial future — you’ve decided to begin investing in real estate. Great! Before you jump all-in head first, take a deep breath and let’s have a quick chat about what the first year is really like and how you can best prepare yourself before you begin your investment journey.
Biggest Mistakes Made Year One
Although the goal for many people is to have their investment properties develop into a continuous income stream, don’t quit your current job on your first day investing. As the old saying goes, ‘a bird in the hand is better than two in the bush.’ Developing a strong investment portfolio won’t happen over night and you’ll need to ensure you still have income coming in while you’re building your dream.
After all your research, I’m sure you’ve discovered by now that, while you can get financing for your first property, you’ll still need a cash reserve for your project expenses. A good rule of thumb is to always include an additional 10 percent to your construction reserve funds, that way, when issues arise, you’ll be able to handle them without impacting your living expenses or lifestyle.
The biggest mistake new investors make is to go the journey alone. That’s a seriously risky path to take! Do your research and connect with a real estate investment group. There is no reason for you to start your investment journey alone when an investment group, like Simply Do It, is available to teach you and guide you through the entire process. We’ve already made the big mistakes….so why put yourself at a disadvantage? Work with an investment group who will direct you around costly mistakes and will share all of their best practices with you along the way so you’ll be able to lay a strong foundation for the long-term growth of your investment portfolio.
Our guide for ‘How to Get in the Game of Investing’ outlines everything you need to know to prepare yourself for your investment journey and is a great reference to keep on hand during your first year of investing.
How to Prepare for Year One
The first year is definitely the hardest. It will test your mettle and challenge your way of thinking, but don’t give up or take unnecessary risks! Persistence and education are the keys to being successful. If you get concerned or aren’t sure what the right answer is for an issue that pops up on a project, reach out to your investment mentor for guidance….that’s what they are there for after all.
As we mentioned before, always have at least 10 percent more than your project budget on hand at all times. This way you’ll be able to handle just about any emergency or issue that comes up and will be able to keep your flip or rental renovation project moving ahead without breaking the bank.
Take time to really vet the investment group you work with. Ideally, you’ll be working with them for a long time. Not only do you want to work with a group that has a prove track record of success and great reviews, but you should also look for a group that will teach you along the way. Teaching our investors is the foundation of how Simply Do It approaches real estate investing. We believe a better educated investor becomes a stronger, more savvy investor who will be able to build a strong portfolio that will withstand the ups and downs of the economy for years to come.
When you’re ready, we’ll be here! Just contact one of our mentors about getting started on your real estate investment journey and we’ll be with you every step of the way.