Before you start investing in real estate, you must know about the basics or fundamentals of real estate basics. Let’s get into the details:
Get your real estate investing education
The real estate business is a solid and proven business venture and not an
MLM or gets the rich quick type of scheme. So, you need basic knowledge before you jump into investing. A solid foundation is key to a long-lasting business.
Sources of real estate investing education
Don’t worry; you don’t have to pay hundreds of thousands of dollars to learn the real estate business. Here are some trusted and low or no-cost education sources:
1. Books
Educational books such as these are fundamental in gaining an education in real estate and perhaps the most popular learning method for potential investors.
2. Blogs
Blogs are an amazing source of information, and you will find education discussion on every side of real estate investing.
3. Mentors
Gaining knowledge from a mentor is a popular way to gain a sound education. The same goes for real estate education. You don’t have to pay to gain knowledge from mentors. There are thousands of experienced local investors out there who are willing to give you sound advice in exchange for a drink or two at a local bar.
4. Podcasts
Podcasts are one of the newest innovations and offer valuable information, including real estate investment.
5. Real estate mathematics
You don’t have to get a college degree to understand real estate math. Most of the math is basic and no more complex than junior high. Here are some basic concepts and math formulas on real estate investing;
6. Income
This math is the easiest one. Income is the amount of money that comes in from a property. For example, you own a rental house. The house rent is $1500 monthly, plus the tenant also pays $100 for the garage. So, your total income is $1600 monthly from the house.
7. Expenses
Expenses are your cost of business. For example, you have to pay $500 every month to the bank to repay the debt, the garbage bill is $50 per month, and the maintenance cost is $100 to $150 every month. So, the total expenses are around $700. Remember, there are other expenses you have to face as a real estate investor, including management, insurance, taxes, capital expenses, holding costs, and various others.
8. Cash flow
The amount of money you have leftover at the end of the month after expenses are known as cash flow. Subtract the total expenses from total income to get the cash flow.
1600-700= 900
So, your total cash flow from the house is $ 900 every month. Here are some other math equations Return on Investment,
Return on investment also known as ROI shows you what interest rate you are making on your money, per year. As a simple example, if you invested $250 and made a $250 profit on that investment (over one year), then you have made a 100% return on investment. The actual calculation for Return on Investment looks like this:
Real estate is investing mentors. Find an organic real estate mentor You don’t have to pay to join classes or seminars and learn about real estate investing. An experienced real estate investor might choose to help a beginner like you for several reasons having someone with similar interests to talk with, passing on their legacy, the potential to make future deals, and so on. Try these tips for building these relationships:
9. Focus on building a relationship
Your mentor does not have to be a big businessman. Your mentor could be a local homeowner who owns a half-dozen rental. Seek out individuals who are doing what you want to do.
10. Make yourself valuable to the other person
Make yourself valuable to your mentor. What can you offer him? Maybe you are good at a building website, so help him build his rental website. Or maybe you could help him clean up a vacant unit.
11. Don’t expect anything in return
Don’t expect anything in return. Provide value and in return, you may receive something back.
12. Think win-win
Don’t only focus on what is in it for me. Your mentor is a successful businessman or woman, but that doesn’t mean you can’t help them become even more successful.
You have to prove that you are worthy of their time:
Most investors will help, but only when you show that you are worthy. Your mentors need to know that you will not be a huge waste of their time and effort. Prove yourself to the mentor.
13. Fear
Can be a huge obstacle Fear is a natural part of life, and as a beginner, you may have fear and worry that you will not be a success. Here is how you can overcome your fear of investment:
14. Work hard
Successful real estate investors work hard, and you have to do the same. Develop a plan and work that plan every day.
15. Commit
You need to stay committed and focused. Otherwise, no class, course, trainer, or mentor could get you close to your goals.
16. Start participating
Join various online real estate investment forums and participate, ask questions, and connect with others. Interactions are part of an investor’s life and a fast way to overcome your fear.
17. Learn the lingo
Know the lingo of the business; otherwise, you will always be afraid to open up and express your opinion.
18. Learn the concepts
Fear is often a result of being unclear. So, spend more time learning.
19. Watch others
Connect with other investors and build relationships. By assimilating yourself with successful investors, you will naturally begin to pick up on the traits that make them successful.
