How can you get started in real estate without paying any money to learn?
“But wait, you say. There’s books and podcasts and lots of information online. I can get everything there. I shouldn’t have to spend anything to learn”.
What actions have you taken so far with the information you’ve consumed? How many deals have you done?
If you haven’t closed any deals yet…. You’ll soon find that you’re gonna pay in some way to learn the business.
But there is good news! You have three choices as to how you invest your money:
Choice #1: Lose money
How many investors end up taking this route? This is the path my husband and I chose 17 years ago. We read a few books on real estate investing and we did go to an inexpensive seminar which would have the equivalent of a Podcast… before Podcasts existed. We took our newly gained “knowledge” and found three seller financed properties. We were super excited!
What could go wrong? Turns out, a lot… when you don’t:
- Understand the numbers of operating a property to negotiate the right terms
- Know how to be a landlord
- Realize the market dynamics and implications of the different types of tenants
- Know how to appropriately fill vacancies
- Understand how to manage expenses
- Have an exit strategy
So we lost — no — we PAID around $25,000 to learn the hard way. This was $25,000 we didn’t have. This got added to our existing debt and put us in a deep hole….. That we had to climb out of. Yes, you might have an advantage because of sites like BiggerPockets and local real estate networking clubs. Perhaps your cost will be less but there’s still going to be a lesson or two for you to learn.
Choice #2: Give up income
What about the new investors that go work for an experienced investor or in a real estate related field in order to learn the business? You might be thinking “aren’t they getting an income?” The better question is “how much money are they giving up to learn?” Obviously, this depends on each person’s current career or skill sets but it’s likely that someone who takes this route gives up a higher income in the short term in order to learn.
I recently met a fellow investor who took this route. This person was having a tough time breaking into the market as they didn’t have a network and experience. After being shut out of being on the “buyers list” for wholesale deals and trying for several months to break in this newbie investor ended up going to work for the wholesaler. In exchange, this person gave up a significantly higher salary and prestigious career to pursue an investor education. In the long-run they will have built something more sustainable than climbing the corporate ladder but there was still a COST to learn.
Choice #3: Pay someone
Are you thinking of those late night television infomercials with some cheesy guy showing off his Ferrari (rented by the hour) and mansion (also a prop)? Please. Can we all agree that real estate is not a way to get-rich-quick? There are legitimate education programs out there from other investors that provide step-by-step systems to fast track your development. But you have to pay for them. Why? Because that information has value and the person who created the training program invested to learn and achieve their own success. He or she worked hard, made mistakes, lost money, gave up time, etc. Why would you expect that information for free?
I see new investors ask questions like “does xyz’s real estate program really work?” or is “abc really a scam?” It’s good to do your due diligence and maybe speak to former students and understand what has worked for them…. But it’s also important to understand that one of the biggest indicators of “does this program really work” is going to be up to you.
- Are you willing to take action?
- Will you follow the recommendations and process?
- Can you stay committed when things get hard?
Instead of asking why you should have to pay anything… ask yourself, how badly do you want to succeed as a real estate investor? Choose which path will you take in order to get the education you need. Then — go do a deal!