As a corporate couple with two young children, my husband and I led stressed out lives. I remember one instance where I was on a conference call while pumping in my office which had newspapers that covered the windows and thinking to myself, is this why I worked so hard for 17 years to build a career? After I quit my job and moved over to full time Real Estate Investing, I used my skills as an Engineer and leveraged my knowledge on building systems, teams and processes that I had acquired while climbing the corporate ladder to exponentially grow my portfolio. It wasn't until I was celebrating my son's third birthday, that I remembered that I had put my first BRRRR property under contract on his first birthday and that it had only been two years. In my recent Biggerpockets podcast interview, I have talked about all of the following and much more. I'd love for you to check it out and also give me some feedback on what resonated with you over on instagram at @openspaceswomen.
Here are the four key steps you can use to move forward in Real Estate investing so you can achieve financial freedom.
Start with your “why.” For me, it was a need to be with my kids. This need was bigger than any analysis or excel spreadsheet I could make to convince myself otherwise. It was bigger than my six-figure income. It was bigger than the shame I thought I would feel if I failed at this and was known within my professional circle as a mom who “wasted” her career. It was VISCERAL. Every fiber of my being told me I had to be around my kids.
Taking a leap of faith begins with the conviction that your life cannot continue the way it is currently. With faith, you can make a change and be successful at it. As my coach would say, “Ask yourself, ‘What could go right?‘”
There are many ways to invest in real estate, and I will be cheering for you when you go buy your 1,000-unit apartment building. But most multifamily investors didn’t start that way. Most started in a way that allowed them to take lower risks first.
Here are my 3 S’s for defining your property avatar:
Small: Start with something small—for example, a 3-bed/1-bath single family row home in the city or a small ranch in the suburbs. A smaller investment is a great playground for a new investor. It allows you to learn from your mistakes while limiting your risk. Figuring out how to find a BRRRR-able property is like riding a bike. And it is much easier to learn how to ride a balance bike at first.
Simple: Find something simple. It may not be the best deal of your life, but it will help you get started with a lower-risk investment. Remember, this is your first deal—not your only deal. If you have no construction experience, I would recommend going with a cosmetic rehab. I know you’re thinking, “Yes, but shells are better deals.” I agree, however, they’re also going to be a steep learning curve on working with contractors, permits, etc. To learn how to BRRRR, start with a simpler project and then move your way up to a more complicated one.
Scalable: I get emails every day from investors who are just starting out. They want to know how to negotiate a FSBO, how they can do a “subject to” deal, how to buy a property with a cloudy title, etc. They’re looking to find that pair of couture shoes at a discounted price. Guess what? You don’t need those shoes—they’re hard to walk in and give you a backache at the end of the day. What you need is that good pair of sneakers you can take your kids to the park in and that you can re-order online when they wear out, all without going through the hassle of hunting for the next deal. The property avatar would be something you can pick up again and again—not something you have to figure out every single time. This is the way to build a large portfolio without losing your mind and having to learn something from scratch on every single deal.
A: Avatar: Use my 3 S’s to define your property avatar.
In listening to stories of people who have used creative ways to start their real estate careers off, you’re forgetting that most investors actually start simply. They define what works for them and just go after it. It may not be a needle in the haystack that you find, and that’s OK.
B: Blinders: Now put your blinders on!
Put your blinders on and ONLY focus on your avatar. This is going to be tough when someone comes to you with an amazing multifamily offering that people are jumping through hoops to put offers on. But remember, there is no such thing as the best deal—only what’s best for you at the time!
L: Leap of Faith: Remember your “why,” and take a leap of faith
The leap of faith begins with your "why" which was the first step that we tackled. Once you are sure of why you are doing some thing, it is much easier to stay motivated. But at the end of the day, it is so important to take action.
E: Expectations: Manage your expectations
I know it took everything you had in you to take that leap of faith. You finally felt relieved and proud that you made an offer on a property. However, it is important to remind yourself that not everything is in our control. The current market cycle is competitive and multiple people are putting offers on properties.
But once you take the leap of faith, it isn’t time to rest. It might take multiple tries before you get your first deal under contract. Manage your expectations. It is great to get excited about a deal, put an offer in, and start seeing yourself as an investor. But go in it knowing it might not work out on the first few tries.
Follow these four steps, and you are on your way to being “ABLE” to get out of your analysis paralysis and get your first deal under contract.
Last but not least, I have learned over the course of the past few years that risk-taking ability isn't a talent we are born with. It is a skill we can develop over time. And with practice just as I got better with my risk taking abilities, so can you. Quantitative risk management is the process of converting the impact of risk on the project into numerical terms. This numerical information is frequently used to determine the cost and time contingencies of the project.
Say you’re analyzing a BRRRR deal, and you are afraid your numbers are around $10K off. If your worst-case scenario becomes a reality, consider that $10K an investment in your education—you’re unlikely to make the same mistake again.
Here are two personal examples:
Here are some other excuses to putting off investing and how to get over them:
I'd like to leave you with one thing, the amount of growth you can achieve is dependent on how far away you are willing to step out of your comfort zone. So get out there and try to push yourself to find your fullest potential!
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