First Steps to Real Estate Investing Success?
This has to be the most asked question there is for new real estate investors. How do I get started, where do I start? When should I start? There is so much noise cluttering the sound waves, it can be difficult. THEN add on top of that a new investor may feel, anxious, and not confident enough so they think buying a 3 day course, attending a conference and “networking” with dozens of other new real estate investors is necessary, so the DOZENS and dozens of “Gurus” selling their courses can be overwhelming to say the least. At Blue Bay Capital, we very much want you to be successful. We want this because when you are successful we will eb successful. When you succeed we will succeed. And when you struggle we wan to be the one walking beside you helping you through the struggle.
It all begins with an idea. You want to become a real estate investor and now you are ready to get serious. There are a few things that you should do BEFORE going out and getting ANY property under contract. As a private lender throughout Florida and based out of the greater Tampa Bay area, we are ready to provide you your capital to purchase your next property. However you must be aware there are pitfalls to this business, it is not easy, and the risk is indeed significant. However the reward can eb even greater for you and your family. We believe and have seen how rewarding a successful real estate investing career can be. Investors like yourself, living the life they want, when they want how they want. It truly can be called freedom. You must be willing to setup your business properly though. Here are our recommendations to be successful and get your first deal across the finish line.
Shiny Object Syndrome …
Know your mission. As a Special Operator and Green Beret in the US Army, knowing my mission was the very first step to success. Without it we had nothing. We needed to know our target, know our methods of infil, execution, and exfil, and what defined our mission success also known as the commanders intent. First step do you know your “Commanders Intent”? While you may not have a commander per say (unless you are married to Household 6 *inside joke) then by default YOU are your own commander. What is your intent? What defines mission success? What type of “mission” will you venture into? Here are a few examples of “mission” types as well as mission defined success?
Wholesale: This method of real estate investing simply means you sell properties, at wholesale prices, to more experienced and cash heavy investors. Wholesaling is the easiest, least cost intensive, side hustle friendly aspect of entering into the real estate game. Very little capital, primarily marketing, is needed. Even the most successful real estate investors I know of that started out using wholesaling to get started still use this method to generate quick cash and fast profits. If you can learn this method and perfect it, automate it, and streamline it you will have a nice revenue stream you can count on for years to come.
BRRR: The “Brrrrrrrr” method as it is called is Buy, Rehab, Rent, Repeat. Its for the real estate investor who is trying to leverage their ability to get bank loans and maximize the time frame to build their own rental portfolio, without having to get most costly money. The BRRR is a great tool for new or existing real estate investors who are also military members. As a veteran of the Armed Forces they have access to the VA program. This is a phenomenal tool that RE investors can use to build their own portfolio. You can also combine the VA loan with a 203K streamline or regular loan to even buy properties in disrepair to add even more value!
Fix & Flip: Fix and flipping has been made very popular in the last two decades because of TV channels like HGTV. Their shows, declaring the dramatic events tied to rehabs coupled with sucking the viewer into the story of the shows host, as well as some very nice profits, have created a fix and flipping phenomenon. Combine this with the dozens and dozens of gurus that have popped up all over the landscape, the term “Fix & Flip” has become synonymous with exciting, rich, risky, and entrepreneurship. Fix and Flipping is what it sounds like. You fix a piece of real estate and then you “flip” or quickly sell the property for a profit. I say quickly because in the thinking of traditional banks, whose customers take out 15, 30 year loans buying and then selling a property in 5 years or less may not make sense to them. They consider it highly speculative and risky, thus the term “Flipping” was added to fixing. Also you may hear people say the "Flipping real estate is wrong" or illegal.” This is specifically talking about flipping paper or wholesaling. I can assure you it is not illegal, and many people and licensed professionals ie; attorneys, facilitate and help with these transactions. Where this stemmed from (in my humble opinion) is the realtor industry did not appreciate being cut out of real estate transactions. In a wholesale transaction, the buyer of a property chooses to instead sell their interest, which is the signed purchase and sale agreement between them and the seller, to another party. They do this for an increase in price to the end buyer, and that increase can be for whatever is deemed reasonable. Fix and flipping can be more risky than any other RE investing business. It is highly recommended that you understand construction, though you do not need to be a licensed GC. You must have capital. And you must have enough capital to buy the house outright, pay for the monthly expenditures (taxes, water, electric ect..) pay for the renovation (labor and material) as well as feed your family and pay for your own personal needs. As you can see it can be very hard to get started in this method without a large bankroll behind you. May investors seek private money. This is money form wealthy people that they know and these people have a level of trust and sophistication to evaluate a deal, and then back you the RE investor for that deal. We can get started in the money aspect at a later time I just wanted to share with you one method of accessing capital. Another method is to borrow hard money from a company such as ours. You can submit your loan application below!
4. Rentals: A RE Investor may very well decide that accumulating a rental portfolio is the way to go. This can be done by simply buying properties off the open market (also known as the MLS, Multiple Listing Service) the other method is acquire rentals is to buy properties in disrepair, fix them up and then rent. This is the BRRR method with one slight difference. The commonly understood investor in the BRRR method is someone who will live in the house for about two years. After that they buy a new house begin the process over and then rent out their old house. The rental strategy I am talking about now is someone who lives in their own house and then simply buys property to rent them out to others. Slightly different but the methodology is the same.
Whats Next ...
In our next article we will dive into cash requirements to invest into each type of investment strategy. Please connect with us to stay in the loop on new loans we are offering and how we can help you better define your mission success!
