Let’s get a little crazy, shall we?
No, not in the sense of “run naked through the woods” kind of crazy.
That didn’t turn out so good last time.
No — you came here looking for property investment tips, but I don’t want to give the standard “you make your money when you buy” or “be sure to use an investor friendly CPA” tips. There are plenty of posts for that.
I want to get a little more unconventional.
5 Property Investment Tips
The following five tips might seem a bit crazy, absurd, or flat-out wrong at first glance. However, I believe these property investment tips are some of the most important I’ve ever shared, so I encourage you to spend some time digging in.
I also would like to ask one two quick favors. There are “social share” buttons all over this page, so if you enjoy this post, could you do me a solid and share this post on your favorite social network? And secondly – I need to beat my good buddy Scott with the most comments on a post, so I’d appreciate you leaving a comment at the bottom of this article! After all, he currently has the #1 and #2 most-commented posts on BiggerPockets for the past month!
We can’t let a kid from Vanderbilt beat me.
With that- let’s get to the tips! We’ll start with one that is a bit controversial…
1. Don’t Learn Too Much
Seriously, you’ll drive yourself crazy and never get anywhere.
You see — there are WAY too many things to learn about when buying an investment property.
Flipping. Renting. Landlording. Mortgages. Subject To. Lease Options.
My head already hurts.
Instead of trying to master everything, take the “Tim Ferriss” approach and learn just what you need to know in order to get your goal accomplished.
I promise — the rest you will learn along the way.
For example, let’s say you want to invest in small multifamily properties. Great! Then why the *$&# are you reading about wholesaling? Stop it. Now.
You don’t need to know everything to get started with something.
There will be plenty of time for learning those things later.
Now, what if you don’t know what you should learn?
Good question, and something a lot of people ask. After all, you don’t know what you don’t know, and everyone starts at zero.
Related: Does Education Paralyze Us? An Argument for Action in Real Estate
If this is you. Focus on learning as much “general” information as possible until you decide what you should focus on. Then focus!
I recommend listening to as many episodes of The BiggerPockets Podcast as possible, not just because of the charm and good looks of the hosts (ahem…), but because of the variety of stories you will hear. You’ll learn from those who are just getting started, from those who have been investing for decades, from flippers, from wholesalers, from landlords, and from those with expertise on so many other niches and strategies. You’ll get real-world information about the different kinds of investments from those actually doing it everyday! If this doesn’t help you identify what niches or strategies you should focus on, nothing will.
In addition, I recommend reading through The BiggerPockets Ultimate Beginner’s Guide to Real Estate Investing, which you can read online right now.
Let’s move on to another unconventional property investment tip…
2. Most Property Investments Are Not Right for You
What is the best kind of property investment?
There isn’t one. But there are a lot of bad ones — for you.
There are millions and millions of properties, and the VAST majority are not right for you.
You (yes, you with the face. I’m talking to you!) have certain talents, skills, and gifts that no one else has. That’s right: you are an original. No one else on planet earth has the same combination of experiences and natural born abilities as you.
I don’t say this to make you feel good; if anything, it makes you kind of a weirdo.
However, that unique set of experiences and abilities make certain types of investing better or worse for you. As we talked about above in the first of my property investment tips, you need to focus on the ones that are right for you.
What is the right path?
Hard to say — I’m not you.
However, ask yourself these questions… it might help you decide:
How much free time do you have?
How much money do you have?
Are you “handy?”
Are you good at managing people/contractors?
Do you like being involved in your investments?
How quick do you need to build wealth?
Are you looking to quit your job?
What is the real estate market like in your area?
Then, as you learn more of the “general knowledge” about real estate, pay special attention to what niches or strategies work best for you, your goals, and your skills.
3. Having a Lot of Money Can Hurt You When Investing in Property
Want to know what scares me more than almost any other email I get?
When someone tells me “Hey Brandon, I’ve got $350,000 to invest, and I’m ready to jump in!”
Slow down there, shooter.
I’m happy that some people have money. They’ve probably worked hard — or were born into the right family. They are doing the right thing by wanting to grow that wealth. And real estate is a good way to do it.
When you have a lot of money, buying real estate is very easy. And that’s dangerous.
Real estate is a risky business when you are first starting out, and having money can make it even more so.
You see, when you are investing without a lot of money, you are forced to use other people’s money, and other people are usually better at being objective in a deal.
For example, let me paint a picture for you:
Let’s say you find a nice single family home you want to buy and rent out. The purchase price is $100,000. You really like the beautiful front porch. The kitchen is gorgeous. The property is in a little …read more