The ultimate guide on real estate investing for beginners: How to become a real estate investor.
Of course, becoming a real estate investor is not as complicated as many people think. In fact, it doesn’t take much to become a successful one. For this guide, we are going to present a few steps that are vital to turn you from a beginner level investor to an expert level investor. Moreover, a few of them are suggested by one of the best and most outstanding real estate investors ever, Robert Kiyosaki. There is no doubt that the author of “Rich Dad Poor Dad” has managed to build an empire in the real estate investing business. So, stick around to get into the minds of successful real estate investors.
Related: 10 Best Real Estate Investment Books to Read in 2018
Step #1: Get rid of the “saving” mentality
You want to know how to become a real estate investor, yet you do not pay attention to the main keyword here: Investor. Sure enough, you’ve been told since childhood that if you want to afford something, you must save money. But, what if we tell you that it’s not completely true? Even though it might sound like nonsense to you, to Mr. Kiyosaki, it is not. As a matter of fact, Mr. Kiyosaki suggests that the saving mentality is what keeps the poor poor. On the other hand, the investing mentality is what makes the rich richer, especially, if it’s about real estate investing.
To Mr. Kiyosaki, the number one reason he was able to accumulate wealth through real estate is by learning how to become an investor rather than a mere money saver. The whole philosophy behind this concept is making your money work for you instead of you working for it!
Step #2: Real estate education comes next
Now that you’ve decided to become an investor rather than a money saver, it is time to acquire some education. Obviously, you want to learn how to become a real estate investor. So, you will need to read a little before you get into physical action. Start by viewing blogs and real estate books. Also, it would be a great idea to hang around other successful real estate investors. All of these things will enrich your knowledge of the business and help you understand how to make money in real estate easily.
Related: What Are the Most Important Aspects of Real Estate Education?
Step #3: The 4 advantages of real estate
This is yet another step Mr. Kiyosaki suggests before even buying an investment property. In one of his interviews, he pointed out the 4 major advantages of real estate that overcome any disadvantages that might occur along the way:
1) The monthly rental income
2) The tax advantages
3) Investment property appreciation
4) Easy investment property financing
There is no doubt that this real estate giant is 100% right about every single word he mentioned. Frankly, if you want to know how to become a real estate investor, understanding the advantages is a huge part of it. Otherwise, why would you want to invest in something when you have no idea what good comes with it?! In essence, this is the beginning of the money-making process.
Step #4: Observe the market
In any investment business, the market is constantly fluctuating which makes it hard to predict. Therefore, as Mr. Kiyosaki suggests, you must fall in love with the location. The criteria, of course, is based on appreciation rates as well as potential return on investment. That is why we suggest that you use predictive analytics first. This type of real estate analytics will help you choose a location that is profitable at all times. In simple terms, predictive analytics is about processing huge databases of real estate over an extended period of time to understand why the market is the way it is and how it will perform in the future.
The major factors that might affect your choice of location are the job market and rental demand. Before finding rental property for sale, you want to check the job market growth. Basically, look into cities to which people and employers are moving. This has a direct impact on the increase in rental demand and therefore, the demand for your rental properties.
Finally, regarding the location, make sure whenever you are buying an investment property that it’s close by. As a beginner, this makes it easier to keep track of your rental properties. This would speed up the process if you want to learn how to become a real estate investor who is an expert.
Related: Is It Smart to Buy an Investment Property for Sale Near Me?
Step #5: Find the right investment property
You’ve got to understand that the majority of new investors fail due to negligence. They settle for the first investment property they stumble upon. In this case, it is no different from buying a lottery ticket; you either win or you don’t.
The best analogy Mr. Kiyosaki gives to explain the process of finding the right deal is “You don’t marry the first man or woman you meet. Hopefully, you kiss a couple of them before you do.”
Well, he’s 100% right about that too. The process of finding the best real estate investments does not stop at the first property you put your hands on. Instead, it starts with having a few on your list and analyzing them to find the best option.
Bottom line: There is no way to learn how to become a real estate investor without performing an investment property analysis.
Step #6: Buy below market value
In order to learn how to become a real estate investor, you must learn how to buy below market value. Saving up on property price is never a bad idea especially with the numerous opportunities available for you. Therefore, try looking into foreclosures and short-sales. These are typically investment properties sold for less than what they are actually worth due to failure in mortgage repayment. In addition to the low pricing, it also contributes to increasing your equity on a property. It also decreases the amount of money you would have to borrow from a mortgage lender as well as the down payment. Basically, you can still learn how to become a real estate investor with no money or at least with little capital on hand.
Step #7: Use Mashvisor!
Finally, there is no better way to learn how to become a real estate investor than Mashvisor. Mashvisor provides you with the best learning experience as well as the best real estate investment tools every real estate investor needs.
Perhaps the best tool we could recommend is the investment property calculator. In short, it will turn every novice investor into an expert in no time. All you have to do is sign up for Mashvisor and the rest will be history!