There are several ways one can achieve wealth and become financially independent. However, one of the best ways to do it is to become a real estate investing mogul. More people have become millionaires via real estate than with any other source. People will always need somewhere to live and companies will always need offices to conduct their businesses. Moreover, the financial benefits of investing in real estate are plentiful. This includes positive cash flow, value appreciation, tax advantages, and leverage. When done right, real estate investing can be very profitable. Even with little or no money, you can still build a real estate empire.
So, why doesn’t everyone become a millionaire real estate investor? The reason is that most people don’t really know the fundamental steps that should be taken in order to become a real estate mogul. In this blog, I am going to break down exactly how to get rich with real estate. Here is a step-by-step guide on how to become a real estate mogul.
1. Educate Yourself
The first step on how to become a real estate mogul is learning real estate investing. Most millionaire real estate investors are committed to continually expanding their skill set. Although it may not be absolutely necessary to attain a college degree in real estate, having sufficient knowledge of the business is important. Even before buying your first investment property, ensure that you have learned the nuts and bolts of the business. You need to be familiar with the basic real estate investment terms. You also need to have a good understanding of the different property types, investment strategies, the real estate investing process, the legal aspects of real estate investing, investment property financing methods, how to find and evaluate deals, etc.
Real estate education can be acquired from a number of sources. This includes real estate books, magazines, online blogs, courses, seminars, webinars, etc. You can also find an experienced and successful real estate investor to be your mentor. A good mentor will guide you through your real estate investing journey. Also, try working in the real estate industry so as to get familiar with key elements of property investment. The knowledge you acquire from working directly in the industry can give you a solid foundation.
It is important to note that the real estate market is vast. It is impossible to know everything before you get started. You can find yourself endlessly dragging your heels in the knowledge accumulation phase. Set a realistic goal for how long you will spend learning the basics of real estate investing. A few months should be enough. As you take the next steps, you can continually educate yourself and learn more.
2. Create a Business Plan
The next step on how to become a real estate mogul is to create a clear and detailed business plan. A business plan will help you formulate the course of action for the next couple of years of your business. It will also help you to monitor your progress and keep you on track to succeed. Moreover, having a business plan will enable you to factor in unexpected situations you may experience as a real estate investor.
A good business plan should include your investment goals, financial plan, and investment strategy. Your investments goals should be SMART (Specific, Measurable, Achievable, Realistic, and Timely). Are you looking to be an active investor or are you interested in having passive income investments? Do you want to generate sustainable cash flow or are you focused on long-term capital appreciation? Or are you looking for a combination of both? Regarding your financial plan, you ought to know how your purchases will be financed. With your current situation, what investment property financing methods would be best to use? You should settle on what your real estate investment strategy is going to be. There are many areas in real estate that one can invest in, including residential real estate, commercial real estate, house wholesaling, flipping, etc. The real estate investment strategy you select should suit you well and help you to reach your financial goals.
Related: Developing a Real Estate Investing Business Plan for Beginner Investors
3. Understand Your Local Market
Understanding your local market is also another important step on how to become a real estate mogul. The housing market can make or break you. Before buying your first investment property, you should understand the city, state, or country where you intend to invest in. Conduct thorough research on the economy, demographic trends, job market, growth pattern, real estate laws, tax laws, etc. Is it a good time to begin investing? Is it currently a buyer’s market or a seller’s market? For this reason, it is better for beginner real estate investors to begin investing close to their home. You are likely to have a better understanding of the economy and market trends of a nearby market.
4. Build a Team of Real Estate Professionals
Another key aspect of how to become a real estate mogul is to put together a basic team of real estate professionals. Before buying your first investment property, ensure you have a basic team in place to help you with the different aspects of real estate investing. As you accumulate more properties, you will also be forced to start outsourcing some tasks. Your team should consist of trusted professionals that will help you build and manage your real estate investment portfolio. Having a dependable team will help you to maximize your profits. It will also offer you peace of mind during complex processes.
Your team may include real estate agents, accountants, solicitors, builders, lawyers, property managers, home inspectors, mortgage brokers, etc. For instance, hiring professional property management can help to make your properties passive income investments since they will take over all the day-to-day management activities. However, ensure the real estate professionals you pick have the required credentials and experience. If possible, find a team you can work with long-term.
5. Acquire Your First Investment Property
The above steps on how to become a real estate mogul are all important. However, you now need to take action to actualize your dream. To become a real estate investing mogul, it starts with purchasing a single property. With your business plan and team in place, you should now go out and buy your first investment property. Even if you don’t feel completely sure, never let fear hold you back. Just jump in!
However, you should know that the performance of your first property is vital to the success of your property portfolio. It will be your first cash-generating property. You should carefully find and analyze your first investment property. This way, you will be able to buy a second property much sooner. Use Mashvisor’s data and real estate investment tools to quickly find and analyze the best investment properties in the US market.
Related: How Data Makes Real Estate Investors Rich: A Mini Guide
6. Acquire More Investment Properties
Building a real estate empire is actually a simple equation of gradually adding to your assets. If your first project is successful, you will want to repeat the process and steadily build your portfolio over time. However, to acquire more investment properties, you ought to be able to access cash. With more accessibility to cash, you will be able to act promptly when you get a new investment opportunity. There are a number of methods you can use to get cash from your first investment property to acquire more properties. Some of these methods include the snowball method, the 1031 exchange, and the BRRRR strategy. You can then repeat the process and buy multiple rental properties. Over time, your cash flow will increase and you will be able to invest in larger and more lucrative projects.
Related: BRRRR Strategy: The Ultimate Guide for Real Estate Investors
7. Diversify Your Real Estate Portfolio
As it is said, ‘never put all your eggs in one basket’. This applies to real estate investing, just as with any investment. Investing in one type of property comes with a risk. This is because the housing market often fluctuates. If all your income properties are of one type, you are likely to be hit hard in case the market drops. However, by diversifying your portfolio, you will be covered by your high-performing investments. You can diversify your real estate portfolio by investing in different locations, investing in different asset classes, and investing in REITs.
The Bottom Line
Many people invest in real estate but very few know exactly how to become a real estate mogul. As we have seen from the above steps, it takes a lot to become a successful real estate investor. It takes educating yourself, having a specific business plan, building a good team, having a deep understanding of the real estate market, taking action, diversifying, and much more. By taking the right steps, it is possible to build your portfolio from scratch and become a property mogul.
Be sure to use Mashvisor to learn more about real estate investing. Mashvisor also provides real estate investors with the best real estate investment tools to search, analyze, and find profitable investment properties in the US housing market.
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.