You’re considering a career in Real Estate investing. What are the most important things to know?

I’ve been investing in real estate for decades and help guide other investors to build their portfolio. The key item with goals and objectives with a real estate investing career is to think about what skills do you have and how will you differentiate yourself in a market that has many investing experts. As you think about strategy you need to look at where you will source the capital and what sort of deal flow fits your investment objectives and those of your investors. Another major consideration is consistency in returns as you look to build your track record.

I've been investing in real estate for 12 years in multiple assess classes. Defining your goals is the critical first step. Here are some key questions to consider that will help define your goals: 1) Passive vs active. If you don't have the time, skill, or energy you will likely want to pursue a passive strategy. If you have time, skills, or need more control an active strategy could be right. 2) Cash flow vs appreciation. Some property classes and markets will produce more cash flow while others can generate more appreciation. 3) Local vs out of state. If you feel you need to actively manage your properties you will want to invest locally. But not all markets are suitable for investing. In those cases, consider looking out of state

Your goals determine your strategy. If you don’t have much money and you’re wanting to build that before you start investing then I recommend you learn how to wholesale to grow your money without having to put out much up front money. If you’re working a W2 that is paying you 6 figures and your goal is cash flow then I recommend you learn about being a passive investor and make investments as a limited partner (LP) until your passive income is equal to or greater than your earned income. Once you reach that you have the option to start acquiring real estate yourself for cash flow and raise money to do so.

Your market and niche plays key roles and both depend on each other. I personally focus on landlord friendly states so that my investors don’t get taken advantaged of by the government in non landlord friendly states. The type of real estate matters too because in some markets the demand for mobile homes isn’t as great as in other markets, so you would be doing yourself a disservice by looking to invest in an area that doesn’t fit your niche.

You want to learn how to raise money. By learning this skill you’ll be able to acquire almost any property. You want the right investors in your database because that can affect if you close on a property or not.

Tax Implications - Familiarize yourself with the tax implications of real estate investing, including property taxes, depreciation, capital gains taxes, deductions, and potential tax benefits such as the 1031 exchange for deferring capital gains on property sales.

One tip from personal experience: If you plan to scale a portfolio to more than 10 properties you will want to maximize the number of government backed loans (Freddie, Fannie, etc.) you can get. The reason is that rates are lower and terms are better. After 10 loans, you need to get commercial financial which is much worse. But if you are married there is a way around this. You can get 10 loans in your name and 10 in your partner's name to get a total of 20 of these "golden ticket" loans. If both spouses have W2 jobs qualifying is easier. I wish someone told me this before I started years ago!

Education really is critical. It can help you avoid some terrible mistakes. Also, I suggest getting a mentor that has done it. Learn from their mistakes so you don't have to make them!!!

It sounds easier than it is. Gurus online want to make you think investing in real estate requires no money and is easy as, but the world doesn't work that way. Yes, it is definitely possible to make good money investing in real estate both in the long term and in the short term, depending on ones strategy. But because there's good money to be made, it would be naive to think there's no competition ?? If you're considering this, be aware that there's a lot of effort and quite some upfront capital needed to participate ?