Knowledge, Network + Money
A recent article in The Washington Post offered advice on launching into the world of real estate investing; the author says, “In general…there are three things that every real estate investor needs no matter what: education and knowledge, a good network, and money. But not necessarily your own money.”
Everything the author says is true except it isn’t that easy. Learning markets, finding good deals, and hooking up with the right professionals and investors takes a lot of time, persistence and patience.
Like any startup, the first few deals will likely be less successful due to lack of experience and inability to foresee problems. In addition, these deals will likely require one’s own money or that of close friends and family. New investors are also likely to underestimate the cost of ownership and the amount of time and effort to manage. Very small deals don’t justify hiring a property manager, so new owners are on their own—and better know a plumber, electrician and roofer.
The world of real estate investing is definitely not for everyone.