BUSINESS FUNDAMENTALS
GETTING STARTED
from a manager? Do the same for your financial commitment: a) Keep your securities investments, b) sell some investments in favor of real estate, c) refinance and borrow money to invest in real estate. Also consider your educational commit- ment and which options work best for you. You can go to meetups, purchase courses, take community college courses, attend workshops, and so on. Additionally, take an inventory of your strengths and “development needs” (i.e., weak- nesses), then plan to utilize the strengths, and address the needs. GROWING INTO MATURITY There are two elements for grow- ing into real estate maturity. One is experience, which is gained by transacting and owning properties. The second is education. Educa- tion must be ongoing because the market and the industry are always changing. Real estate investors of any level, but especially beginners, should take advantage of the fol- lowing educational opportunities:
Pay no attention to a course or program that costs more than $3,000 while still a “newbie.” You won’t get enough out of it at this stage. And you can learn a lot by not spending much in the be- ginning. The same with hiring a mentor — it may happen, once you know your needs. GETTING A REAL ESTATE LICENSE It’s not a bad idea to get your li- cense because it is educational and provides transacting experience, plus can help you earn commis- sions. The only drawback is that you must disclose your licensee status when transacting property for your own account. “ARMCHAIR INVESTING” Many “newbies” are eager to get started. Options like “turnkey” rentals or commercial and multi- family syndications (i.e., group in- vestments) are choices for passive investors. The problem, however, is dishonest and/or incompetent players in the industry, and it’s often hard to tell the good from the bad. Additionally, the syndication market has become highly compet- itive such that marginal deals are being put together to maintain deal volume. In these cases, consider hiring an expert to analyze the offering for you. •
A Good Start
markets, homeowners are still “underwater,” where they owe more than their property is worth. Some markets have increasing foreclosures. It is essential that new investors get an assessment of the market(s). PERSONAL PREPARATION The “newbie” investor needs to do a personal assessment as well. Ask what time commitment you are willing to make initially. Do you want to be “All in”? Do you pre- fer to invest part-time while still employed? Or do you want to write a check and read quarterly reports
1) Current books. Be cognizant of dated material.
2) Courses at local adult educa- tion centers and community colleges.
GETTING STARTED IN REAL ESTATE — PROPERLY.
by Bruce Kellogg
3) Speakers at meetups. Be cog- nizant of any biases.
prepared for the ebb and flow of economic cycles.
A
ECONOMY When strategic planning, a neces- sary first step is economic assess- ment. Consider your fiscal situation, then come up with a “postulated environment” for the future. The economic boom has lasted for a decade, and economists indicate it should not be expected to contin- ue much longer. Make sure you’re
good way to get started in any new endeavor, including real
4) Workshops and bootcamps.
estate, is to learn as much as you can: attend events, read the right materials, find a reputable mentor, and ask the right questions. But there are other factors to consid- er when starting as a real estate investor to ensure you start off on the right path.
Bruce Kellogg has been a Realtor ® and investor for 38 years. He has transacted about 800 properties in 12 California counties. These include 1-4 units, 5+
5) Courses from regional and national trainers.
REAL ESTATE MARKETS Housing markets vary across the country. Some are rising, turn- ing profits for homeowners and investors. Some are leveling off or beginning to decline. In some
6) Subscribe and read national real estate investing magazines.
apartments, offices, mixed-use buildings, land, lots, mobile homes, cabins, and churches. Reach him at brucekellogg10@gmail.com or (408) 489-0131.
24 | think realty magazine :: september / october 2019
thinkrealty . com | 25
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