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The real estate market presents a rare opportunity for anyone—regardless of age, gender, race or education—to make a lot of money.
Thankfully, there are several ways to enter the real estate market with no experience.
If you become a real estate agent, you’ll be competing against 3 million other licensed agents in the U.S.
But, if you become a real estate entrepreneur, you’ll join a smaller and more elite group of investors. Being a real estate entrepreneur means your focus will be on building a portfolio of real estate investments.
These investments should pay you cash flow, provide you with tax benefits, and appreciate in value over time.
Here’s how to become a estate entrepreneur, even if you’re starting from scratch.
1. Get Savvy About Real Estate
There is a lot to learn about real estate. Fortunately, we live in the information ago, so this info is extremely accessible.
You can take online real estate courses, read real estate books, and watch videos about real estate.
Before you completely dive in, focus your efforts. Start by taking a real estate course that prepares you to get a real estate license.
A real estate license isn’t necessary, but there are advantages. A license will teach you the basics of real estate law within your state. A real estate license will also you access to the multiple listing service, which makes it easier to search for and screen properties.
Plus, it will provide opportunities to network with other real estate professionals and let you earn commissions from the sale and purchase of real estate properties.
2. Identify Real Estate Investment Strategies
To make money as a real estate entrepreneur, you’ll need to understand the different real estate investing strategies.
New real estate investors typically start with turnkey properties. These are existing rental properties that are in good condition and easily rentable to tenants.
In some cases, there may be a property management company handling the property already. In this case, you simply purchase the property and retain the property management company and tenants. This way you can make money from the property immediately.
Another investment strategy made popular by TV from is the “fix and flip” approach. With this tactic, you purchase a distressed property well below market value. Then, you fix it up and sell it for a profit.
Wholesalers do something similar but they don’t invest in fixing the property. They buy a property, usually for cash below market value, from distressed owners that need to sell quickly.
The wholesaler then resells the property for a small profit. This is a business approach that takes volume to make it work.
Investors near popular tourist destinations may use investment properties for short-term rentals.
Or, you can diversify your investments with crowdfunding and real estate investment trusts (REITs).
3. Create a (Basic) Business Plan
Every entrepreneur needs a business plan. This is where you flesh out your ideas and turn them into a concrete plan. It’s necessary if you plan to work with outside investors.
What’s required in the business plan? Not much, as it’s simply a description of how you plan to be profitable. Conduct market research to learn if your investment ideas are viable.
Start by listing all of the startup and operating expenses for your real estate business. Then, create another spreadsheet that shows profit and loss (P&L) statements for the first few years.
This is also a good time to set goals for your real estate business. Decide how much money you want to earn and the timeframe in which you’ll aim make it.
4. Find a Real Estate Mentor
Every real estate investor has regrets about their first real estate transactions. You don’t have to make the same mistakes that they made. Real estate mentors are valuable resources who can guide you through your early real estate deals.
There are a lot of things that you may not know yet about real estate, even if you have a license. Those unknown factors can leave you vulnerable to “rookie mistakes”.
How do you go about finding real estate mentors? Start by looking online. There are countless forums and Facebook groups to join. Check out places like Meetup for real estate investors groups in your area.
A successful mentorship can benefit from goals and boundaries. Do you want to meet your mentor once a week? Do you want them to be available to answer questions on the fly?
Most importantly, what can you offer your mentor in exchange? You’d better have an answer to this questions or your odds of getting a “yes” won’t be very high.
5. Secure Your First Real Estate Investment
Now that you have your strategy in place, it’s time to look for that a profitable investment opportunity.
This is where your business plan and mentor become valuable assets.
As you analyze properties, you’ll discover if specific properties will get you towards your goals or not. Your mentor can also help you to stay away from overpriced or risky investment properties.
Ideally, you’ll want to secure a property that is…
- In a nice neighborhood (safe, popular, good job growth)
- Will cash flow from day one
- Has the potential for substantial price appreciation over time
Becoming a Real Estate Entrepreneur
This is an exciting time to jump into the real estate business, because it’s possible to become a real estate entrepreneur with no experience, no credentials, and no college—and do extremely well.
Once you get your first deal done, your confidence will grow. Best of all, real estate has created more wealth across history than any other asset class. Congrats on learning how to play the game!