When you start investing in real estate, how do you decide where to focus, what to study? Naturally, you can’t learn or become skilled in all the strategies and investment areas at once. So how do you start?
For us, single family houses were our primary focus, and that’s still true today. I started there because that was what I knew. I lived in a single family house, had for most of my life, and most of my family and the people I knew lived in single family houses. It seemed like the natural place to start learning. I already knew quite a bit about houses, like most of the parts that go into one and how long a roof or heating and air system should last.
But perhaps you have another area that you’re familiar with. Some investors love mobile homes or mobile home parks. When I ask why, they say that they have lived in mobile homes or a family member invests in them or some other reason why they are familiar and comfortable with that investment strategy.
When you do pick a strategy that is of interest to you, study and learn that specific strategy until you master it. Add more strategies as you go. It helps keep you from becoming so overwhelmed by all the choices real estate offers.
Another variation is that we started out by focusing on neighborhoods, areas where we wanted to own, rather than on a specific type of investment strategy like foreclosures or probate. Because we focused on a few geographic areas rather than on a specific strategy, we became skilled in many buying strategies.
Why? Because with marketing, you never know who is going to call or what type of deal you’re going to run across. Our goal is always to present an offer, a solution, to anyone who comes to us. If you focus on just one strategy – like foreclosures, wholesales or probates – too many deals come to you that you have to pass on because they just don’t fit those narrow models.
Also, when you focus on geographic areas, it keeps your marketing costs lower and your visibility in the area higher because you can market multiple ways in a smaller locale. I’ve written a lot about marketing – how, where and why!
And it’s important to be part of investment groups like your local REIAs and landlord associations to learn and to pass deals to others that you can’t or don’t want to handle. It’s difficult, time consuming, and expensive to find deals (no matter what strategy you use to find them), so you want to have others to pass deals on to that you ultimately don’t want.
Are you attending your local real estate investor meetings? You should be. This is where you will learn what’s happening in your specific area and what other investors there are focused on and why. You’ll also make the contacts you need – attorneys, contractors, buyers, etc. – for your investing business.
Over time, our preferred strategy has changed depending upon our primary goals and desires, the changing economy and current legislation. We own rental properties, we wholesale, and we do rehab to retail.