If you’re anything like me, the idea of investing in real estate has crossed your mind at least once or twice. The excitement of passive, long term income, the benefits of growing net worth, and the security of financial freedom are all wildly appealing ideas. In this episode, real estate investment owner, Andrew Nebel, and I discuss Investing 101.
Step 1: DO YOUR RESEARCH
As a first time investor, Andrew says one thing he did well was research the topic of investing. Starting as early as 12 years old, Andrew researched what options are available for property investors. He talked with others who were further along in the real estate investment process, he listened to podcasts, read books, and attended seminars to find the right fit for his life. Use the tools below to help you start researching what type of investment might be right for you. Remember: knowledge is power!
Step 2: START SHOPPING
Once you’ve researched the theories of real estate investment, it’s time to start searching for the perfect place. Whether it’s a single family home, a 2 unit, a 4 unit, or something else you’ve yet to discover, the options can be overwhelming. Take time to see several types of properties to help you decide which real estate investment is right for you.
Step 3: OVERCOME FEARS –> BUY A PROPERTY
One topic Andrew mentions throughout our conversation, and something I am all too familiar with, is the fear that comes along with such a large financial investment. The fear of missing out, will I be tied to this property and have to miss out on other parts of life to maintain and manage it? How will I manage the property and deal with the issues that come along with having tenants? And finally, how will this affect me financially? Will this be a wise investment that will cash flow or is it too risky and will it cause me financial strain? These are all questions Andrew wrestled with but, using the calculators below and drawing on all of the research and resources he had gained from others, he was able to make a wise financial and lifestyle investment that he says has already begun to cash flow in just a few short years. Keep in mind, regardless of short term cash flow, your net worth is going up while someone else is paying the mortgage on your property!
Step 4: MANAGING AND MAINTAINING YOUR INVESTMENT
You’ve bought the perfect real estate investment, you’ve fixed it up and your tenants are all moved in. Now what? This is the part of the episode where Andrew warns us, it may be passive income but owning an investment property is not a passive experience, it is work. Maintaining the units, he says, can be difficult but with the right amount of planning (i.e. setting up a separate bank account with the sole purpose of saving for miscellaneous maintenance expenditures) costly and unexpected maintenance issues can be a low stress experience for everyone involved.
Andrew’s philosophy on real estate investment ownership is build wealth but remember, you are working with families. The goal is a long term investment that will cash flow for many years!
TOOLS & RESOURCES MENTIONED IN THIS EPISODE
– Rich Dad, Poor Dad by Robert Kiyosaki (book & financial freedom website)
– Cash Flow (board game from Robert Kiyosaki)
– Bigger Pockets (Real Estate Investment Website)
– Bigger Pockets Calculators (Calculators to help you determine which type of investing will help you be profitable)