Updated: May 19
Without a doubt, the rise of social media has increased the online presence and apparent ubiquity of successful real estate investors across the nation. However, that doesn’t mean that every piece of real estate investment advice you encounter online is legitimate. In reality, these investments cannot be rushed, there’s no “magic bullet” that beats a systematic approach, and most new investors fail to turn a profit.
Today, we’re revealing the top tips for new real estate entrepreneurs from Michael Mikhail, CEO & Founder of Stratton Equities. Read on to forget the advice that doesn’t work and find out how to increase your chances of success when investing in real estate.
What Real Estate Entrepreneurs and First Time Investors Need to Know
Below are the top 3 tips Michael Mikhail recommends for those new to real estate investment:
Tip 1: You Need to Have Good Credit and Liquid Cash
Above all, first time investors and new real estate entrepreneurs should aim to be valued investors. This means ensuring that your credit is good and that you have sufficient liquid cash to work with.
As an experienced private money lender, Mikhail has noticed certain trends that are best avoided. For example, when ambitious new investors suffer from bad credit, they often fail to focus their energy on fixing the problem. Instead, they’ll waste 10x more time trying to find a workaround–which never works in the end.
Tip 2: You Need to Build a Team
As a first time real estate investor, expanding your network is crucial. To be a successful real estate entrepreneur, you yourself need to have experience or partner with someone who does.
Jumping headfirst into a real estate investment with no experience can be incredibly overwhelming. Instead, go in with someone who’s been through the process before to learn how it’s done. If you can partner with someone who’s the majority shareholder of the LLC, you and your partner can sort out the numbers you ultimately want to earn on the profit. During the deal, use your partner’s experience and credit to your advantage.
After a few deals, you’ll have valuable experience under your belt. While you may lose money at first, you’ll have learned the process, built your network, and made yourself a much more desirable borrower in the long run.
Tip 3: When the Numbers Don't Work, Walk Away