INVESTORS’ CORNER: Getting started in real estate investing

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Part one of five

One of the biggest mistakes I see new investors make is to treat real estate investing as a hobby instead of a profession.  If you’re counting on real estate investing to provide income now and retirement income later, you must treat it like a business.  Real estate investing is now your profession.  Treat it like one.

By that I mean you have to advertise, devote time to it, show up for appointments on time, act professionally, do your paperwork properly and treat your clients professionally.

Most real estate investing isn’t passive.  Unless you are a private lender, most investing takes real work.  Even a landlord using a property manager has work at the outset and should continue to remain active in oversight.

This is not a get-rich-quick scheme. It takes time to build client lists, credibility, partnerships and associations. A well-grounded business is built over time, unlike “overnight sensations.” It will take you three to five years to become a real success in this field.

Learn and stay informed

“If you think education is expensive, try ignorance.” – Derek Bok

You can lose more money with a mistake than you can learning how to avoid one.  Even if you have been at this business for years, you need to keep up with current trends and laws. You never get to the point where you know it all or even know “enough.”  Some investors honestly believe that there is nothing else they really need to know to be successful, then a law changes, the market turns, or a new strategy begins to be used. They either miss changes coming in their community that will substantially  affect their profits and put themselves in a position of huge liability, or miss out on time- and money-saving tips because they just didn’t take time to stay informed.

In the real estate business, like everywhere else, knowledge is power, and for investors it’s profit too.

To be continued Feb. 5.

JC Underwood is Executive Director of the Metrolina Real Estate Investors Association, which provides education, mentoring, and networking for real estate investing in the Charlotte region. He can be contacted at [email protected]. For more information, visit www.MetrolinaREIA.org.