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Getting Started: Full-Time Real Estate Investing

When you're getting involved in real estate investing, it's important to remember that this isn’t an instant process. There's a timeline. You'll learn as you go.

When you've dabbled in the real estate market, with your first home or property, and you’re looking to go in deeper on your way to full-time investing, it can be hard to draw yourself a roadmap. That's particularly true if you didn't get the money that you wanted or the targeted results out of your first property investment. You start thinking you're in a ‘bad bounce’ right away – and it can shake your determination.

One of the biggest reasons that getting deeper into real estate investing takes time is that you often have other responsibilities.

If you're trying to manage a full-time job and invest on the side, those two things are probably going to conflict.

You'll see that happen in so many ways:
You might have to choose between eating lunch or spending your 30-minute lunch break on the phone with your agent or a contractor.
You might end up putting off a property showing or a site walk-through for weeks and weeks, because there's just no time to do it.
You might be so tired at the end of the day that you don't feel like researching properties.
All of these are real, tangible scheduling problems – but they’re also reflections of your overall strategy as an investor.

You might be in one of these situations because you tried to jump in too fast – to devote too much time and energy to a real estate strategy right away while you are still involved in other kinds of ventures.

You might think of your new real estate investing strategy is your ‘soft time’ – what you squeeze into your available openings in your schedule. Your full-time job and other constant responsibilities are ‘hard time’ – they don't tend to give very much.

With that in mind, if you’re looking to turn your part-time REI gig into a full-time venture to gain freedom of your schedule and your earning potential in this exciting market, you’re in the right place.

Now, you need to take a critical look at your time management, your REI tool belt, and your business strategies to make the move to full-time real estate investing.

Step #1: Refining Your REI Strategy and Process

Real Estate Investment Software on Laptop

If you have this kind of intuitive understanding that your strategy needs to be tailored to your schedule and what you can reasonably achieve, use that as a starting point.

Think about you first – and make your strategy fit your capabilities. Then reach beyond yourself and think about how you're going to implement the strategies in a collaborative way.

First-time investors who are growing their real estate portfolio often have trouble staying in sync with their agents.

Agents are busy, too. Real estate agents are notorious for taking on every new client, but squeezing client communications into their calendars in ways that don't always work out best for the person on the other end of the line.

One way to think of it is like this – if you are already stressed handling communications for a prospective real estate investment property, your agent’s hectic schedule can exacerbate this problem immensely.

In some cases, it's just a case of too much input – or somebody just doesn't have the bandwidth to do that collaborative work and communication.

Other times, though, it's a question of format. Maybe you can't get the agent on the phone, but he or she responds quickly to mobile email. Depending on your strategy, this could absolutely sink any number of deals. But if you implement the right collaboration, it doesn't have to be a major problem.

That's one thing that some of the new real estate digital platforms help with – they facilitate quick collaborative work and present information quickly and effectively.

Step #2: Strengthening Your REI Toolbelt

Have you heard of the principle of data visualization?

Data visualization takes text data and presents it in a visual format. It's tremendously helpful in enterprise, because as humans, we take in data much more quickly through visuals than we do by reading blocks of text.

As you get ready to take your REI business to the next level, you need to make sure you have the tools to quickly digest the universe of real estate data and eliminate hurdles that prevent you from missing the perfect deals.

By applying the data visualization principle to your real estate communications, you’ll quickly see that the right REI tools can help you with a few crucial time-savers in the form of:
  • Property maps showing potential investment deals in neighborhoods
  • Heating and cooling of the market you’re wanting to invest in
  • Comparisons of flip, pop-top, buy-and-hold, or scrape
  • Comparable analysis of properties (i.e. number of beds, number of baths)
  • Status of different properties in an agent/client or process pipeline
These are just some of the ways that data visualization can aid real estate research and help smart investors and agents to do more together.

With the right platforms within your reach, you can work faster and smarter in this next phase of your REI business.

Step #3: Learning (and Avoiding) Common REI Pitfalls

As you gain experience in this industry, you’ll uncover many pitfalls (both small, inconvenient ones and massive, expensive ones!)

Understanding Churning

A potential killer of your real estate investing strategy is a type of churning scenario where you throw energy into deals but don't get the necessary amount of capital gains back out of the process.

In equities, “churning” happens when individual trades have too much cost attached to them, often in the form of commissions: real estate churning is like that, because the associated costs of transaction eat up too much of the related gains.

As a new real estate investor, you have to be aware that the long laundry list of costs associated with a deal will quickly eat up a lot of your discretionary budget. These include:

  • Closing costs
  • Lending costs
  • Rehab costs
  • Title and attorney costs
  • Costs of acquiring permits for improvements

This is by no means an exhaustive list. You're going to have these costs pop up, and some of them create time management problems on their own.

For instance, unless you have an excellent contractor Rolodex, certain kinds of obscure problems like sewer line issues and leaky appliances can result in a lot of time spent just trying to mitigate risk – not to improve the property, but to “fix” the property!

So you're trying to mitigate risk and improve the property at the same time. Then you might have unanticipated transaction costs. It's easy to wind up with a lot less money than you had hoped for.

Being a Landlord of an Empty House

Another major struggle in real estate investing is related to simply being that name on a deed.

Any time you are acquiring property, you're taking part in a major responsibility.

Some people flip properties to rent them out – in which case, they are going to be actual landlords.

But even if you don't have a tenant, if you have bought the property, you own it—and it's your responsibility to keep it safe, secure, and livable, and to keep it functioning as a part of a structured neighborhood.

Even if it's only a few weeds growing beyond the municipal ordinance length, you're likely to hear about it from local code enforcers.

Other related costs are also similarly obscure and in some cases, a very unpleasant surprise.

Have you checked out the cost of vacant home insurance?

For many first-timers, the combined cost in terms of time, money, and stress seems simply overwhelming.

But you can learn to master smooth real estate investing plans – just like the industry veterans.

Step #4: Watch and Learn From the Industry Pros

Let’s walk through an example of how you can power-up your part-time REI gig into a full-fledged business by learning from those successful investors who came before you.

Alicia's Story

Alicia is a young career professional who transitioned from human resources into full-time real estate investing just a few years ago. Now she has time to sit and enjoy a latte or even to take off to Florida for a week before the ice storm hits. But it wasn't always like that.

In a recent meetup, Alicia talked about how she was able to streamline her workflows, improve communications, and achieve benchmarks that took her out of the “rat race” and into full-time property investment with a portfolio of over a dozen properties.

First, Alicia says, she was ruthless about her time. Every task had to fit in its scheduled niche, or it was time to go back to the drawing board.

In talking to younger and less experienced investors, Alicia also talked about some of the top tools for real estate investing. She touched on that data visualization principal and also presented information on the modern real estate data platform. Pointing out that today's tools go well beyond Zillow, Alicia talked about how the traditional MLS has been supplanted by various other kinds of systems that are able to access MLS data and take it where it needs to go.

Jason's Story

Jason is another experienced real estate investor who started out using third-party real estate data platforms to help with his property decisions.

Taking it one step at a time, he says, was a major facet of his ability to move from his first two or three deals into full-time real estate investing and property management.

“I put all of that data together myself,” he says, “Quickly, and without a lot of calls back and forth. I was able to target what I wanted without getting stuck in the ‘shopping cart’ phase – because when you want to invest, you don’t have time for second-guessing yourself beyond the due diligence that you’ve already done.”

Step #5: Choose the Right REI Tool to Move You Forward

In order to set up a real estate investing strategy that makes sense for you, take a look at some of the best resources for choosing the platforms and principles you'll use to make a fortune in real estate.

The REI Comparison Guide (a free download here) will help you to identify how to evaluate your choices to maximize what you can do with a real estate investing strategy.

First, there's the task of figuring out what data needs to be unlocked and taken out of its silos to provide for an interactive and decision-supported experience. For example, you want to see information on what's happening in a given neighborhood – what people are paying for properties, how long they're staying on the market, what improvements are done, and what secondary sale prices look like.

Then, as with any service, support is also key. You want vendors and partners that will stay grounded and stay available, not those who just want to sell you something and run.

That applies to your agent, too. As discussed above, your agent may be busy, and you may need to use text or email instead of playing phone tag day after day. But at the same time, you absolutely need someone who you can trust to be there at the right moments, to help get the deals made, or answer your important questions.

That’s easier when you can be a “data helper” with an innovative real estate data self-service platform.

Other kinds of market research and analysis can help you determine where you're going with your real estate investing plan, while also evaluating whether a given platform is the right way to get there.

Download the comparison guide and start fine-tuning your approach to real estate, so that when you look back over several months time, you'll see yourself progressing into a full-time real estate investment role smoothly and without having to sacrifice a well-designed exit from your day job.