What's the difference between you and a real estate developer? John McNellis says there is no difference. Here are a few of his top tips:
Get A Team: You’ve heard from our “Real Deal In Real Estate” experts every time they come on. John agrees. Get a team. Your team gets bigger and broader when your projects get bigger, but just starting out, get a team with at least a realtor, lender and title company. As you get larger, you’ll add property management with maintenance personal contacts, lawyers, etc… but start small and grow slow.
How Do You Chose Real Estate: “Like taking a lion’s temperature, very Carefully”. Again, do your homework. Learn as much as you can about everything you are putting your (or other people’s) money into. Ask people who have done it. Read books about it. Know the market you are buying in. Know the property you are buying. The “get rich quick” opportunities sound “easy” and “fast”. Those are two words you should be careful of.
Understand Your Goals Going Into The Field: Are you in it to flip or do you want to build an empire? There are very different approaches to both of these paths. Knowing what you want to do and where you want to go helps immeasurably down the road when making decisions.
Do You Need A Partner: You may not have all the down money you need for your first property. Then you’ll need a partner. This comes with positives, negatives and responsibility.
- Positive: You get your money
- Negative: They have a say in what you do
- Responsibility: Nobody is happy if you loose their money
Weigh all the options before you take on partners. A partner could be a bank, family member, friend, etc… If it’s the bank, you owe them money, no questions asked. If it’s a family member, Thanksgiving will be a bit less comfortable. There is responsibility in this, but the rewards are great.
Read John’s book, Making it Real in Real Estate, Starting Out As a Developer, for more insight. It’s not very thick, but it’s got information in there that could save you a few lessons in the real estate school of hard knocks.
