Getting Started In Real Estate Investing

Real Estate--how do you get started?  You can get started in real estate investing in no time at all.  There's no elaborate set up or legal structuring required.  Many investors start out as a homeowner who occupies a 2-unit residence and rents out the additional apartment. 

Remember this--focus on finding motivated sellers and good properties instead of how you're going to structure a deal.

Learn how to put your real estate investing on "autopilot".  You may however decide once your business grows to consider other forms of business organization.  When getting started in real estate it is a good idea, if you are currently employed, to start your investing business and run it until your monthly positive cash flow from real estate surpasses your present monthly income.  Here are a few things to consider as you begin investing.

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Are Your Goals Too Small or Non-Existent?

This may be the most overlooked step when getting started in real estate investing or any venture.  You must have a clear idea of what you want to accomplish and why you want to accomplish it.  Sit down and write out your goals. Write them out with respect to the spiritual, family, personal, financial and any other areas that fit your situation.  After writing them down, set dates (this is critical) for their achievement and then periodically review them and make changes as necessary.

Organization

You can start as a Sole Proprietorship which is the simplest way to run your business when getting started in real estate investing.  Later you may want to look into organizing as a Limited Liability Company (LLC) which is rapidly becoming one of the most popular small business structures due to the simplicity of tax reporting and the reduction in personal liability.  You may decide to Incorporate using a simple Incorporation kit.   Incorporation is not a complicated process but it does require more diligence to run and corporations are doubly taxed by the government.  A Trust (not to be confused with a REIT--real estate investment trust) is another way to set up your business to limit personal liability and to protect your privacy as an owner.

Net Worth

An assessment of your current situation is necessary so that once you begin investing in real estate you can chart your progress.  A net worth statement will show you where you are today financially.

Business Plan

A business plan is not necessary if you only want to buy one or two properties, however it can become a great tool to be used to legitimize your business especially when applying for financing of large projects  and to provide structure and spell out how you plan to run your business.  A business plan should contain these basic elements:  Cover page, table of contents, executive summary, the company and its strategies, the market, the plan for growth and expansion and finances.  There are a number of good places to find business plan software packages on the market to help you complete this task.  Try Socrates which has an extensive selection of books, kits, software and forms.