As a succesful investor and coach of over 20 years the most common question I hear is "How do I get started?"

I have written down the first 9 questions you need to ask yourself before you proceed forward as a real estate investor. These questions are crucial for you to know so that as you proceed you will know which types of deals you should look into and which you should not.


Now that you’ve answered these questions, you’re now ready to continue…

While it is true that you can make pretty good money in Real Estate, you can also lose a lot if you don’t have a plan. I have seen several developers and investors, who were turning 75 houses a year, go bankrupt because they were out qualifying and guaranteeing loans. When the market had a sudden downturn, they were hit hard. As is often the case, they had a faulty plan, and did not prepare for a change in the business cycle.

I myself have bought and sold over 100 of my own properties. I can honestly say that if I were to do it over again, I would have followed a better
buying plan. You see, once you know the "How" or the "Mechanics," it is easy to buy real estate. People laugh, but it’s true! It’s all about buying
"RIGHT."

The biggest problem I see new investors getting into is not having a plan for what they are going to do with the real estate that will make them money. A friend of mine buys multi–family units, not less then 130 units per complex, and the units pay themselves off in 5 years. His company owns a billion dollars worth of properties. They have a plan. Let’s get back to the example of you desiring a $1,000 a month real estate income. How do you get there? This reminds me of a deal I did a few years ago, when I had a goal but deviated from my plan. Let me
explain.

I found a nice house in a good area and my goal was to get monthly cash flow. The seller was just about to enter foreclosure and her payments were about $500 a month. The house needed some work, but it was in a nice area that rented for about $850 a month. The awesome thing was that she had an assumable loan that I could assume at 8.5% with a $75 assignment. She agreed to take about $5,000 of her equity on a note in small monthly payments. I acquired this property for about $60,000. At the time, I didn’t have much cash, and I needed about $4,000 to fix it up. I found a buyer and sold it to him for about $8,000 down, and I carried the balance on a note. The new buyer’s payments were about $900 a month and at a much higher interest rate than I was paying. I got in with just a few hundred dollars out of pocket. Now this was a great deal. I had achieved my goal. It helped out on that monthly cash flow. In fact, at the time, I had done a few of these types of deals; and I had an extra $1500 coming in each month. It is possible to find a few good deals in a short period of time.

Here Is that deal and how it worked:

CASH OUT (To Seller)

The problem with this deal was, I quit thinking about my goal of building monthly cash flow, and I began selling some of my notes for cash. At that time, my goal was to develop about $5K a month in monthly residual cash flow, but I lost focus a bit. I wanted it faster, and sold this cash flow for about $15K Cash. Did I lose? Well, I’ll take loses like that all day long, but the point I am trying to make is, that I deviated from my initial plan. Sure, it gave me a chunk of cash, but it was paying me close to $4,000 a year, and would have paid for a new car 10 times over. It was actually accruing principle every year.

Looking back, I wished I hadn’t sold, as it was an easy property to own and manage. It was in a good area, with a simple assumption loan (no qualifying, no recourse). Those are the kind you keep! Robert Kiyosaki’s advice in Rich Dad Poor Dad is good advice to follow. "Buy an asset, and let your asset pay for your toys."