Here’s the thing, most folks spend far too much time focused on “getting a deal” and not enough time on preparing themselves to take one on. The first step for everyone is to identify “what” a “deal” is, sadly, most cannot. Learning what a deal looks like begins with establishing your investor identity first.
Investor identity comes down to determining the type of investor you want to be, the asset class you choose to invest in, the risk tolerance you are comfortable with and the rate and type of return that is acceptable to you. Are you focused on one thing? Or everything? It is a fair question.
Begin with the end in mind, which for me means that I need to think about my ultimate goal, my “why” if you will. For me, I like to travel and see new places and experience new things. This means that I need predictable streams of income that don’t require much of my attention. For me, this means investing in multi-family real estate because I can employ teams and systems to do “the work” for me.
Next, you must learn about responsible money management, especially focusing on responsible borrowing. By that, I mean that in order to make it easier to escape the rat race, we first need to lower or eliminate our “bad” debt. By “bad debt” I mean credit cards or other revolving accounts that fleece us out of our hard earned money. When you are starting out, be disciplined in how you spend your money and avoid running up your credit card balance. If you cannot “afford” something without having to swipe a credit card then..you can’t AFFORD it at all.
Buy and hold investors need to get laser-focused on income and expenses. Forget the romantic stuff and get down to brass tacks, a property will either produce an acceptable profit or it won’t, it’s that simple.
If you are speculating as in flipping houses, then you darn sure better be focused on the exit when you sell the property. This means becoming focused on who your buyer is (not who specifically but the type of buyer). Is your buyer most likely an FHA or VA buyer? Are they on a fixed income? A family just starting out? A retiree? These are things you must research in order to provide an end product that will be the most desirable to your buyer.
Complaining about high prices won’t change a thing, in fact, it will slow you down and hold you back. To solve this problem, get yourself in front of the decision makers. High prices are not the Wholesaler’s Fault, they are not the Realtor’s Fault and not the Seller’s fault….they are YOUR FAULT because you let a “price” distract you! Focus on finding situations where your offers can solve problems, otherwise, you are simply competing on price alone.
Remember this, most W2 wage earners work the first 5 months of every year JUST to pay taxes. The good news is that you can decide to be the exception to this unwritten circumstance by simply changing HOW you earn your income.