Are You Buying Your First Home OR Investment Property?

If So...Here Are Three Tips for Purchasing Your First Property.”

By Van Sturgeon

Real Estate Investor

As a successful real estate investor, I am often asked to speak about my experiences and the processes that I have used over the last 30 years. I love real estate and it is a privilege and an honor to speak with many new real estate investors through forums, seminars and meetings. 

Seeing people realize their dreams of financial freedom and creating generational wealth is what fuels my passion to continue to help my fellow investors.

Unfortunately, many young real estate investors who have realized the power of real estate investing, are struggling to get into the game. They are not sure of the process, have a negative mindset and are not sure on how to purchase their first investment property.

If you are finding it a challenge to find a deal that delivers cash flow and is in your price range, I want you to know that you are not alone…

But...there is a solution for every challenge you will face!

Here are three real estate coaching tips that will help you successfully buy your first investment property:

Number One : Money is made on the buy!!!

As a new investor, you may get caught up in the enormity of the task and the excitement of buying your first property. Romanticizing and personalizing the transaction often leads to first time real estate investors, overpaying for a property and losing thousands of dollars.

Patience is key...

There is an old saying…”Money is made on the buy.”

Google it...I am not joking. It is the very foundation of a successful career in real estate investing. If you don’t find and negotiate a great deal on your first transaction, it could get ugly, pretty quick.

For the first time real estate investor, finding that great deal is very difficult. Meanwhile, I have so many opportunities that come in every day that I am overwhelmed at times. I have hired staff to help me sift through these deals and go after the very best of them.

Why am I finding great deals and you are not?

Well...what I can tell you is that I don’t find my deals on MLS or Loopnet. All of my deals come from relationships that I have created within the real estate investment community. It could be from mortgage brokers, real estate agents and property managers...even fellow real estate investors, just to name a few. 

But I don’t know anybody and it’s going to take forever to network with those types of people!!!...you say. Can I find deals somewhere else?

Of course, you can!!! I would start by identifying the wholesalers that are located in your area and getting on their buyer’s list. Wholesalers are a good source of less expensive properties and a much better option than buying a property through MLS or Loopnet. Keep in mind that the wholesaler is making money on the deal by assigning the property to you for a fee. 

There are other places to source for deals like Craigslist and Kijiji

The better price that you can negotiate upfront for your purchase, directly increases the chances of a successful real estate investment. The purchase price is the one single item that you can control. You can’t control random acts of vandalism on your property or the furnace needing a repair. 

Your understanding of what the fair market value of the property in the area should be, and being able to purchase it at a discount...This will determine your faith as a real estate investor.

If you overpay and do not have multiple exit strategies in place, the excitement to invest in real estate will quickly evaporate and turn into stress and anxiety.

Do not get caught up in the instant gratification!!!

Success in real estate, business, and life takes consistent effort, determination, and focus!

Number two: Learn as much as you can AND do as much as you can...yourself!!!

I see many new investors delegate vital steps to others. They believe that they can rely on other people to build a successful real estate portfolio.

Ummm...Not so fast, my little whippersnapper!

Real estate investing requires a lot of knowledge and experience in order to become successful. It does not happen overnight and it requires time.

Just like a fine wine…

Hiring and paying people to do all of the work will harm you in the long term. You need practical experience in finding your own real estate deals, creating unique and creative financing and handling your own renovations...and I truly mean...handling your own renovations. 

The second biggest expenditure in real estate investment is the renovation. 

Why wouldn’t you want to learn and understand the renovation process so that you can manage the renovation yourself, and not a general contractor?

Handling your own renovations helps you out in a variety of ways. First, by managing your first renovations, you are saving money by not hiring a general contractor. This one single move will allow you to save 30% or more on the whole renovation and as an added bonus, you get to control the timeline. You get to speed up or slow down a renovation and control who works on your property. Find a sale on toilets, on hardwood, on tiles...no problem. As the general contractor, you can make changes to the plan and adjust the renovation that makes sense to you. 

Lastly, handling your own renovation will add so much value to you in your real estate investing future.

You are in this for the long haul...right?

Having practical knowledge on the demolition, on the cost of upgrading the electricity and the difference in price of hardwood vs. laminate...all of these experiences will make you a better evaluator of real estate deals and the cost of renovation. 

Let’s face it… Every real estate deal is a deal because it needs some type of renovation to it. That’s why it is a deal.  

Those budding real estate investors that think that they can skate by and not pay for their education, always end up learning the hard way and lose money. One way or another….everyone pays for the education. Educate yourself by reading books, taking online courses and being active in forums and local Meetup groups. 

Knowledge is power...

Trust me. I could share many horror stories of costly mistakes that I had to learn the hard way, when I was first starting out. It wasn’t until I understood the power of knowledge and how important it was to invest in myself through education. 

When I started hiring coaches and invested in educational courses, is when I saw the dramatic jump in the growth of my real estate portfolio and the confidence that it gave me to succeed. 

I became a multi-millionaire by investing money on myself first, then on real estate.

Pretty selfish of me….I know.

Do yourself a favor. Educate yourself and be surrounded by like minded people, and you will be amazed at what you can accomplish!

Number Three : Invest in an affordable area that is four hour radius from your home!

Many new investors tell me that the prices of real estate where they live is simply too high. Buying real estate in their area is difficult because they can’t qualify for a mortgage, and/or they do not have any cash flow in a buy and hold strategy.

If you find yourself in this situation, I would suggest that you look at surrounding cities, towns and suburbs outside of your own area, that still have strong economic fundamentals and meet your real estate investment criteria.

As an example, many new real estate investors cannot afford to invest in the city of Chicago, but are able to in the nearby cities of Milwaukee, Rockford, Peoria and Champaign. I have always suggested that as a first time real estate investor, your first investment property should not be more than a four hour drive away. 

We always want your first investment property to be as close as possible to you, but the cost of real estate can get in the way of that dream. Keep your first investment within a four hour drive.

Trust me! I own property across North America...and I’m doing just fine!

For more information on house renovations and real estate investing, visit www.vansturgeon.com to help you in your real estate investment journey.