Hey everybody I’m here with a bussin video about to give you the five basic, no he doesn’t like it. D-Mac doesn’t like it. The five basic rules for getting started investing in real estate. And it starts now. What’s going on? I’m Jonathan Beasley. I’m here to talk about probably my third favorite subject in the world, which is real estate investing. The first two being faith and family. But I absolutely love real estate investing, it’s changed my life. And it’s changed a lot of the lives of close friends and family that I’ve kind of pulled into the game. So if you enjoy the content that we’re putting out, please give me a thumbs up and subscribe to our channel. I’m going to start creating more investor centric content because it just comes out of who I am, and I have the goal of inspiring 1000 new real estate investors.
Getting Started in Real Estate Investing
I really don’t care how long it takes I just want to inspire people to get into real estate investing because I believe it is the simplest way for the normal individual to change their financial future. So let’s get into it. Number one get really crystal clear on what you want.
See, a lot of people think when they get into real estate, they get a little bit of shiny object syndrome. Should I do a single family or should I do multifamily? Should a house hack, should I flip flipping is a really sexy one. I don’t recommend starting there for a variety of reasons, but that’s for a different video for another day. Oh, maybe I’ll do wholesaling. You hear a lot about like no money down wholesaling to get started. The biggest thing is that if you don’t get crystal clear on what you want, you’re just going to be inactive. It’s called analysis paralysis. So I encourage you to get crystal clear on what you want to do. And honestly, it doesn’t even matter that much what you choose. I can tell you from experience that it’s likely going to change and evolve over your career in real estate investing. But if you sit there jumping from thing to thing to thing and you have shiny object syndrome, you’re really never going to get started. You’re never going to get anything done because you won’t stay on one thing long enough.
To build momentum, which is huge, takes a little time to get momentum started. But once you do, it’s a snowball downhill, and I can testify to that one. So remember, this, it’s more important that you choose than what you choose.
What is Creative Finance?
So number two learn the basics of creative finance. Look, I don’t care if you have $5 million in the bank or $5 in the bank, that really doesn’t matter. You need to learn how creative finance works. In other words, how do people put together real estate deals, either big or small, using other people’s money? I started about six years ago in 2016 with about $50,000. I’ve taken that $50,000 and created about $2 million in equity by largely recycling that same $50,000 and using other people’s money. Here’s the reality Most investors don’t start out with enough money to be able to buy investments in cash. And the funnier thing is, now that I’m running in circles with people that own portfolios in the hundreds of millions of dollars, even the guys that do have enough money to buy in cash don’t buy in cash. They use leverage.
So you need to commit to learning more about financing because that’s a part of the game that’s never going to change. If you stay in this game long enough, you’re just going to find bigger and better ways to use leverage or leveraging other people’s money or other institutional money. So you need to commit to learning more about financing. Questions like How do I get a bank loan? What do I need to do in order to obtain financing? What do I need to do to obtain financing for an investment loan? What if it’s a primary versus not a primary residence? So you might be thinking, Well, that’s why I’m watching this video. I want you to tell me. But the reality is you can just pick up your phone and call somebody. You can comment below, and I could connect you with somebody. But the reality is these are things that you need to commit to figuring out if you’re serious about becoming a real estate investor.
So the next phase is this I don’t have a big down payment and a lot of people get stuck here because it’s a little scary. And you have to you assume that you have to have a big chunk of money in the bank in order to get started. So if I don’t have a down payment, does that mean I can’t get started? No, of course not. There are a lot of ways to get into real estate and other avenues to pursue using other people’s money to get started in real estate. For example, early on in my career, I connected with a family member, actually several different family members, and I use their money as down payments on investment property. And even to this day, actually, I still have a number of private lenders whom I leverage to bring down payment funds to close on larger deals. The numbers have just gotten bigger, but the principles have stayed the same. So I learned that if you bring in other people to fund your deals, they can fund it for you if you do all the work.
Three Components of a Deal
So in order to do that, there’s basically three components to the deal. First, you have to have knowledge. I had to have knowledge about the properties and the investments and making sure that there was enough margin in the deal so that everyone could get paid.
I got this from reading books. I am an avid book reader. Tons of podcasts, YouTube videos, is a great way to expand your knowledge. Reality is there’s all kinds of places to get adept and more effective at deal analysis. Then there’s the second part of this three part equation. You have to have the hustle. So I always kind of compare real estate investing to six pack abs. It’s super sexy and most people want it, but it’s hard. It’s simple but not easy. So what I’m saying is it’s not the hardest thing in the world, but you’re gonna have to put in a good amount of work and time and effort in order to find deals that make sense for you and a potential private lender or private partner. So if you can bring the knowledge in, then bring the hustle. The third part is the money, and the money is out there. If you’re able to provide the first two in the form of a solid deal, I always kind of hate the term no money down investing because I don’t really think it’s a real thing. But the reality is it doesn’t have to be your money
There’s almost always going to be money required to close on a real estate deal, just doesn’t have to be yours. If you bring the knowledge and the hustle. And the private lender for a down payment is just one example of a way to get creative with finance. There’s there’s seller financing where you find a property where the seller is actually willing to hold the note and act as the bank for you. There are lease options, there’s wholesaling to make cash there are hard money loans, and just an entire plethora of things to do to get involved with low or no money down deals. So bottom line is you’ve got to start to understand the basics of creative finance because that’s how you’re going to continually be able to expand your portfolio without running out of personal cash.
Analyzing Real Estate Deals
Step number three, become a master at analyzing deals because once you know how to analyze a deal to find out exactly how much you should pay for it, you can find really good deals and that’s how people really start to build momentum in their portfolio. You analyze a bunch of deals and eventually you find out that there are some pretty decent ones that will work out.
You just have to get started. So it goes like this. You analyze a deal, you make offers, and then you finally get one that comes out of the end of your funnel. It all comes down to be able to identify what a good deal is in my particular market, not to brag, but at my particular market, in just about any of the zip codes that I invest in, if somebody sends me a deal and I know how big the property is, I can tell you within probably plus or -5% what that deal is going to be worth after I renovate it. And that has only come through a ridiculous amount of repetition. So you have to start analyzing deals. It’s clear that proper analysis leads to proper deal finding, and the reality is you want to have surgical like precision when you’re running your numbers on a deal, and repetition breeds mastery. But what might be even more important than analyzing deals and this brings me to number four, is building a machine that delivers multiple deal opportunities for like for example, everyone needs water to live, right?
So imagine if you had to drive to 7-11 every time you got thirsty and pull a water bottle out of their cooler, go to the front, pay for it, drink it. Well, what if instead of that, think about the people that build your house and they just tap the city’s water system and any time that you were thirsty, you just turn on the faucet, you put your cup underneath and you drink? That’s what I’m talking about. When I talk about deals in a pipeline, you have to begin building a deal pipeline. Maybe you find a real estate agent to set you up with automatic email alerts for properties that are coming on the market. So every time property hits the market, that meets your crystal clear criteria that we talked about.
Boom, you know exactly what that deals about. Maybe you’ve analyzed enough to know whether or not it works for your system. Maybe you’re like me and you’re investing in apartment complexes. And every time a new apartment gets listed that matches your criteria, boom, you get notified. Now you’re talking more of a pipeline of deals. So I read a book called Multifamily Millions, and in that book, I realized very early on is actually that one of the author’s first chapters is Real Estate’s just a product, but you’re actually in the marketing and lead generation business. So you could do all sorts of things. You could look at direct mail you could do driving for dollars, where you actually drive people’s houses and take down addresses and build a database and then follow up with phone calls. You could do Craigslist ads. There’s a ton of ways to find deals, but focus on building and tapping into a pipeline rather than looking for that one bottle of water at a 7-11.
Persistence is the Key to Success
When you get thirsty, you have to build a system that brings you the deals as you grow into real estate investing. And lastly, that brings me to tip number five and probably the one where I see most people fall short or get screwed up or just give up, fail or never even get started. And that’s working on their business every day with persistence. I am doing fairly well for myself and just about every Saturday I’m still working on this business. Like I work five, six days a week. I still work on Saturdays and Sundays is for family, but it’s a real thing. You have to hustle. If you’re committed to this, you have to work on it every day. It doesn’t have to be hours.
It can be as small as 30 to 45 60 minutes. But I kind of compare it to this. I used to be 260 pounds. I want to actually show like a picture of fat me and fit me. I used to be 260 pounds and I was not happy with the way I felt or the way I look. I remember one time I was bending over to try and time I shoot at a friend’s house and it was like awkward and I got out of breath in that moment. I made a very serious decision to get thinner and to get more fit. And you know what I did? I started working out every day. I didn’t work out once a month or twice a month. I worked out every day. I didn’t eat better once a month or twice a month, I ate better on a regular basis. And then I started to see the pounds shed off. It’s no different in any arena in life, and certainly with real estate, you’re going to be consistent once you decide to do this. My thousand people, once you decide to do this, you’re going to be consistent and you can do it every day. So you are going to work on this business every single day. It doesn’t have to be four or five, 6 hours. It can be literally as small as 10 minutes. Here’s a good goal. How about you start analyzing one deal every day?
Probably take you ten, 15 minutes, but a year from now, you’ve analyzed 365 deals. How much do you think you would have learned in that time? And there’s probably going to be a point where you start to see distinctions in some of the deals that you analyze versus other ones. That’s when you know you’re probably getting ready to maybe figure out how to put together an offer. So every single solitary day set aside a few minutes to do something about what we’ve talked today, and little by little you too will begin to build momentum. I hope you enjoy this video. Please hit me with comments below if I can answer any questions. We’ve actually thought about starting a Facebook group so I could give people free advice on deals in live time, but we would need enough of a following to make that make sense. But if that’s something you’re interested in, please comment, share, and don’t forget to like, subscribe. I’m Jonathan Beasley with That Fit Team professionals and real estate, passionate people and passionate about building new investors. See you next week.
