How To Get Started As A Passive Real Estate Investor In Uncertain Markets
You want to invest in real estate, but it seems like you are late to the party. Don’t fret. There is still hope. It is always a good time to invest in a great investment opportunity.
The reality is that at all times in the market cycle there are deals that will be profitable for that period. If you follow these tips below you will be able to passively invest in cash flowing multifamily real estate in no time!
Decide If You Want To Invest In Real Estate
This may seem like it is obvious, but many people don’t take the time to fully consider if they want to invest in real estate. Real Estate investing is great but based on your lifestyle, risk tolerance, and financial position, now may not be the time for you to invest. If you take the time to truly decide if you want to invest in real estate, before getting started, it will help when you get farther into the journey.
Learn The Lingo Of Multifamily Real Estate Investing
Starting in investing is like traveling to a country that speaks another language you are not familiar with. You do not wait until you are fluent in that language before you pack your bags. You may not even think about learning any of the local language except for the basics like “where is the bathroom?” and “how much does it cost?” So, get your bags packed and get ready for the journey!
Network With Active And Passive Investors
As a new investor one of the best places to learn is from other more experienced investors. There is a lot that you can gain from educational material however when these items are put into practice that is when the true learning begins. You may be thinking why should I network with both passive and active investors?
There are many benefits to network with both types of investors even though you only plan to invest passively. When you network with other passive investors you get a better understanding from their point of view what are key indicators you should look for in a good deal and red flags of a bad deal. They may also be able to deal opportunities with you.
Active investors are likely to be the primary source of investment opportunities. Additionally, they can tell you things to consider when reviewing passive investment opportunities.
Increase Your Deal Exposure
You probably will not invest in the first deal you come across. Maybe not even the second, third, fourth or fifth one. Novelty can be scary, especially if it involves a large sum of money which you have worked hard to earn. Novelty can only be overcome through familiarity. You can gain familiarity with investment opportunities by looking at many investment opportunities. Once you increase your exposure to investment offerings you will start to notice common trends and they will feel more familiar.
As mentioned previously, one of the ways to increase the amount of investment opportunities you see is by networking more so you can connect with individuals that can be sources of deals or point you to sources for deals.
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Take The Leap And Make Your First Investment
Ok, now you have spent months learning, networking, reviewing deals and you finally found one that works. Congratulations on making it to this stage. It is time to act on everything you have learned over the last few months.
There will likely be some anxiety and you may not know 100% about everything related to the deal but you know enough to be comfortable. Many people make it to this point, but they always find some excuse to not move forward. They may decide to pull the trigger on a future deal. Unfortunately, some never move forward and end up missing out on great opportunities. Investing takes risk and includes uncertainty. If you are not ready for those two elements of investing, then investing may not be for you and that’s OK! There are many other ways you can be financially responsible.
For those who do want to be investors however, you should ensure you are prepared to invest. To ensure that you do not get stuck in this group that never moves forward, commit to acting now when you are just starting out. No matter how small that action may be.
Be Patient And Keep Learning
One mistake many people make, especially when they are scared and in uncertain times is that they freeze, become paralyzed and do nothing. There are many things you can do when you are new to investing, but nothing should not be on your list of options.
If you have just made your first investment, know that real estate is a long-term investment. It is about delayed gratification. If there are any investment opportunities promising you outsized returns, immediately then you should be cautious of that opportunity. You should not have sleepless nights worrying about what will happen with your investments but rather invest when you have conviction in the long-term vision of the investment opportunity that will outlast short term market changes.
Once you have made your first investment, don’t just sit back (although it is a passive investment). The best action to take is to continue learning, reviewing deals, networking, and doing all the things that got you to the point of making your first investment. This will help you become a more informed investor and before you expect it you will be ready to make your next investment.
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