Why did a pharmacist, a veteran, a supply chain coordinator, and a marketer walk into a property that was for sale?
No, that's not the beginning of a real estate bar joke. What these professionals all have in common is that they are among the millions of people who now view real estate investing as a rewarding career option and a potential source of income. Financial advisors consider real estate investing to be a great opportunity this year.
Real estate brokers and agents often do their own investing in single and multifamily homes and flips. Still, many other professionals are seeing the value of the business and are either doing it as a side gig or turning it into a full-time career. If done well, it could provide a steady stream of income and a nest egg for the future. This article explores the opportunities in real estate investing and considerations before you start.
Wisdom From Real Estate Investors About Starting in the Business
Given the growing popularity of real estate investing, we reached out to professionals to find out what drew them to real estate investing and their guidance for new investors.
The Pharmacist
Jacqueline Sanchez, a pharmacist, wanted to teach her children about money and create an income stream for herself and her husband. She started small and then began to move money from her stock portfolio to cover new investments. She now has a couple of investment properties in the Midwest and is even co-owner of a website that teaches others about real estate investing. Her advice for new investors?
"Aside from your spouse, your banker will be your next biggest partner," she asserts. Having a reliable and committed source of capital is key to success.
The Military Retiree
After retiring from the military, Cheryl Packham took advantage of VA loans to get started in real estate. Her first purchase was a townhouse in a small town in Wyoming, where she was stationed. She needed housing for herself, so she rented the property at first and then ultimately bought it. Although that investment didn't pay off, she learned from her mistakes and is now a successful investor and real estate mentor. The rules for using VA loans for real estate are very specific, so do your homework before starting down Packham's path.
The Ex-Marketer
After selling his share of a digital marketing agency in 2017, Josh Eberly of Pennsylvania caught the real estate investing bug. When he and his wife started looking at single-family homes, he realized that he wanted to avoid the traditional path of mortgage debt. He "house-hacked" his first property by using the money he received from exiting his marketing company.
"Discover what you are good at doing and get a team around you," he advises. "Just because you are good at finding deals doesn’t mean you should also be swinging the hammer come renovation time!"
Leaving the Grind Behind
Ryan David, a supply chain coordinator, wanted to stop being a "wage slave" and pursue a side gig that gave him flexibility and steady income to support his family. When he was on the verge of being laid off for the third time, his brother gave him a copy of "Rich Dad Poor Dad" by Robert Kiyosaki. David devoured it in days, deciding to change his career path.
One of the valuable lessons he's learned over the years is that "finding good contractors is tough, and investors must be prepared to go through a lot of them while building their team." David invests locally so that he can stay on top of issues at his properties.
Using Data To Make the Best Investment Decisions
Just because a deal seems attractive, that doesn't mean it's smart in the long term. Investors learn to conduct comprehensive analyses of opportunities and costs. For example, fixing and flipping may seem glamorous on reality TV, but it may not work out so well if you don't know your repair costs ahead of time.
"We use data to analyze the types of houses in specific areas that we have bought to find similar ones," Eberle says. "This micro-targeting strategy has worked well for us, allowing us to score off-market deals that benefit the seller and us."
Packham has similar advice.
"Do your research!" she says. "Get a strong grasp on the local, state, and national real estate market and economy."
Whether you're looking for a profitable source of additional income or contemplating a total career shift, successful real estate investing begins with learning from people who have already done it, building a source of capital, finding the right team members, and having a reliable source of data about the neighborhoods and properties you're considering.
If you want to start a career or side gig in real estate, our PropStream Academy can help you get started and it is free! Our first-course Introduction to Wholesaling is a great place to start!
