New business ventures are always scary. It’s true, and there is no point in denying it. They are scary because they involve some level of risk. That said, real estate investing really doesn’t have to be a fear-inducing prospect. There’s no reason that you should be any more scared of getting into remodeling than you should be of working on and launching a brand-new startup. In fact, there’s actually less reason you should be scared.
I purchased my first property when I was 18 years old. Was I nervous? Sure I was! But I loved it, and I knew that taking this first step was what I needed to do in order to be successful. It’s normal to be scared when starting something new, but you don’t want to let your fear hold you back either.
In the end, what it all comes down to is that the risk involved with starting a real estate investing business is quite small compared to other industries. There’s really no reason to be worried.
These 3 tips should put your mind at ease.
You Don’t Have to Quit Your Day Job
First of all, you don’t have to “go all in” when you start real estate investing. It’s actually very reasonable to approach it as if it were a part-time job or as if you were building a startup. Instead of quitting your day job and jumping into renovations headfirst, you could work on your business plan in the evenings when you get home, and then start looking for leads in the mornings before you go to work. In addition, you could call general contractors and project managers on your lunch breaks, and then have a real estate agent list your homes and sell them for you while you work.
Once your business has started to pick up speed, you can decide how far you want to go with it and whether or not you want to change tracks and turn your real estate investing business into your new career.
Exit Strategies Prevent Big Losses
Once you decide to say “good bye” to your day job, there are a number of ways to ensure that you will make at least some money on almost every home.
If you find that you’re going over budget and you don’t have the means to continue with a rehab, you could either partner with another real estate investor or sell the property to them. Then you can take the money you made back from selling that property to buy another one that will be more lucrative.
If you have a house that’s sitting on the market and it won’t sell, holding it can be profitable, as well. You’ll just have to find a good property management firm and rent it out until it’s the right time to sell.
You Don’t Need Your Own Money to Get Started
The best part about remodeling houses is that you don’t have to be independently wealthy to get started in the business. Unlike banks, private lenders and hard money lenders don’t look at your credit when they decide to lend you the capital you need for a remodel. They look at the property and the deal, and they make their decision based on the same things that factored into your decision to invest in this particular property. So, if you do your homework on your deals, you shouldn’t have any trouble getting the money you need to kick-start your business.
Real estate investing certainly involves some risks, but savvy investors only make calculated risks and they always plan a few exit strategies in case things don’t go as planned. You can start a profitable and successful real estate investing business—you just have to learn to let go of your fears, one step at a time.
You don’t have to quit your day job to start real estate investing. Give yourself plenty of time to get to know your business, and you can start making money on the side while you are working full-time. It’s an all-around win.