Robert and Kim Kiyosaki relaxing in their home

5 Ways New Real Estate Investors Can Succeed in 2018

Cut down on the steep learning curve of this dynamic industry by following my best strategy tips

It’s been said that if you’re not growing, you’re dying. That’s why it’s so important to become a lifelong student in this game of life. Of course, I’m not talking about spending time and money on a traditional education (unless you really want to)—I’m talking about reading books and articles from trusted news sources, and learning from successful people in your industry who are living the life you want for yourself. Imagine if you were a doctor and never read any medical journals—you wouldn’t know the latest medication protocols and surgical techniques, and your patient care would suffer. The same is true for every industry.

I choose to stay up-to-date on changes in the real estate industry because investment rules and methodology change over time. If I was rigid in my thinking and still using the exact same strategies that brought me success decades ago, I’d probably be homeless again. Instead, I seek knowledge from trusted advisors and then apply these new learnings to my overall investment strategy. I’m constantly evolving my tactics to make sure I remain in growth mode—and this means I’ve picked up on a few tricks along the way. I wanted to share my top five with you. This is advice you may not get elsewhere, but has been a big contributor to my overall success:

1. Buy Your Own Property First

If you’re new to real estate, I always suggest buying your own property to live in first. Why? Because the financing is easier (you’ll need less of a down payment and will find better interest rates), you obviously need a place to live anyways, and you’ll get the best tax write-offs. A few years later, you can upgrade to a new home if you wish, keeping your original property as a rental for cash flow. What a great way to get started on your path to financial freedom.

2. Focus on Numbers Instead of Emotions

It’s far too easy, especially when you’re new to investing, to let fear and greed drive your investment decisions. As with any business situation, it’s best to check your emotions at the door. The best way to do this is to bury yourself in the numbers. Research the cost of each investment opportunity beyond just yield and CAP rates. Look at such factors as the cost of vacancy, maintenance charges and also assess the risk profile of your tenants. Don’t forget to factor in your own risk tolerance (be honest with yourself!), which will lead to increased confidence when you’re ready to sign on the dotted line.

3. Speaking of Numbers, Don’t Let Them Freak You Out

I think we women have been brainwashed since grade school to believe that we are not good with numbers. But if you intend to be financially fit and reach your financial dreams, then you’ve got to become very comfortable with the numbers. Stop being intimidated by them—if you can add, subtract, multiply and divide (your cell phone has a calculator, right?), then numbers can be your new best friend along this journey. Once you rid yourself of your negative and unsupportive thoughts about numbers, math, finances and money, you’ll quickly discover their power. Numbers are merely clues for solving the “mystery” of investing. For instance, the number 10 means nothing on its own. But if that number represents the number of vacant units in a 20-unit apartment building you’re considering buying, now it means something substantial (a 50% vacancy rate). Get comfortable with reading the three main financial statements (income statement, balance sheet and statements of cash flow), and you’ll be well on your way to using these numbers to tell a story and solve the mystery. Here are some tools that can help.

4. Work Only With Trusted Resources

You can get advice anywhere, but why would you? Instead, surround yourself with people you know and trust. If you have full confidence in the critical people you will rely upon throughout the investment process—such as a banker, any co-investors, a broker, even your handyman—then you don’t have to reinvent the wheel each time (and risk getting burned) and will sleep more soundly at night. Treat these relationships like gold.

5. Practice and Perfect Your Patience

We all love watching “flip and sell” shows on TV, but so few things on TV accurately depict the real world. Your best investment strategy for 2018 (and one I’ve subscribed to for many years) may very well be investing in rental properties. Focus on your long game when it comes to real estate. The same goes for choosing the right investment opportunity—if something seems too good to be true, then it probably is. Don’t be in such a rush that you overlook red flags and ignore your gut instincts.

Real estate, similar to many other industries, is dynamic. It’s a living, breathing force. If you’re light on investment experience, then make sure you’re being conservative. Once you gain a better understanding of the intricacies of real estate investing, which will come with time, practice, and probably a few failures, then staying abreast of new changes will be much easier. I firmly believe that real estate investors who are able to adapt will thrive, but will also put you far ahead of the competition.

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