10 Tips for Real Estate Investing: I
by Michael Lam | Jan 30, 2016
To my peers I’m considered a successful Millennial investor. Over the course of my journey to becoming a real estate investor. The number one question I’ve received by novice investors or anyone that has shown interest in getting involved with real estate is how did I do it and where did I get my money, given how young I was.
First, let’s finish the introduction. My name is Michael Lam. I’m a Millennial by definition and married and have several children all under 5 years old. I am an engineer by degree. We live under one income and I own my home and several rental properties and have done and been involved with several flips over the course of my real estate investment career. I’m currently pursuing more properties and seeking more opportunities to do business with other firms/partners to expand my portfolio of real estate investments. I’ve contributed more than 75% of the articles on this website. If you want to know more about me, just read my articles on this website.
I did start out my investment career in late 2008. Right when the economy crashed and properties were rock bottom. Some may argue, “Well you came in at the right time and got lucky”.
That statement is only partly true . What people don’t understand is you don’t just one day have the cash to drop $100K to purchase your first home “when the economy crashes”. What people fail to realize is the amount preparation that is required to put yourself in a position to leverage such opportunity. The word “lucky” is only relative to who defines it. Luck to me equates to hard work. The harder you work, the luckier you get. I’ve heard other entrepreneurs have said the same thing.
Tip 1: Think ahead
Always think about the future and prepare not one year but 5-10 years out. I’m a strong believer in controlling your destiny and nothing in this world can change that but yourself. You have the will power to put yourself in every unpredictable scenario if you prepare for it. That can be subjective but coming from an engineering background, we are taught to handle all worst case scenarios. I apply this same principle when planning out for next 5-10 years out. You must plan, without a plan is without a strategy and without strategy is without a recipe for success. Don’t expect to win without a strategy.
Tip 2: Understand Family Finance
Understand game of family finance. There is the offensive play and the defensive play. Offensive play is your source of income. The money you trade your precious time for. Defensive play is the money you have already earned and continue to keep. It’s the act of being frugal, not cheap. Cheap and frugal are often used interchangeable by uninformed people. I get this all the time. Frugal is the act of making sure your money is spent well and not wasted. Cheap is wasting time and effort to save every dime with a narrow minded focus.
Make sure you can learn the art of frugality. Every book about behaviors of millionaires have this common trait. Which is how much they save and keep. Ignore the publicity of these people who flaunt their money. They are the 1% that does not represent the 99% of the millionaires.
Tip 3: Study
Study your investment. If you are willing to throw your hard earned money into any investment. You must study it and vet it out. You can’t expect someone else is going to do this for you and you can’t expect someone who has no vested interest to give you the right information you need to make the right decision.
For example, if you live in Bay Area but you want to invest into real estate in Portland, Oregon. You can’t expect a real estate firm to do all the heavy lifting and exposing you to ZERO or limited risk. You must study the area and you must leverage people that you trust to get you the information you need. Never throw money into an investment because an “agent” tells you it’s a great investment.
One thing I’ll tell you is most “agents” are not real estate investors. They sell homes but many don’t flip and many don’t invest in homes like your wanting too. Keep that in mind. Their job is to sell/buy homes for their clients to get a commission and hope to be your agent for future transactions.
Tip 4: Organization
Click HERE to read my next blog post to continue with this topic……
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