Dave Ramsey Gives the Rundown on How to Get Started in Real Estate
As someone who has spent the better part of the past year tripping over their own feet while trying to dip a couple of toes into the real estate market, I can attest to the fact that it can be rather intimidating.
After one begins to sink themselves into the market a bit, the knowledge begins to flow. Let's just say that there's a lot to learn and one of the best ways to learn is by trying it out. With that said, there are a couple of things that would've been great to keep in mind when starting out. Dave Ramsey does a great job of laying them out to us as he gives us the rundown of how to get started in real estate.
I took the liberty of picking out a couple of my favorites that hit the closest to home in my own personal real estate endeavors.
Don't be in a hurry
This seems like common sense but hear me out here. You're going to want to REALLY slow down. Once you have the obvious out of the way like price target and geographical area, wait until the perfect deal comes along.
In my personal ventures, I've learned that eventually, something will come on the market that's too good to pass up. In my own personal experience, luckily, I've had other deals fall through for one reason or another before one of those "Too good to be true" deals fell in my lap.
As with many other great deals, it's going to take a while and you should be ready to strike when you find it. Don't be in a rush just to grab something, though. Don't worry, your cash isn't going anywhere in the meantime.
Know the market
This seems like a no brainer but I would buckle down here as well. In Ramsey's advice, he says to look at a lot of houses. We agree.
Before you even do that, though, take the time to drive past some potential houses and keep a map.
This is one of those early learned lessons that could've been learned easier. After pulling into a couple of areas and immediately feeling threatened for my personal safety, I learned that it was best to keep a running log of what I liked and didn't like. It would better serve myself and my agent to not waste time heading to areas that I would shut down before even looking inside the house.
After looking for a couple of months, this is something that you'll probably end up knowing like the back of your hand. At the beginning, though, don't be afraid to log some miles to really get a better idea of where you'd like to be. Location can be key to a cash flow only property and a property that's going to appreciate with the market or better.
Know Where Money is Made
I may not be the seasoned vet with real estate just yet. However, what I am very well-versed in is making sure that I don't get screwed over in a deal. Coming from the world of used car flipping is brutal. Everyone is looking to pull a fast one on everyone else and you quickly learn how not to get burned.
One of the best ways to not get burned is to assume the worst case scenario unless you know better. In other words, make no excuses for a seller and don't brush anything off. You're going to want to make sure to dissect every potential money swallowing detail.
At the end of the day, it's going to be these overlooked details that come back to haunt you.
Furthermore, Ramsey tells us that money is made primarily at the buy. Getting the best deal up front can really protect you until you learn the ropes. Don't be afraid to be cheap until you figure out where taking risks is appropriate. Even when you know where to take risks, sticking to an aggressive negotiation could end up making a huge difference.
As far as what Ramsey thinks, he says that his offers will generally come in at around 70% of the actual value of the home.