Developing the Best Real Estate Investing Strategy for Yourself

1. Get Educated

I cannot stress this enough. Education—no matter what you do in life—is important. In fact, it is likely the most important factor in success. And whether it is “street smarts” or “book smarts,” education is paramount to one’s level of success in real estate investing.

The purpose of this phase is to allow you to “test” different methods or techniques, discover your comfort level, and figure out what type of real estate you believe will work in your situation. Take your education seriously. Because as with anything, preparation is the key to success.

2. Evaluate Yourself

Education may take weeks or months. But once you have done that then you are ready for the second step: Evaluate what you’ve learned.

What interested you? What did not? What are you financially prepared for? What risk level do you feel comfortable with? Don’t be afraid of what you know you can’t do. Instead, be afraid of what you don’t know you can’t do.

3. Refine Your Education

OK, you spent months reading and watching everything and anything about real estate.  You did a hardcore self-evaluation, figured out your risk tolerance, and nailed down your situation as a whole.

Now what?

More education. Yep, you read that right. Education is also the third step in this plan.

This is the step where you refine your education. In step one, you educated yourself about real estate and (hopefully) a variety of options involving real estate investing. In step three, your going to educate yourself even more, focusing on no more than two or three options that appear to fit with your capabilities, financials, and all other aspects.

The purpose of this phase is to broaden your knowledge and dig deeper into the details.

4. Establish a Plan

Finally, it’s time to build a plan.

The first step of this phase (for us) was to develop a business plan centered around multifamily rentals. Your plan will likely be different. What the plan is does not matter; having a plan is what matters.

5. Take Action

Once you have established your plan, make sure you act upon it. Education without action is a detriment to your confidence and long-term goals.

Remember that without action, your education is like planting a garden, carefully tending to it all summer, and then never harvesting. It’s a lot of work with nothing to show for it.

If you have educated yourself and planned your strategy well, inaction should not be an issue.

6. Update as Necessary

After every property evaluation or purchase, review your plan. Tweak it if need be. Focus on what worked, what didn’t, and what you learned. This may cause you to adjust your plan.

Find what works for you, in your situation, in your area, and with your risk tolerance. You may fail a time or two. But when you find what works for YOU, repeat!