One final point about why it’s a good idea to stick to the same game plan when you’re investing in real estate: When you assemble your team of advisors, one of them will be your real estate agent.
He or she will be an expert in one particular sector—the one you’re investing in—but most likely won’t be an expert in other sectors.
Beyond that, you have other decisions to make: What kind of properties you’ll invest in, where, and what to do with them. Are you looking for properties nearby in your town, in a neighboring town, in another state, near water, urban, rural? You could: The Rich Dad strategy is buying and renting, which maximizes short- and long-term income potential.
The following are your numerous real estate options: Each of these has its own choices as well—apartment complexes vary in size, so are you interested in 20-unit complexes, 100, or more? Because the real estate world offers so many options, it’s a good idea to focus on a particular area of specialization.
So your first step is to determine what percentage of your income you’d like to make passive. Know that you can also recalibrate your goals down the road as you learn more and determine what works and what doesn’t.
Start with where you’d like to be one year from now, as well as a longer-term goal of five years from now. A lot of people, once they’ve made up their minds to invest in real estate, decide to jump right in and figure things out as they go along.
Your assets, as you’ll recall, are the things that generate wealth for you, such as investments, savings accounts, stocks, 401(k) plans, mutual funds, real estate, or a business that you own.
Your liabilities are all the things that take money away from you, which might include your credit cards, the remaining balance on your car loan, or the mortgage on your home.
We’ve all heard the expression, “Those who fail to plan, plan to fail.” In real estate, this saying certainly holds true.
It’s essential that you develop a workable plan and start building a team of experts before you get started, so that you start off on the path to success.