ONE BIG DOOR
In my previous career as a nurse, I worked with A LOT of student doctors. They have to learn, just like everyone else. But for some reason, the “seasoned” doctors used to love to berate them for every little detail. I worked for many years in Intensive Care Units, so we are meticulous about our details—they absolutely matter. But the feedback can be delivered with importance and respect at the same time.
We used to remind all those student doctors that “no one is BORN an expert.” Everyone who continues in medicine had to start and keep learning. I was recently reminded of this in the real estate investing world.
If you’re early in your investing career, each “simple” door to a house feels as massive as the double door in this picture. It’s not your imagination, and it’s not an excuse! There are a lot of details to figure out: negotiating a purchase contract, financing, repairs, tenants, paperwork, etc….
It can be overwhelming, but there are great ways to deal with the learning curve, so you can move towards your financial freedom.
DIY? Oh, you know who you are! These real estate investors will dive in and learn as they go—nothing wrong with that! It might require extra time, and there might be extra stress—just saying. Your best “defense” is a great team: lawyer, accountant, mortgage broker and real estate agent are all necessary. The beauty of being a beginner is that you can literally start anywhere, then improve your skills and your team as you move forward.
However, sometimes the most efficient way to open that first investment door is to partner with someone else. Working partners and money partners blend their skills and assets all the time. As long as you bring something of value, you’ll be able to find a partner for that first or next deal. And if your ego is willing to take a back seat to your open-mind, the learning opportunity is phenomenal!
Learning partners often bring the down payment and the mortgage qualifying ability to their working/teaching partner. Sometimes the working partner just brings a deal, and then the learning partner is good to go on their own. This is called wholesaling—where you literally buy a deal that has been negotiated already.
In a different style, the learning partner enters into a Joint Venture with the working partner. But in this case, the learning partner is involved every step of the way. Sometimes they will even go “shopping” for deals, much like a couple would shop for their first home together. The working partner will share tips about repairs, negotiation, advertising, renting, and the dreaded paperwork.
Yes, the learning partner shares the profits on this first deal. And yes, the working partner shares expertise and resources and team members who have already been vetted. Partnering with someone with experience can take A LOT of fear, time and stress out of that first purchase!
Another hidden benefit to a learning Joint Venture is that you literally have a backup plan for almost everything. Family emergency? No problem, the working partner takes over until you have time again. Hail storm that requires complicated repairs and insurance claims? One or both of you can work through that together. Moving out of town for a great job opportunity? You can amend that Joint Venture contract, and the working partner now manages the house and the tenants—still keeping you as informed as you choose to be.
Everyone starts as a beginner real estate investor. The learning curve on that first big door can be as steep or as supported as you choose. Real estate investing is literally a “pick your own adventure” story. Good luck out there! And a very deep Thank you to all of our teachers on our journey to financial freedom!
