Wednesday, January 30, 2008

Making Money in Real Estate #1

I received a request to share some of my experiences with real estate. I thought I would just post my thoughts here in case others are interested, and so I can continue to add more posts as they come to me. This is my perspective, based on my knowledge and experience. Take it for what it's worth. I'm 34 years old. You're never to young or to old to start. I hope this can help some of you.

Like poker, you need a bankroll for real estate. So for the college guys here, you've got to graduate and hunt down a good job. This, of course, is where (for those of you who don't have money...yet) you start to build your bankroll. Save a few dollars. But more important than that, make MORE.

Work hard at your job to get promotions, or after a couple years, switch jobs to make more money. Most big leaps in salary come from switching jobs, not from staying with one employer. This has been my experience as well. And keep saving. But again, more important than saving, just make EVEN MORE.

Of course, you can add to your real estate bankroll from your poker bankroll, and if you already have money, then you can skip all this.

But not only do you need your bankroll, you need a tight image. And I'm talking about credit scores. This is important once you're ready to invest in real estate. Establish your credit by opening a couple credit cards, using them, and paying them off (you only need a couple). If you already have credit, pay your bills on time and avoid collections. You need a credit score of 720 or higher to get the best loans available. This equates to dollars saved and flexibility. Do not accumulate big balances on credit cards, this doesn't look good, and obviously it's best for you to maintain low balances. My credit score is at 800, which is a very high score, and which also gives me power and flexibility.

You've got the bankroll, you've got the image, but don't go pro! Like poker, you can do real estate as a side thing and not jeopardize too much. You'll know when you don't need that job anymore...that's when the hours you put in are pennies compared to the money you could make in real estate (or elsewhere). Don't risking everything.

Ok, those are the very basics, mostly common sense but just reinforcing ground zero.