Editor: This is the year that I decided to become more educated on real estate. We even did several episodes regarding this investing strategy on Money Meets Medicine, feel free to check them out. Peter takes us back to the basics in today’s Saturday Selection, originally published on Passive Income MD.
I’ve said it before, and I’ll say it again: real estate investing is one of the best ways to reach financial freedom. Not
only does it provide consistent, relatively predictable cash flow, but when done right, it can be very passive.
Of course, sometimes taking that first step can be daunting, to say the least. I understand this very well; I was frozen in inaction for quite a while before I ever made my first investment. Fortunately, I finally took that step, and it’s been a great journey ever since.
If you’re interested in making that first investment, and if you’re like I was, you’re probably wondering how to just get started. With all the options out there, where do you begin?
That’s the purpose of this post: to help you take that first step on your real estate investment journey. Whether you need a direction or just some extra motivation, it’s my hope that this can be a starting point.
Determine Your Why
This is a step that most people never really consider. But I can’t stress enough how beneficial it is to sit down and truly assess your purpose in pursuing financial freedom.
Ask yourself these questions and give honest answers. If you can write them down, even better.
- What will my days look like when I’m financially independent?
- How soon do I want to reach this goal?
- How will financial freedom impact me and my family?
- Do I want to continue working?
- How much passive income do I need to cover my current expenses?
Answer these questions in concrete terms. It may take a few moments of sitting back and actually visualizing the question before an answer will come. For example, the answer to the question “what will my days look like when I’m financially independent?” might be:
I will spend no more than four hours a day at work. I will pursue a hobby I’ve been putting off and spend more time with my family. I won’t be stressed, worrying about work, because my streams of passive income cover my basic needs.
You can write whatever you want, of course, but the more specific, the better. The point is to put a concrete endpoint in your mind so that you always know what you’re working toward.
Define Your Goals
The next step is the most important of all. Now that you’ve determined why you want to reach your goals, it’s time to actually define them.
Again, take some time with a pen and write these down. There really is something about putting words on paper that makes them more concrete.
Take your visualizations from the previous step and make a single paragraph. For example:
I will continue working, but at only half of my normal hours. I will achieve a total of $20,000 in monthly passive income within 10 years. This will allow me to spend more time with my family and more time doing what I enjoy.
This is a good goal because it’s specific, measurable, attainable, relevant, and time-bound (S.M.A.R.T– read more about that here).
The reason why these first two steps are so important is that they keep your goal always at the forefront of your mind. If you set out on your journey with a clear destination in mind, you are much more likely to reach it.
With this step, the journey begins in earnest. Of course, to reach your goals in the most efficient way possible, you need to choose the shortest path. This is where education comes in.
Read books (a list of my favorites). Listen to podcasts (like these). Read blogs (like the one you’re on right now). There are hundreds of resources available to you–all you have to do is make the time to absorb them.
The next step is simply finding like-minded people and connecting with them. Being a part of a community of people working toward the same goal as you provides not only knowledge, but motivation.
In fact, as I’ve discussed in this post, you are the average of the five physicians you spend the most time with. If you surround yourself with motivated, goal-oriented people, you’ll find yourself to be motivated and goal-oriented.
So how do you find people like this? Well, fortunately, the Internet has made this easier than ever.
There’s the Passive Income MD Facebook group, for one. You could also attend a conference (online or in-person) or a local meetup. You could even just ask your colleagues for advice. You may be surprised how useful it can be.
Armed with all the knowledge you now have, it’s finally time to make the big step: investing. But where to begin?
Well, as the title of this post might suggest, I believe that real estate is a great (if not the best) option. But while that slightly narrows it down, there are still a lot of options.
Real estate investments exist on a spectrum from relatively easy and stable (with lower returns) to complex and risky (but the potential for much higher returns). To get a good idea of this, be sure to check out this post.
For someone just dipping their toe into the water, I recommend starting with crowdfunded real estate. Not only is the minimum investment usually very low, but crowdfunding also provides little risk with decent returns.
No matter what route you choose, it’s vitally important to perform adequate due diligence. Research the platform offering the deal (the sponsor), the market, the property managers–everything. Make the most informed decision you possibly can.
But don’t get so caught up researching that you never make a choice. No investment is guaranteed–and that’s okay.
The bottom line is that once you reach this step, you just have to do it. It can be intimidating, even scary. But once you’ve narrowed down just how you’ll invest, you simply need to follow through.
If you’ve been on the fence about real estate investing, just wondering how to take that first step, think of this as a gentle push.
The initial stages are often the hardest–even choosing a direction can be a tricky decision at first. But once you begin, you’ll be hooked.
The key is to identify your motivation, learn as much as you can, and then make the investment. Don’t worry about making mistakes; they’re bound to happen, and that’s okay. As long as you’re moving forward, you’re making progress. Take that first step. You won’t regret it.
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If you join the waitlist, you’ll have access to $300 off the price when it launches and if you use my link, you’ll get some additional bonuses at no additional cost to you. Sign up here!