Blog | Real Estate

9 Tips to Become an Expert Real Estate Investor

Here are Rich Dad’s expert tips for real estate investing success

Summary

• Anyone can become a successful investor, as long as they have the financial education

• Becoming a real estate investor is the first step to unlocking financial freedom

• With real estate investing, you’re in true control of your income

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You might be the type of person who wants all the information before making even a relatively small decision—from comparing labels at the grocery store before making a certain dish, to reading reviews about a movie before committing to buying a ticket.

Well then, you can probably imagine the great deal of care it requires when making a decision on something large, like real estate. It might even overwhelm you to think of meticulously researching a property and crunching the numbers to see if it’s even profitable.

But here’s the thing, successful real estate investors don’t have any special powers. They weren’t just born with a knack for investing; and they don’t rely on other people to figure it out for them. Before any successful investor began their journey, they took the time to invest in their own education — and that’s exactly how to become an educated real estate investor.

3 reasons you should become a real estate investor

Before diving into the nine ways to become an educated investor, it might be helpful to understand why real estate investing is so important when it comes to taking control of your financial future. After all, if you don’t see the value in it, why would you spend the time learning about it?

The following are three reasons why you should become real estate investor:

With every little victory you accomplish, your confidence increases. Increased confidence leads to higher self-esteem. Higher self-esteem leads to greater success, which ultimately leads to the greatest gift of all: freedom.

1. No limits on income.

   Because corporate glass ceilings are still a “thing,” and there’s no true security in the traditional 9-5, employees are still limited in the amount of income they can make. On the contrary, you are completely responsible for and in control of the amount of money you make as an investor — and that’s why it’s so important to learn how to become an educated investor, as the more you know, the more you’ll earn.

2. Increased self-esteem.

   Have you ever wondered how to build confidence? It’s not unusual for one's self-esteem to be linked to his/her income. Being dependent on anyone (like a spouse or boss) for your financial freedom can lead to a reduced sense of self-worth. You may do things you otherwise would not do if money were no issue — like stay in a bad marriage, keep a job you hate, or settle for a ho-hum life that doesn’t bring you joy.

3. Control of your time.

   One big impediment people have when it comes to investing, is time.

   Here’s the good news: Real estate investors are in control of their time. Investing is something you can do part time or full time. It is something you can do from home, from the office, anywhere; it accommodates your life and schedule, not the other way around.

   Being an investor allows you to spend your time how you want and when you want, whether it’s with your children, with your spouse/partner, on vacation, or looking at potential deals. You can plan your days however you wish to, prioritizing what’s most important to you.

   

Becoming a know-it-all

Ok, did those three reasons to begin investing in real estate pique your interest? Then it’s time to learn the ropes.

There are few things riskier than an investor who has no idea what they’re doing. The reality is that anyone can acquire knowledge and sift through the information available to find out what they need to know. Now it’s time to learn how to become an educated investor:

1. Learn the lingo.

   Understanding the definitions of financial words will greatly increase your knowledge of the subject. Start with terms like assets, liabilities, ROI, and gross vs. net income. Then, dig deeper. Every time a new word comes up in conversation or in your readings (which we’ll discuss below), stop and look up the definition instead of glossing over it. Soon, you’ll be speaking the language of investing, which will allow you to connect more dots in conversations and while watching financial news programs. Honestly, this is one of the biggest battles when figuring out how to build confidence.

2. Figure out the numbers.

   If you intend to reach your financial dreams, then you have to become very comfortable with basic addition, subtraction, multiplication and division. Consider every investment you are pursuing as a mystery to be solved and numbers are the clues that guide you.

3. Think like an accountant. You’ll also need to understand the three financial statements: income statement, balance sheet and statement of cash flow. Note: You certainly don’t need to be an accountant, or have a degree in finance to learn how to read and understand these foundational tools. Once you’ve had a little practice, they’ll be a piece of cake.
4. Read and listen.

   There are countless books, blogs and podcasts on the subject of real estate investing, many geared toward beginners.

5. Find a mentor. Seek out a few seasoned, educated investors and pick their brain. Behind every successful investor is a person who likely made some costly mistakes early on—see if you can find out more about where they went wrong and not just their successes.
6. Attend workshops. Free seminars can kick-start your path to educated investing and taking control of your financial future.
7. Question everything.

   It’s one thing to seek advice from a trusted source, like a business partner or financial adviser, but it’s another thing entirely to take everything you hear as gospel. You must think for yourself, so that you’re making the most informed decisions possible. Try asking these questions when presented with advice or opportunities: Does this make sense for me? What are the pros and cons? Will this get me closer to my financial goal?

8. Ongoing education.

   Educated investors don’t simply gather all this knowledge and then think they’re done. Learning is a lifelong pursuit because things change. Laws, regulations, technology and terminology adapt over the years, so keeping current is an investment in your future. Real estate investors who allow themselves to become stale will no doubt face numerous risks: losing momentum, legal ramifications, missing out on opportunities, etc.

9. Gain experience.

   At some point, you have to decide you’ve learned enough to pull the trigger and make your first investment. Hopefully you will have gained enough knowledge to avoid some of the most common pitfalls. But you’ll likely make some mistakes and experience a few setbacks along the way. That’s perfectly fine. In fact, it’s OK to fail. What’s important is that you learn from those situations and apply that to your next investment. You’ll get wiser with each go-round.

Also, before you plunk down any of your hard-earned money, take some time to read How to Buy Your First Investment Property. This free eBook is chock full of the secrets Robert and Kim Kiyosaki have used throughout their many decades as real estate investors — from finding the right property to closing the deal.

Still feeling a little nervous? Of course you are! Having some sort of fear in the early stages of your investing life is completely natural. But if you let that fear paralyze you and keep you from moving forward, you’ll miss out on reaping the rewards of your new found education: financial freedom.