When you were a newly minted high school graduate, you didn’t know what all the work possibilities and realities were. During college, you may have changed your major more than once as you learned more about yourself and the possibilities. When you got into the work world, you probably changed jobs at least once, and maybe you even changed careers. Expect a similar learning process as you build legacy wealth.
Many first-time investors start with market fantasies and inaccurate expectations about being a landlord. That’s normal. Most investors change their ideas as they learn about the market and the realities of the market and landlording.
You learn by doing, whether you’re riding a bike, swimming, mastering your job, or landlording. Smart preparation can help you avoid unnecessarily costly lessons.
It’s prudent to do your homework. A great broker will help you learn about apartment investing and yourself. We want you to clarify your values and investment objectives before you consider investment opportunities. That way you’ll be able to make wise decisions more quickly.
Every investment involves some risk. Low risk means avoiding folly, unnecessary risk, and the mistakes that come from not knowing what you don’t know. Your broker should help you learn about both investing and the market.
I suggest new buyers spend “windshield time,” driving different neighborhoods. An afternoon of windshield time will help you understand why one zip code sells for 10% more than the neighboring zip code. The properties, cars, clothing, and recreation tell you a lot about the neighborhood and the income and education level of the residents
Every apartment building is unique. You can’t understand the differences unless you analyze many opportunities. Landlording is a contact sport. You can’t learn what it’s like just by reading or by analyzing a spreadsheet. You must get out and go and see. You learn by doing deals and confronting unfamiliar situations.
Where you should you start? I developed four specific reading plans for Building Legacy Wealth. You start your learning journey where you are today, whether you’re a Novice, Apprentice, Journeyman, or Master apartment investor.
No matter where you start, investing in apartments is a learning journey and a great way to build legacy wealth.
Terry Moore, CCIM, is the author of Building Legacy Wealth: How to Build Wealth and Live a Life Worth Imitating. Read his “Welcome to My Blog.”