The first lesson I learned is that Cash is King. Before I purchased any real estate (except for our home) I read a lot of books. They all said about the same thing. You could create wealth through real estate in two ways: invest for cash flow or for appreciation but usually not for both.

Since our plan was to use our investments for retirement, still 10 to 15 years away at the time, I chose appreciation. Of course anyone who has followed the current economy or picked up a paper recently knows that the last two years has seen depreciation, not appreciation. Plus the houses that where supposedly the best for appreciation, seemed to have the most negative cash flow.

So in the future, my properties will have cash flow first and foremost. Luckily, when my properties appreciated rapidly in those first 3 years I was able to pull cash out. We used these funds to purchase other properties and to keep in a savings account to cover future negative cash flow.

Mary’s Real Estate Acquisition Tip #1: Know how you will cover those negative cash flows that come either planned or unexpected (if the tenants move out for example).

The second lesson I learned is something my Dad used to always tell me. It used to make me so mad but now I know it is true. (He used to tell me that he would get a lot smarter the older I got too!)

Daddy used to say “Expect the worst and you will never be disappointed”. Basically as an adult I know that means to always have a plan B and a plan C and maybe a plan D, E, and F. With real estate investing it is important to think of all the bad things that could happen and put something in place to cover whatever “worst” you can think of.

This is where knowing and meeting experienced investors is key because whatever a newbie can think of as the worst thing that could happen, it probably has happened to anyone who has several properties. Yet real estate is still the very best way I know of to build wealth when held long term.

Mary’s Real Estate Acquisition Tip #2: Find a mentor who has gone where you plan to go.

The last lesson I have learned is that action is vital. I am so glad that I started purchasing when I did. Yes, even with the price declines. The reason I am glad is that now we have 14 properties. In today’s environment it would be extremely difficult for us to get as many loans to buy those same properties. I was so scared to get started because I knew there was the possibility of making mistakes and yes I have made some. Yet, I read beginners guides to real estate and attended real estate clubs. Then I took action. You can too.

If you feel like you need courage, skill or more knowledge to create wealth through real estate give me a call (650-726-7472) or email me (mary[at]getabiggerdream[dot]com). As a Real Estate Acquisition Coach I work with people who want to acquire investment real estate but need a bit of handholding and direction to get started.

Mary’s Real Estate Acquisition Tip #3: Give yourself a period of time for learning and a deadline to take action.

Happy investing!