Zeona McIntyre is a Real Estate Investor and Airbnb Property Manager living in Boulder, CO. Zeona owns rental properties in two states, and manages 15 properties (& counting!) on websites like Airbnb.
Ever wondered how to make passive income through real estate investing? Zeona is passionate about helping others free up their time through passive income so they can discover the life of their dreams. That's why she teaches her clients how to invest in real estate. Well, more specifically, Zeona helps clients understand how to invest in vacation rentals and short term rentals.
Want to learn how to make passive income? Check out Zeona's actionable, very clever real estate investing insights below. She'll get you that much closer to understanding how to get started in real estate investing.
13 Point Step-by-Step Guide: How to Invest in Real Estate
1. Find Your “Why”
If you think money alone is a driving force, think again.
Money is not going to be enough to propel you forward when:
- you’ve gone through three consecutive inspections on separate homes only to repeatedly walk away (true story)
- you get the call that your septic system backed up and your basement is flooded with poopy water (also a true story)
You need to dig deeper than money for your "why". Start by asking yourself questions: Do you want to be able to share your wealth with friends and family members? Is it that you want time to pursue passion projects that you may not know how to make money with (yet)? Are you craving a deeper feeling of freedom that lets you know you have say over where you want to be and when?
Perhaps your "why" is that you want to drop down to working part time, or stop working all together, in order to finally tackle your business bucketlist, which brings me to…
2. Know your Goals
Having very general goals, or none at all aside from “I’d like to be rich someday,” will get you nowhere fast! You need to get super specific here, just like with your "why" above. Spell out your goals, which may sound like, “I want $600,000 in stock market investments, and a house that's paid off” or “I want to make $10K a month.”
Then work backwards.
You may not know exactly what it takes to get there, and that's okay! You don’t need to know. Just do some of the loose math to figure out a timeline. For instance, if I buy a home that gives me $1K in profit a month then I can turn that savings into two more home purchases at the end of the year. With that goal, I can be at $10K in 5 years if I can purchase two homes a year.
We all stand in our own way.
Either we don’t believe in ourselves and don’t strive for greatness, or we hit our own glass ceiling of joy and success only to self-sabotage and plummet back to where we started originally...or sink even lower.
This may sound like an intangible step, but it is one of the most important. I highly recommend to my clients who want to make big changes in their lives to develop a morning practice. Every morning before you look at your phone, check your emails, read the news, or perform some other routine, find a quiet space to sit with yourself and meditate on your day, dreams, and goals. Then write out what comes up for you. Write down the fears, blocks, ideas, and/or excitement.
Lastly, use a few more minutes to visualize yourself in the final stages of achieving your goal. This is why it's so important to have a concrete goal you're working toward! Visualize what your life will look like and feel like when you have reached your greatness.
4. Plan of Attack
Figure out what tools you have at your disposal. Can you qualify for a mortgage on your own, or do you need a co-signer? How much money do you have for a down payment, closing costs, and renovations? Do you have a potential partner who is excited to get started in this business, too? These are all great questions to ask yourself.
Also study up on creative financing tactics such as using credit cards to finance your home loan, borrowing from your retirement accounts, private lending, or seller financing…to name a few.
5. Know your Niche
There are a million ways to slice Real Estate. In each category, I bet you can find someone who has made themselves a millionaire using that strategy.
But this goes back to knowing yourself, your interests, and your strengths.
When I got started, I knew very little about what renovations cost. I didn't know anything about renovation timelines, either. But I knew that I needed to purchase homes that were already renovated. I knew that I just wanted to get them rented out as quickly as possible, so I needed something ready to go.
Essentially, I needed properties where I could show up, furnish them in a week, and have guests in the properties the day I completed the final touches.
Even though I consider myself an expert in analyzing and buying properties for the intention of creating Airbnb and other vacation rentals, I am not diluted enough to think I am an expert in real estate across the board. I am a pro when it comes to teaching others how to invest in vacation rentals and short term rentals, and how to make passive income from those rentals. But I'd be lying if I said I wasn't out of my element when it comes to the nuts and bolts of renovating a rental property.
Even after dozens of walk-throughs, negotiations, and blurry-eyed late nights pouring over inspections, I know that if I changed my business model into house flipping, there would be a good chance that I would fall flat on my face. I'd potentially make a $40K mistake that I thought was only $5K.
Point being: Know Your Niche.
6. Where To Buy?
The most common mistakes I see people make are:
- they use all their money to buy themselves a personal home first
- they insist upon buying in their hometown
The cold hard fact is: you might be living in an inflated market.
Sure, I have the dream (like many folks do) to have a home in each of the exotic locales and high class cities where I want to spend my time. But the truth is those places don’t have the profit margin that my little cheapies in the Midwest do.
7. What To Buy?
Again this goes back to Knowing Your Niche. Are you flipping? Single family homes usually sell best (but this can vary by location). Do you want long term or short term rentals? I prefer fourplexes or duplexes so I can have more than one unit while having only one building, lawn, and basement to worry about.
What about condos? Although condos sell fairly well in certain high density areas, you have to consider the HOA rules and bylaws (and how those will change and challenge your big plans in the future) before you consider that kind of purchase.
8. Building the Team
Every investor needs an Investor’s Agent. They are a very different kind of animal than the Real Estate professional who shows people three homes so they can pick one in which to live happily ever after.
Investor’s Agents know you may have to see 10+ places before you find a keeper. They have sharp negotiation skills and will go to bat for you. They have trained senses to pick up on things like a foundation crack that could cost you $10-40K, the smell of a moldy basement (don't get me started on the costs for this one!), and more.
Asking for recommendations from friends or choosing a real estate office blindly from a Google search is likely a huge waste of your time. Luckily there are all sorts of awesome investor resources online these days. My personal recommendation would be the forum/community area of BiggerPockets.com.
Never heard of the Bigger Pockets podcast?! Where have you been...? They cover every aspect of how to invest in real estate. On their website, you can post “Looking for an agent who specializes in working with investors in X town.”
Within a day, you will likely have a few contacts from this trusted real estate industry source.
9. Analyzing the Area
I could write an entire blog post on this subject alone, but in the interest of time I will point back to Knowing Your Niche yet again. If you are buying a single family home (to flip or for a long term rental), you will want to look into popular neighborhoods, the walkability to the nearest restaurants and shops, the nearby schools, and so on. Basically, find out the "whys" that your tenants/customers will have for wanting to live/buy there.
As much as this gets tossed around in real estate, it really is all about location. Because you can change everything else about the property but the location.
10. Negotiating the Deal
Investors always say that you make money when you buy the place not when you sell, so it’s important to buy right. Truly understanding your market helps you do this.
I think a common mistake made in this area is that novices want to lean on the agent. Although you may find an agent with a heart of gold who really just wants to put you under their wing and get you the best possible deals, more often than not they are looking out for their best interests. Duh! Not to mention that most agents have never bought a home in their lives (!). They are likely not investors, so don’t go delegating your know-how to them.
The good news is all the info you need is out there on the interwebs. I personally love Redfin.com, a website that closely and most accurately reflects the MLS (the listing software agents use). With Redfin.com, you can research selling trends, how long a place has been on the market, how many times they dropped the price, etc. These are all essential in figuring out what to offer and what to expect.
11. Inspection, Inspection, Inspection
I don’t know about you, but I’m definitely not about to slither under a house, walk on a roof, or climb into a hot attic...but my inspector will!
Finding a trained ninja inspector is your top priority (likely your Investor's Agent will have some recommendations). My agent and Inspector team are the reason I can confidently buy a home from 1,000 miles away, sight unseen, only to show up on the closing day to get ‘er furnished.
I know, this might sound radical and crazy risky to a few out there, but it really isn’t. The reality is, I wouldn’t know what I was looking at anyway. Think about it. I don’t know the first thing about electrical wiring, sewer lines, roofs, and structural soundness. But I am a pro at learning a new market within just a few hours of research, finding excellent buys, and negotiating bottom dollar deals.
We’ve got to know and play to our strengths, and leave the rest to the pros.
12. Don’t Waste a Second
Time. Is. Money. We all know this one. So how can we optimize?
I usually fly in to see a property a day or two before closing to pre-buy items so I am ready to move in and furnish it the second I have the keys. If you are doing a renovation job, schedule your close for 8am on a Monday so your crew can be there ready to work.
My only word of caution is to not do any work on a home until it is 100% yours, even if you have an "okay" from the seller. Sales can fall through at any stage of the game. Protect yourself.
13. Congratulations! Now, Rinse and Repeat!
Keep my information close, and make sure to reach out with any and all questions!Here are my social media outlets:
Instagram; Facebook; LinkedIn; Twitter
A lot goes into understanding how to get started in real estate investing. It's wise to make sure each of the points in this step-by-step real estate investing guide receives your full attention, since having your bases covered at the outset will make your passive income opportunities easier to manage.
For more tips and an in-depth blog post about "How To Analyze an Area", visit my website at www.ZeonaMcIntyre.com. If it's not live by the time you click that link, it will be shortly afterward!