There is always hesitation when we begin to do something new. I have taught real estate classes and have given free finance seminars years ago so while the subject matter here is not new to me, this media is. As I thought about starting this I realized that we all hesitate to get started in something that is new to us.

There is always a lack of confidence in doing something new. For me I guess it's the confidence in my writing skills, I know I tend to be very wordy sometimes. For you, it might be because you are not confident about real estate laws, financial programs, marketing issues or maybe how to work with a Realtor, what ever it is, you will get over it!

When you have knowledge and command of the subject matter in your business arena, whatever that may be, you'll be more confident in your thinking, in structuring your business, presenting it to others and in succeeding.

I'm going to take a two front approach to this. First, action, things you need to go out and do, walk and talk, meet people, find properties etc. The Second is a study bash, things you need to study on your own or look into during the evening after work. Being in the real estate business is not an 8 to 5 job, work when you want to and make money, the more you work, the more money you make, so it will be a 24/7 work schedule, whenever there is a need to make money. If you love what you do, you will want to eat and sleep real estate. 

 So here is your daytime activity.

You have already decided to get into the real estate business. Are you aware of all of the professions related to your business? How many specialists are involved in your business to make it work? It's good to know what each of these support people do and basically how they do it. Not only that, but regardless of what aspect of the business you intend to work, every one of these people can give you informayion that can translate to money! Who should you meet and talk to?

If you are going to be a successful investor you will need a good relationship with several Realtors. Get to know agents that specialize in different areas, geographic areas as well as areas of specialization. These people can be your bread and butter if you know how to use their skills. Know what they do and how they do it.

You will need a good banking relationship with not just a bank, but with several banks. That does not mean you have to open bank accounts with them all, but you need to have points of contacts, loan officers that will assist you in explaining the loan products they offer and what the rules are.

You'll need to talk to at least two mortgage brokers. You can get money from these guys and they are not as regulated as institutional lenders (banks) so they have some flexibility to do all kinds of things that can help you later on.

You'll need to know a a couple of note brokers. They are really another source of funding a deal or getting funds to a seller. While they have some good ideas about creative ways of doing a deal, most transactions will be harder to accomplish because of how the broker makes their money. This is not a place for beginners to try and do deals, but just get to know at least a couple of them.

Go by and meet the people at diferent closing and title companies, they are my favorites to see because when I see them, they give me money! Ask them how long it takes to get a deal closed and what they do to get one closed. Buy these people lunch and pick their brain on title transfers and what the proceedures are. There will be times that you really need a deal closed, like in hours or it will fall apart.

Go to your courthouse to the Recorder's Office, where the deeds are filed. Meet the clerks. Why, because when you walk in with a quit claim deed or an option contract, some will sit there and read every word and give you reasons why it can not be filed, (it's a bureaucratic thing). If they know who you are and trust you, you can walk in  and drop off your documents and know they will be filed!

Speaking of documents, interview several attorneys, you will need one in this biusiness. I have blogged about hiring an attorney on this site so i won't go there. Just remeber, you are hiring them so see if they understand the needs of investors. Don't waste their time, know what you want to ask before you get there and if you are on the clock, never allow them to give some case example as you are just paying for war stories. What you want to know is, can or should we do this, yes or no? And if something is wrong, can it be fixed and how?

Speaking of fixing things, you will also need to know a good contractor or several in the trades. Know a plumber, an electrician, a carpenter and a HVAC (heating and airconditioning) technician. Then you should know people that make your property look good, like sheet rockers, window/door people, flooring specialists, cabinets and counter tops and landscaping folks. Then you will need a handyman, a jack of all trades for those little fix it jobs. Make sure you praise these people when they work for you, good job and all that, everyone takes pride in what they do and praise is cheap and if they like you, I mean really like you, it might show up in your bill.

At this point, you should be pretty busy during the day, you have alot of people to meet now! As I said this can be a 24/7 business! If you don't believe me, wait til a Realtor calls to see if they can deliver a contract at 10:00 pm! Now in the evening let's examine how we are governed.

  KNOW WHAT TO EXPECT!

Knowing what to expect through a real estate transaction will put you at ease throughout the transaction process. As you will see later on, almost every aspect of the real estate business as well as related functions are regulated at the state and federal level.

Consider some simple functions in the beginning of a transaction; The advertising that caught you eye about that listing is regulated. If you are a real estate agent your ads must conform to federal and state housing laws, HUD sets guidelines. If the home is for sale by a developer that has used certain types of funding, they must advertise in accordance with (IAW) applicable laws.

When you call the Realtor whose name is on the sign and inquire about the asking price you'll likely speak to an administrative staff member. They can't give you the price, because by law only someone with a license can provide the public with pricing. 

At the time you meet the Listing Agent, he or she will give you a pamphlet required by HUD explaining the different types of agent relationships that may exist and they will tell you what their agency relation is before you get in their car. 

When you get to the property to look at it, you'll see the Realtor fumbling with a box to get the keys. This lock box is provided by the local Board of Realtors and that lock box belongs to them or is under their control by agreement. Agents must follow certain proceedures in key control from the time the seller gives them the keys at the time of listing until the keys are delivered to a buyer after settlement.

Now, I'm not going through every little phase of a deal but the point is that there are very small actions taken, functions and proceedures that may appear to be insignificant that are in fact regulated by laws and by contractual agreements

The difference between laws and contractual agreement may be obvious, but violating either may spell trouble. If you break a law, you'll get to meet the judge, if you break a contractual agreement, you may be sued in civil court and you'll get to meet the judge. Both meetings can cause you trouble, from going to jail to losing thousands of dollars more than you thought you would ever have in a deal. A civil lawsuit can ruin your life for years.

So, the very first step of getting into the business better be understanding the rules, regulations and laws that govern your every step, what you say and even how you say it!  Even if you are not going to be a Realtor, understanding how they operate and what they are required to do can be very important  to you succeeding. If you ask a Realtor to do something that is illegal or violates their code of ethics do you really think you will earn their trust and confidence? Probably not. And the word travels very fast in real estate circles.

Every state has a real estate department that governs and administers state law pertaining to real estate transactions and professionals related to transactions.

You need to go to your state web site and find this agency. See what they do and expecially who they regulate. Even if you are not going to get a real estate license, go to the statutes (Search-Real Estate Statutes State of ______). Read the statutes carefully and see what agents and brokers do, how they are to conduct business and what happens if they don't. You need to conduct your business closely to the ethics standards and resposibiities expected of an agent, as applicable. 

Later, we will look to kinds of transactions and what basic instruments are used in a transaction. You can also see what kinds of properties you should be looking for if you are getting started without money in your pocket.

Good Luck,

Bill Gulley

American Realty Institute, LLC