1/26/23, 2:40 PM The 6 Steps to Create a Real Estate Investing Road Map

BUSINESS

The 6 Steps to Create a Real

Estate Investing Road Map

Helen Chong Forbes Books Author

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Helen Chong
Helen Chong is the founder and CEO of Haylen Group and an official
ForbesSpeaker.

Nov 25, 2019, 10:41am EST | 3,197 views

Know your options BIGSTOCK

When I speak at conferences and workshops, I meet countless

people hoping to invest in real estate. They recognize the amazing

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opportunities and benefits that make real estate more attractive

than traditional stock investments. These advantages include
leverage, tax-saving incentives, multiple exit strategies, better
control over the investment’s value, and the potential for greater
financial security. While these people are all apt to discuss theory
with me, only 5% of the crowd will typically take action to invest.

After many years of watching this behavior, I found that in order to

encourage new investors to take action, I need to draw out a
roadmap for them to follow easily. I followed six guidelines when I
first started investing in real estate and I follow the same guidelines
when I coach my clients through the real estate investing journey.
Let’s flesh out these six steps so you can start to create your
roadmap:

1. Identify Your Main Investment Objective first: 

Are you looking for cash flow to supplement your income?

Are you looking to build portfolio and equity for long term? 

Do you need quick cash? 

2. Gather Available Cash Options:

You should determine how much cash you are able to gather
first, then you can determine other financing options (step
3) to bridge the difference. 

3. Financing Options: 

Conventional financing: best loan rate offered by larger

banks but they typically have the strictest guidelines. 

A mortgage broker: they can help you sort through

hundreds of lenders with more flexible terms. 

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Hard money lenders: many people shy away from them

because of the hefty loan fees with 1-3% origination point
and 7-12% interest rate options. Hard money lenders
typically lend 65-70% of the purchase price or in some cases,
of the after repaired value. They are interest-only payments
with 6-24 months loan term, and they can fund your deal in
less than 14 days. As long as you are still making a profit,
this option is the easiest way to get your foot into the real
estate investing world and not missing the opportunity. 

Credit cards: One of the methods I have used which can be

risky for an undisciplined person. I called all of my credit
card companies and requested a credit line increase. I spread
my balance through numerous cards to ensure the balances
were under 40% of the credit limit (to maintain my good
credit score). Credit card companies sometimes send out
credit card checks with an introductory rate for 12-15
months, and 2 points transaction fee. I have used one of
those credit card checks and used it as a bridge loan for one
of my purchases. It’s a much cheaper option than a hard
money lender. But I had to make sure I had several good exit
plans to pay it back in full within the introductory time
period.

Private funds: Lastly, family members and friends who

may have some savings or retirement funds that need to
earn a better return. You will need to prepare an investment
presentation to earn their trust to invest in you. That leads to
the following steps. 

4. Market Research

Where should I invest? This is one of the most common

questions I get and many people get stuck here. There is no
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one-size-fits-all answer, therefore you must conduct market

research to identify areas with strong potential. There may
be areas within a reasonable commute time from a MSA that
are considered emerging markets and on the upswing of the
real estate cycle. You should also study your city’s general
planning to see if there is any revitalization programs in the
works in certain neighborhood pockets. 

5. Exit Strategies

Having several exit strategies is important especially if you

plan to ask for private funds or hard money lending to
reassure your investors that you do not take their investment
lightly. Will you be: Buy, rehab and flip? Or Buy, Rehab,
Rent and then Refinance it out into cheaper conventional
loan or do a cash-out (BRRR strategy). If you can’t flip for a
profit, can you do seller financing? Or renting it out without
going into negative cash flow? 

6. Build your Team

Finally, to close the loose ends, you need trusted team on the
ground. It may take a while to get the perfect team, but it is
worthwhile. A team includes a local realtor, local lender,
local property manager, insurance agent and contractors. I
always find professionals with extra designations carry a
much higher standard of care. If you focus on finding the
cheapest professional, you will fall hard on this. Take your
time to find the right professional rather than the cheapest
one. 

No matter what you want to do in real estate, it is crucial that you

speak to trusted experts along the way. To schedule a 30-minute

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real estate coaching call with me, reach out at:

www.Calendly.com/HAYLEN

Helen Chong

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