- The Washington Times - Thursday, December 30, 2004

You’ve been talking about doing it for two years, and today is a perfect time to put your plan into motion. New Year’s Day is tomorrow, so do not delay on your real estate investment plan for 2005.

Keep in mind that though you might not be ready to purchase a real estate investment in 2005, you can at least take steps with all the things you need to do to get ready to invest.

The steps are pretty simple: keeping up with your credit scores, reducing your spending, increasing your saving, building a team, determining your investment of choice, then getting out there and doing it.

Here are the steps in detail:

• Check your credit report at least once a year, preferably twice. Consistently checking your report is an active, rather than passive, activity. Checking it actively prevents identity theft from wreaking havoc on your ability to buy or invest in anything. It alerts you to bad information being pumped into it by credit-reporting agencies and prepares you for a healthy credit picture in the future.

The three major credit-reporting agencies’ Web sites are www.equifax.com, www.experian.com and www.transunion.com.

• Get your financial house in order by spending less than earnings, creating a spending plan — instead of a budget — paying off debt and beginning to save for a down payment.

These steps adhere to what I call the G.O.O.D. principle — Get Out of Debt. The only way to get out of debt is by creating a spending plan that pushes you to this goal.

Deny yourself, provide for your needs and some wants, and use the rest to pay off debt or create a supersize savings account.

Here are some resources: Yahoo’s Finance Expense Manager: https://finance.yahoo.com/v4; Dave Ramsey’s Beat Debt … Build Wealth: www.daveramsey.com; Providian’s Budget Calculator: www.providian.com/cmc/create_bdgt.htm.

• Create a real estate investing team. This starts with a mortgage professional, which could be where you bank or the company that financed your house; a good Realtor who understands the needs of investors; a settlement company; a home inspector; an attorney; an appraiser; an insurance company; a fix-it crew; and a property-management company if you’re not going to manage the properties yourself.

This also may include getting your own real estate license and affiliating with a real estate company so you can maximize any commission dollars as part of your down-payment strategy.

• Meet with these people. Instead of reading yet one more article, buying one more book, searching out one more investor Web site, actually get out there and talk with the mortgage guy or gal to know exactly what will be required when it comes to investing.

Meet with the Realtor to start seeking out that first property. Attend a foreclosure sale. Talk with a contractor about what it would cost to replace a roof, fix a bathroom and replace a furnace to understand the upfront expenses of fixing up and maintaining a property.

• Research the various real estate investing options and determine which one to pursue. Avoid paralysis by analysis. The options available include: property for flipping; property for renting; residential rentals; commercial rentals; paper products (discounted notes, tax liens, second trusts, etc.); land to rent out for agriculture, harvest timber, use of natural resources, renting for commercial advertising billboards or other uses, or hold and sell for profits; and real estate investment trusts (REITs) that are sold on the stock market.

Whatever you do — don’t do nothing.

Also remember, as you invest in real estate, invest in yourself, too.

M. Anthony Carr is the author of “Real Estate Investing Made Simple.” Post questions at his Web log (https://[email protected]).

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