02 Jun How do I get started as an investor?
How do I get started as an investor?
A few times each year new investors ask the same question. “George, I want to get started as an investor but everything I hear is about asset protection and I don’t know what to do. How do I get started as an investor?
Here are the easy steps to get started. As you grow in both assets and knowledge you can always add on or change your asset protection model. The point here is to get started.
Below are the first steps you should take to answer the question, “How do I get started as a real estate investor?”
Come up with a Business Name
Search the internet and your states secretary of state business office to see if someone else has already used that name to form a corporation or LLC. Be ready to pick another. One way is to take the names of your immediate family and make up an acronym based upon those names. Game Properties could actually stand for Gene, Allen, Mark and Elmer. Remle Properties is Elmer spelled backwards. Pick a name other than your last name and get started.
Choose a Business Entity
You have four basic choices with a couple of variations available. The basic choices are Sole Proprietorship, Partnership, Corporation or LLC.
The easiest and least expensive business entity that you can set up without hiring an attorney is a Sole Proprietorship. The forms are at normally available at the circuit clerk’s office in the county courthouse. Choose the court house closest to where the business will receive mail. Go to the court house, request the forms and fill them out. Pay the clerk’s office. Publish an ad in the newspaper three weekends in a row and viola you are in business as a Sole Proprietor. Not sure if you need to wait for the ink to dry before you start presenting yourself as such
The best way to lose friends and cause family problems is a partnership between two or more individuals who do not think the same, have different ethical and moral standards or they are from your spouse’s side of the family. I recommend the only partnerships should either be between married couples or Family Limited Partnership to protect the assets for your decedents.
If you are not experienced in business consult an attorney before setting up a partnership or LLC. Ask for our quiz for attorneys to see if they understand what you are trying to accomplish.
Request a Tax ID Number
You can do this online. Go to www.IRS.gov and select form W-9. Fill it out and get your tax ID number almost immediately.
Consider owning your real estate in a Land Trust
Put the home in an Illinois Land Trust. Talk to your attorney before you do this. You need to have your banks permissions and the phrase “for Estate Planning Purposes” needs to become part of your vocabulary. For real estate located outside of Illinois consult your attorney.
Establish a mailing address other than your home. Rent a P.O. Box or PMB “personal mailbox” at UPS or similar company as close to where you live as possible. Who wants to drive 25 miles to get the mail. Mail is where the tenants send you money!
Set up a Google e-mail for the business along the lines of GameProperties@Gmail.com
Later when your business grows you can worry about a domain name and e-mail. When we made that decision it was with Go-Daddy. Their founder of Go-Daddy also served in the Marine Corps.
Free Phone Number
The reason for a g-mail account is that at the present time Google will let you have one free Google voice phone number. Set it up. get the number and forward it to your home or cell phone. What area code would you like? Use this number on your business cards. The great part about a Google Voice number is that when you get big enough to hire either an office manager, answering service or virtual assistant, you can forward those calls to them and keep your cell phone.
Check out Ring Central or companies like it that give you a virtual fax number for incoming faxes. Incoming faxes transmissions are received as a PDF attached to your e-mail. Print or delete as you see fit without wasting paper on junk faxes. Ask Illinois REIA for a referral and get a discount.
Go to FIVER.com and you can purchase a logo starting at $5 up to as much as you want to spend. Remember to rate and tip the individual who is doing the work.
Pick a Title for Yourself
Show your title as ANYTHING but owner. You can be the Property Manager, Assistant Leasing Supervisor, Applicant Liaison, Resident Support Specialist. Whatever. Be creative. NEVER tell anyone other than the bank and your attorney that you are the owner. Don’t even tell your children until they are old enough to keep their mouths shut. When the children ask what you do tell them I am the _____________ for GAME Properties. That is not a lie and it is just enough for them to comprehend at a tender age.
Purchase professionally printed business cards. You are looking for quality and uniformity here. Members of Illinois REIA receive substantial printing discounts at Office Max and Office Depot.
Put your title, logo, mailing address and Google Voice number and e-mail on your cards.
Personally I have never cared for placing a personal photo on my business card. It is a personal choice. If you are in sales it may be the best thing you can do. We strive for anonymity.
As an investor you will have two frequent needs, Legal Advice and Business Advice. You can pay $250.00 per hour for either of them. Or you can have both for a reasonable monthly fee.
For almost unlimited legal advice and much much more consider purchasing a legal service plan from LegalShield. Go to www.Skidis.Biz and check out LegalShield for your business. This is a great product all around. It will also help you if you decide to incorporate or form an LLC. We have used this countless times since hearing about it from Wendy Patton’s husband Michael Gott in 2003.
If you work from home select the standard plan with the Home Business Supplement and Trial Defense Supplement. This will cost you $39.90 a month.
For unlimited business consultation add GoSmallBiz.com This is a company owned by Fran Tarkenten and if purchased direct from GoSmallBiz.com the cost is also $39.00 a month. When bundled with a LegalShield Home Business Supplement the additional cost is less than $15.00 a month.
Here is the best advice any beginning investor needs to hear early on.
- Everything doesn’t have to be perfect to get started. Don’t let the analysis of paralysis keep you from reaching either your dreams or your potential.
- Set up a plan. Work the plan. Reevaluate the plan and tweak the plan daily, weekly, monthly and yearly. Make Changes as needed. But above all else, pursue the plan!
- If you don’t get started soon, you will never finish.
- Just like with housekeeping you need to do ten things each and every day to pursue and reach your goals.
What are your ten?
Good Luck and Good Investing
Founder and President of Illinois REIA