As the stock market continues to have its ups and downs, more and more investors are running scared. Often they turn to real estate investing, the "safe" bet for their money. Not so fast!

Sadly, most real estate investors have received little information or bad advice. They dive in and work really hard, only to lose their big investment. "Real estate investing is not a one-size-fits-all proposition,” explains Vena Jones-Cox, also known as the "Reliable Real Estate Expert" (www.REGoddess.com). “So it's wise to lay a good foundation before laying down your cash." Over the years, Jones-Cox has compiled this series of steps that every real estate investor should follow:

1. Join a Real Estate Investment Association
There is no book you can read, no course you can attend, no experience you can get on your own that can come close to the education you get by hanging around with people who are already buying, managing and selling properties. The successes and failures of real-life investors teach you more – and motivate you more – than even the most complete classroom education available.

2. Decide What You Want
No, that doesn't mean "I want to buy properties." Buying properties is just a way to achieve your real goals: increased cash flow, retirement income, quick cash, tax advantages and so on. Setting goals for your real estate business right at the beginning lets you focus on the properties, areas, sellers and exit strategies that meet those goals.

3. Decide Which Strategies Will Get You There the Most Efficiently
There are only five basic exit strategies to choose from: wholesale, retail, lease/option, sell with owner financing and rent. Once you've decided what you want (see step 2), your choice of exit strategies will suddenly be very limited.

For instance, if passive income or wealth building is your goal, the wholesale and retail strategies are wrong for you. If you need quick cash to pay off consumer debt or build capital for long-term holds, renting properties is the wrong way to achieve this goal. Your strategies will be further limited by your education, personality and assets. By the time you take a close look at your goals, assets and liabilities, you should be able to find a single strategy for buying and making money from properties.

4. Discover and Acquire the Skills and Knowledge You Need to Make Your Strategy Work
Any basic text on a particular strategy will show you the skill set you need to make money with that strategy. You don't need to know how to manage properties or how tenant-landlord law works if you plan to wholesale or retail, but if your strategy is to rent or lease/option, these are important to know.

On the other hand, some skills are crucial no matter which strategy you use: the ability to find the value of properties, to find motivated sellers of properties, to talk to and negotiate with sellers and to put your offer together.

Make a list of the things you'll need to know to make your strategy work. Then figure out how you're going to get the information. There are endless workshops, home-study courses, videotapes and books about practically any real-estate-related topic you can imagine. Finding the information will be no problem, once you know what information you need.

5. Make Lots of Offers, Even Before You’re Sure You Know What the Heck You’re Doing
Jones-Cox has taught a lot of classes to a lot of new investors, and she's found something interesting: Those who haven't actually practiced looking at properties, evaluating them and making real offers have extremely unrealistic ideas about what's going to happen when they do.

Beginners have preconceived notions about the objections sellers will pose to their offers that bear no relationship to the objections they actually end up raising. They have fears about being unable to find or evaluate comparable properties. They think they'll be mysteriously blind to the repairs the properties need, when in fact they are pretty obvious.

In short, until you've actually gotten into the real estate market, you simply don't know what you don't know. You cannot make money in real estate without making offers, and you will never develop the knowledge you need to become a successful investor until you get the real-life experience of making offers.

The more quickly you take the steps above – even if you're not sure you know what you're doing – the more quickly you'll move from a wannabe to a real-life investor!

Want to see more?

• A Beautiful Home – For Less
• The Basics About Budgeting: It Doesn’t Have to Hurt
• Credit Ratings 101
• Talk about it!