BiggerPockets

This question is geared towards experienced RE investors:

Based on all the knowledge you have acquired up to this point, what would be your strategy for getting started in the real estate investment business with no experience and little to no money?

And getting a little more specific, is there one area of RE that you would focus on in particular as a beginner?

Look into becoming a wholesaler. Wholesaling is one of the easiest ways to get involved with little to no money and you won't even need credit. Wholesalers basically do 2 things;
1. They find deals
2. They find other investors looking for deals
The process of wholesaling is simply managing the transaction of moving good deals to investors looking for good deals and you get paid in the middle.

I would also recommend you focus on wholesaling REOs to get started. Some feel banks are difficult to work with but that hasn't been our experience at all. We've wholesaled over 100 deals in the last 18 months and the process is smooth once you understand the flow.

Good luck out there. Now is a great time to make things happen. Let me know if you have any questions on the wholesaling process. I'd be happy to help.
Mike

Hi Shaun,

I thought I was clear, but maybe I was not...I'm asking for advice because I'm currently saving up and looking to invest in 8 to 12 months.

In the meantime I'm looking for constructive advice. If you have any to offer, by all means I would love to hear what you have to say.

I don't see anything in this thread where you say you are working to save up money. Perhaps you said that in another thread.

What is it you want to do? To me, "real estate investing" means buy and hold. Others define it more broadly and include real estate businesses like wholesaling, brokering, developing or fix and flipping.

Are you looking to build long term wealth? Current income to live off of? Trying to become a developer?

Educate yourself. When I got into investing I am pretty sure I read 1000 hours worth of material on the internet before I bought my first house.

Before you invest make sure you have an interest in it. I knew for a fact I had an interest in rehab flipping. I knew for a fact I had no interest in being a land lord. Which path do you think I took?

Once you figure out exactly what you wanna do educate yourself some more in depth on that topic. This will help you down the road.

Maybe you know someone a little older than you who has an interest in investing as well. You would be surprised to find out how many people want to invest but just don't know how. So they go through their whole life and never get started. Find someone like that who is probably older than you but maybe has more money than you. If they trust you they might partner on a deal with you. Especially if you show them you are motivated and back that motivation up with knowledge.

Keep living frugal and saving money. Having a bank roll is so helpful. I moved back in to my parents house for like 4 months when I got started. It sucked. I sold a very rare car to raise cash when I got started. It sucked but I considered it a good option.

Just like now I am trying to get into apartment complexes. Guess what I am doing? I am selling my personal house so I can free up capitol. I don't want to do this but it just seems like the smart move right now.

Have this mindset: If you want to get into investing as much as you want to breathe air I would say you will succeed.

Goodluck

Sage, as yourself, I also work in the Film /TV business which is still my day job (Although recently we started losing more and more shows to...New York among other places)
I started about three years ago in the rental business, although I've been renting out two guest units in my own house for almost 20 years. I own two kinds of investments. Short term cash flow and long term cash flow/ appreciation. Unlike Michael P, who apparently can read a lot, I'm an A.D.D. Basket case. I cannot real long boring books. (I can barely read long boring script which I need for my job...) When I started I used a friend for advice. A guy who have been in the business (Both Film and REI) and owns more then 12 rental SFR properties.
Form me SFR seems to be the most natural way for a newbie REI to start.
Here is what I suggest:
Evaluate your abilities - The financial one as well as your personal ones.
How much money do you have or plan to have? Are you credit worthy? If not, can you buy cash? (There are places where you can buy real estate for pennies...) What geographical area or areas are you familiar with?
Do you have any skills?
Are you handy?
The answers to those questions can bring you to the solution. Don't blow your brain with information you will rarely use if ever. Concentrate on what you need to know and treat the other wealth of information as a reference book. Only open when is needed.

Eddie, good to see another film/tv guy on BP!

A couple of questions:

-You mentioned you own short term cash flow. Does that mean you purchase SFR's and take the cash flow for a couple of years while the local market is good and then sell when the area slows and move on? If not what's the strategy there?

-When you say "there are places where you can buy cash" what are you referring to? Are you talking about foreclosures and other properties that lenders are trying to sell off for extremely low prices?

-One thing that worries me with SFR's is tenant vacancy. What do you do when your tenant bounces from your first property and you're losing $XXXX every month? I would think a duplex or triplex would be safer in terms of cutting your losses, but maybe I'm oversimplifying?

What are you doing in film btw? I was an assistant in NY for a PBS producer and indy film exec producer. Thanks for the good advice Eddie!

I agree with you 100% on that, I just wanted to show pro's of the multi units. I also started with single family homes for just that reason. I wasn't sure if being a landlord was something I wanted to do and if it all went bad, I could get out from under it all quite quickly. My first 3 or 4 rentals were single family homes. But once you get used to the cash flow from a properly bought multi unit building, I dare say you won't go back.

steve

SFR vs. Multi - there are many investors that swear by and stick to both categories. The general arguments for SFR's that I'm familiar with are -

-better appreciation when things are actually appreciating
-they are the bread and butter of the RE market, so easier to move them if you want to free up some capital
-different quality of tenant that will tend to think of the property more as their home than a temporary residence - if the tenants have kids and pets and accumulate all the junk that one tends to when one has the space to spare, less likely to just pick up and move on a whim
-exponentially more SFR's than larger multis, hence many more motivated sellers who will be open to investor-level offers
-possible to convert tenants into lease option buyers if you want to use that as an exit strategy

Yes, one tenant leaving a SFR = 100% vacancy, but one really bad tenant in a multi can also result in several tenants leaving - which won't happen in a SFR.

There are convincing arguments in every camp.