Three tips to getting started in real estate investing

Hey BP,

It’s been about two months since I sold my very first deal! To make a long story short, I have wanted to buy a rental in the central NJ market since finding BP, but instead I bought a foreclosure with the intention of a live-in flip after a few discussions with a now ex-girlfriend.

Well, shortly after closing on the property my relationship was no more... and I had a hurricane Sandy damaged property on my hands to deal with. Fortunately, I had done my research and felt very comfortable with what I had gotten myself into. Although there were many mistakes and frustration along the way, I ended up with more than double my original anticipated profit (my estimate was 30K). I wouldn’t have done this without a game plan, extensive learning, or without help and valuable insight from some key people I met on the site.

If you are new to this site or have yet to do a deal, I want to offer up 3 simple tips to get started toward that first one:

1) Commit to one

Commit to doing your first investment. I am a new investor and frequently meet new (almost) investors that want to break ground on their first deal. However, some spend more time going over their 5, 10, or 20 year plans – which I think is great and essential to your long term goal, but it all starts with one!

If you have yet to buy a property, focus on your first deal, not the apartment complex you want to buy one day.

2) Learn as much as you can! …. But don’t doubt yourself.

I found myself learning everyday for over a year but hesitating to make the big first step (analysis paralysis). When I finally found a property and committed to it being "the one," i went for it! For my flip I took J Scott's book, “The Book on Estimating Rehab Costs” into the actual property with me, and used it to guide the scope of work and estimate pricing after writing down everything that needed work. Although this was a bit time consuming, it was a vital step that I would highly recommend to anyone getting into their first. Without the confidence of physically seeing the property and doing the calculations myself, I wouldn’t have pulled the trigger. I used additional sources to compare the rehab costs as well, and came within 5% of the number I estimated for the rehab upon completion.

Learn all you can about the direction you wish to pursue, but once you feel confident and you’ve had others verify your first deal, make a move!

3) Leverage the experts

Without some of the people I’ve come into contact with on BP, I still think I would be on the sidelines. If you are serious, use whatever value you can bring to an investor (which might mean lugging tiles around, doing paperwork, etc.), and learn what you can from someone who has been in the field. Figure out what the person you hope to understudy needs or wants, and help them attain that. For me, this was Darren Sager, who has been paramount in helping me as both a realtor and investor. Although I believe almost anything you would want to know about real estate can be found on BP, having a local expert will help you tremendously. Go to the local BP meet-ups, listen to the Podcasts, and attend your local REI association meetings. They will give you insight and answer questions you didn’t know you had.

Best of luck to all of you in your investing!