I'm in need of a little help in figuring out the right path to take. I've studied real estate since I was 13 (11 years ago) and I've always wanted to be a landlord. (Or have a management company that I own do it for me preferably). I'm actively licensed in Florida as an agent but I don't have my license hung with a broker. I'm going back to school to finish my bachelor's degree at the moment. As of right now, I barely have any money, my credit is teetering on a 600, and I just recently got a good job as a server at Bubba Gump Shrimp Co. at Universal City Walk in Orlando, FL. My tax return for this year though won't show much because of just getting the job, and having awful jobs before it that I barely claimed anything at.
I've listened to the first 20 BP podcasts and taken all of it in. They are right, starting out in investing is definitely NOT easy. I attended my first REIA meeting last night in Orlando and it got to me a little bit. There are investors out there that have been doing this for 1, 2, 5, 10, and even more years. When a good deal comes along, how am I supposed to compete with someone who has cash in hand and who can close without even seeing the property?
The advice that I would like to have is about my idea on where I should go with real estate. I've already spoken to my lender and he says that he can get me a loan right now with where I stand. I just need to show him a proof of income which I could show in January and buy something after that. (Probably for less than 60K because if I did my math correctly, that's about all I could afford)
My question is this...do I wait until I have more income and better credit to buy a multi-family property that I can live in 1 unit and rent out the other 3 or 4 (MF's are where I want to end up in the future), or do I buy an awful SF home in a depressed area for 15K or 20K, put a few bucks into it, and hope that I can turn a profit?
Start small, and try to make small profits until I can afford bigger and better properties...or wait until I can afford bigger and better properties from the get go? Any advice would be awesome.
If you are licensed then why haven't you hung it with a broker yet? You have no money, your credit won't get it, you love the real estate business but instead of being actively involved in real estate utilizing the license that you already have... you've decided to be a server for a very minimum wage at a restaurant.... Something is terribly wrong with this picture!
I'm sorry I had to delete some things that I was going to type so I just hope that someone in FL here on BP that's experienced as an agent, real estate investor or businessperson with a good heart and strong mind can come along get you re-aligned and focused to where you find out what you really want to do because I don't believe your goal is to be in the business of real estate. My coin.
I wouldn't say spend 15k-20k on a house means it's "god awful" since you're low on funds why don't invest in the sub 30k-60k market?
I suggest checking out more of Lisa Phillips (I think she was show 62) shows on finding great low costing houses while netting a lot of profit.
I think that buying a duplex and staying in one half while renting the other is a great idea just make sure you have the money to cover it because you say you don't get alot of hours at your job. If you need to work two-three jobs, that what I do: one at a restaurant and one at a Casino to save up enough.
I don't understand why you don't use that real estate license to get a better job though that's what I've been saving my money for.
When a good deal comes along, how am I supposed to compete with someone who has cash in hand and who can close without even seeing the property?
Don't compete, go after deals that no one else knows about.
or wait until I can afford bigger and better properties from the get go?
Do not wait, Start looking and evaluating now. Even if you can't do a deal you will be learning the market and developing your network.
Hey Mary, thank you for the advice. I actually have had my license hung with a broker for the last 2 years and been actively selling; however, I just took it down for a while while I finish my bachelors degree since I have less than a year left. As for the restaurant job, I make about 4 times what minimum wage is on a bad day. I'm making anywhere from 40K-50K a year and that's working part time.
Your 2nd paragraph is exactly what I'm looking for. I would love to have an investor/agent/business person with some money come along and take me along for a journey in which I could help them out and they could return the favor with a small percentage of profit as well as the knowledge that I need to get out and do things on my own.
Mario, excellent tip! I have definitely been scouring the MLS for properties to see what areas are selling at what price points and what the homes look like on the listing pictures as well. Here is a tip for you since you said you are trying to save to get your license...
SAVE MORE THAN YOU THINK YOU WILL NEED! I made the mistake of only saving enough to pay for my class/my finger prints/ my test/ and my national/state/local dues, MLS fees, and SupraKey. I got into real estate as an agent, fresh off the press at a nice ripe age of 22, and all of my friends immediately came to me and said what............"JEREMY! I need your help finding a house. I want to RENT close to UCF, or close to Universal, or wherever. I didn't make a dollar my first 6 months. I'm actually back in school because I went about being an agent completely backwards and I couldn't afford it anymore. That's also why I finally got the better serving job. Best of luck to you in your endeavors Mario!
You're right, thank you for the positive feedback and enthusiasm! I'm gonna try to buy my first place by this coming April.
Thanks for the tip Jeremy! I never realized the extra cost that came with being a Realtor
When we got started I thought my end goal was a large 400 unit class a apartment comdx. We get strated in single family because it made sense and fit our "limit". We got started with personals because at 0% (va loans) , it was a fixer upper and rented out amazing when we were transferred. Through constraints and availability and life "created" our business plan.
Honestly I love our agile family homes. It is no longer a huge goal to "trade them up" but just to grow them. I am a big believe in just getting started! If you wait for the perfect deal, you will lose so many other great deals. That lost "opportunity" cost probably won't make your stellar deal worth it when you look at the lost!
@Jeremy Carl First thing first,
Get a saleable listing, sell it, tell the world about it and get more because of it.
Keep doing it, until your capital grows and when the right deal comes you will know it. There is not shortage of sellers or deals!
Thank you everyone for the advice!
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