Where to start? Wholeselling? Flipping? Rentals?

Question

After listening to the BiggerPockets podcast, there seems like a million ways to make money in real estate! For the seasoned people, if you could go back and start from scratch, what do you think is the best way to get started? Long term rentals? Fix and flips? Wholeselling? I know I want to do a combination in the future, but am overwhelmed with the different paths right now. Any help is much appreciated!

Jay Thomas · Answer

Hi Joseph!

1st, welcome to the world of investing, brother!

You are so right! There are so many options for you to choose from. Personally, I would recommending House Hacking. This way you can learn a lot that will be needed for the other strategies. House hacking is where you will buy a property and live on site and rent out rooms or if it is a multiplex, rent out the other properties. You will be able to learn the necessary skills for long term rentals and being a landlord as well  as maybe even short term rentals like Air BNB's.  You will learn the skills of getting your property fixed and renovated if needed to keep up with the market. If you do not want to go into house hacking, I would recommend fix and flips at the moment because the market is crazy and sometimes, you cannot ensure that the property will sell for profit in the later years. I would start easy. Find a townhome or smaller house to work on. Set up pinterests that can help you get an idea of what you want. create a relationship with a few contractors to have by your side for advice and work. Use a realtor to help you calculate After Repair Value (ARV) and possible profit for the future.

Good luck!!!!

Mark Cruse · Answer

Welcome to the forum. I think it all depends on your personality and what you personally feel more comfortable doing.  They are oh so different. Wholesaling you can start off with little to no money but you must be on the ground, grinding, making multiple contacts and dealing with hundreds of people. Tons of moving around and negotiating. That is not my style and I never had any interest. If you love talking to people and running around extensively it may be for you. Flipping is very complicated but rewarding. I love the construction and big business aspect of it. I love the project management and budgeting aspects. I like moving big money.  Those are things Iḿ good at and interested in so it works. Land lording works for me as well. I like many characteristics of it but not to the same degree of crazy love I have for construction.  Providing housing for families is cool. Owning appreciating asset classes is cool. An asset that generates revenue while you are sleeping is cool. I´d say examine each one and evaluate which would be the most satisfying. That is what makes success in my business model. Many fail at investing because they feel its either a get rich quick MLM kind of gig or they just jump into something they feel will make them tons of money. They dont care or really give a damn about what they are doing and only thirst for dollar signs. Recipe for disaster. Either way, there is plenty of knowledge here so continue to ask questions and make the right moves. Congratz!

Tim Johnson · Answer

Hey Joseph, welcome to the forums. It's easy to be overwhelmed at first. There's really no right answer to your question.... but from conversations I've had....and reading on BP forums, I bet that over 75% of REI folks start by purchasing another home as their primary.....and renting out their present home. You learn tons of things all at once.... home purchase, lending, insurance, landlording (or possibly working with prop management), etc. Frosting on the cake would be house-hacking as you make this move, but lots of folks are not in a position to do that. Anyway, just getting started is a kind of success already. Good luck.

Chris D. · Answer

Hi @Joseph Wayne Schretzenmaier:

I too am new to the world of REI. Others have suggested house hacking or moving. I am not in a position to do either.  That said, I've been looking for a partner for my first deal or two. Ideally, the property would be for a small multi-family with 3-4 units. Obviously, they would get a more significant portion of any sort of upside, but I'll be getting the education. Then once I feel comfortable and now that I have a couple of deals under my belt, getting the next deal should be much easier.

Hope this is helpful,

Chris

Zierry Eme Carl T. Tagbas · Answer

Welcome to BP, Joseph!

There's definitely a lot of ways you can do with real estate investing. However, I would advice to have a solid goal and plan. If you are super new with it, I suggest to do house hacking. You will be able to explore real estate with it - becoming a landlord and know the ins and outs or learn to do some renovations while living in the property.

Have you thought about connecting with other investors around your area? When I started to be more curious for real estate, I make sure that I am surrounded with mind a like people and learn from them too!

Good luck out there and please feel free to connect with me if you have any questions!

Lileth Nelson · Answer

Hi Jay,

Thanks for your kind reply to Joseph!  I myself, well I'm still looking for my first house.  What if you already own a house

what would be your next best suggestion; I'm looking on wholesaling. Thanks much have a bless day.

Scott Johnson · Answer

I started out with the wholesaling grind, @Joseph Wayne Schretzenmaier, and wouldn't change a thing. It's frustrating, annoying, and the margins are decent (not spectacular) but you'll gain a fundamental understanding of real estate investing and what's important.

You'll also learn a ton by talking with sellers and buyers. I ended up getting my license not too long ago because I can offer cash offers and listing potential.

Your journey is your own and your path be revealed as you take action toward your goals!

Eliott Elias · Answer

How much money do you have? And how much time do you have? Wholesaling is good for someone who wants to build up capital and has a lot of time. I would start there and learn how investors think

Troy Green · Answer

Hello Joseph,

There really is no right or wrong answer here. I have found that along your real estate journey you will learn which of these you enjoy the most. House hacking can be a great way to get your feet wet especially if you don't have access to a lot of capitol. From there you can scale up your business and learn the ins and outs of managing a rental property. Fix and flips and whole selling can be a great way to make money as well which may not be a bad option given the recent increase in interest rates. All of these options are great and I'm sure as you dive deeper into real estate you will find which of these you enjoy the most.

I hope this helps and good luck!

Where to start? Wholeselling? Flipping? Rentals?

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