NEED A HANDHOLDER TO GET STARTED
Im new to REI and I don't know where to start I have a FHA loan on my primary home and 15k in equity in the house not much had the home since April 2017 I have a great paying W2 and they pay for my housing I have 50k saved up and a business account that does not produce anything IM LOST
Quote from @Ronshay McBridge:
Im new to REI and I don't know where to start I have a FHA loan on my primary home and 15k in equity in the house not much had the home since April 2017 I have a great paying W2 and they pay for my housing I have 50k saved up and a business account that does not produce anything IM LOST
1. Start with BiggerPockets Ultimate Beginners Guide (free). It will familiarize you with the basic terminology and benefits. Then you can read a more in-depth book like The Book On Rental Property Investing by Brandon Turner or The Unofficial Guide to Real Estate Investing by Spencer Strauss.
2. Get your finances in order. Get rid of debt, build a budget, and save. The idea that you can build wealth without putting any money into it is a recipe for disaster and the sales pitch of gurus trying to steal your money. A wise investor will not try to get rich quick with shortcuts. If you can't keep control of your personal finances, you are highly unlikely to succeed in real estate investing. Check out my personal favorite, Set For Life by Scott Trench , or The Total Money Makeover by Dave Ramsey.
3. As you read these books, watch the BiggerPockets podcasts. This will clarify and reinforce what you are reading. You can hear real-world examples of how others have built their investment portfolio and (hopefully) learn to avoid their mistakes.
4. Now you need to figure out how to find deals and pay for them. Again, the BiggerPockets store has some books for this or you can learn by watching podcasts, reading blogs, and interacting on the forum. There is a handy search bar in the upper right that makes it easy to find previous discussions, blogs, podcasts, and other resources. BiggerPockets also has a calculator you can use to analyze deals and I highly recommend you start this as soon as possible, even if you are not ready to buy. If you consistently analyze properties, it will be much easier to recognize a good deal when it shows up. Find Brandon's videos on YouTube for the "four square" method of analyzing homes and practice. It doesn't take long to learn how to spot a good deal.
5. Study the market. You can learn to do this on your own or get a rockstar REALTOR to lead the way. I highly recommend a well-qualified REALTOR that works with investors and knows how to best help you.
6. Jump in! Far too many get stuck in the "paralysis by analysis" stage, thinking they just don't know enough to get started. The truth is, you could read 100 books and still not know enough because certain things need to be learned through trial-and-error. You don't need to know everything to get started; you just need a foundation to build on and the rest will come through experience and then refining your education.
You can build a basic understanding of investing in 3-6 months. How long it takes to be financially ready is different for everyone. Once you're ready, create a goal (e.g. "I will buy at least one single-family home, duplex, triplex, or fourplex before the end of 2019") and then do it. Real estate investing is a pretty forgiving world and the average person can still make money even with some pretty big mistakes.
I'd recommend that you keep/start learning! Podcasts, Books, and Mentors you find by networking.
I'd pick up a copy of Set for Life by Scott Trench as it has a good framework for financial independence, especially for a newer investor. Real Estate is just a part of your total financial picture so don't become too focused on just real estate. You'll want to learn more ways to increase your income now and in the future, keep your expenses low, and take the difference to invest into assets, real estate/business.
It sounds like you're in a single family home. For most investors, house hacking will probably be one of the best strategies for you to get started and take action while giving you a great return because of the low % down needed to get started (FHA loans for example). Once you get to this point, make sure to run your numbers for both while living in the house hack (lowering your living expense to less than what it would be to rent in your area) and post move out where you need to be at least break even after accounting for your monthly payment + maintenance, capex, vacancy, property management.
Best of luck getting started! Here for you with any questions you have along the way!
Figure out what you want to do (flips, buy/holds/etc), and then try and find someone to be your mentor. Put yourself out there, and offer to add value. If you're looking for someone to hold your hand, as much as I don't like it, maybe a seminar or training would be worth it to you? Nothing wrong with paid mentorships if that's what you need.
Quote from @Ronshay McBridge:
Im new to REI and I don't know where to start I have a FHA loan on my primary home and 15k in equity in the house not much had the home since April 2017 I have a great paying W2 and they pay for my housing I have 50k saved up and a business account that does not produce anything IM LOST
Knowledge is key. Find a mentor who is doing what you want to do and meet with them. I like to try to set up every month a meeting with someone I think I can learn from or who could be a potential mentor. I always come full of questions and ready to learn. Many are specific to the individual that I am meeting with but there are some questions that I have taken from John Maxwells book "Good Leaders Ask Great Questions."
"You may want to use them too:
- What is the greatest lesson you have learned? By asking this question I seek their wisdom.
- What are you learning now? This question allows me to benefit from their passion.
- How has failure shaped your life? This question gives insight into their attitude.
- Who do you know whom I should know? This allows me to engage with their network.
- What have you read that I should read? This question directs my personal growth.
- What have you done that I should do? This helps me seek new experiences.
- How can I add value to you? This shows my gratitude and desire to add value to them."
These can be a great starting point for you.
Identify what market you want to invest in and why. Then start to analyze deals there. I like to use this calculator when doing my numbers https://www.calculator.net/ren.... It is easy and simple.
Quote from @Ronshay McBridge:
IM LOST
Hello @Ronshay McBridge!
Know yourself, your finances and how much risk you are comfortable with. The only way to do that is to research different strategies and how you can plug them into the market that you want to invest in. Once you start running numbers you'll get a feel for what works and what doesn't.
Hey Ronshay,
I'm an acquisitions analyst at a real estate investment advisory firm. My job is to model properties for clients in our two midwestern markets of focus. We've partnered with a realtor in these markets to represent our client's offers, and also connect the client with our tried and trusted property management companies there. We also have an asset manager who walks the client through the first 90 days of ownership.
Many of my clients say similar things about not knowing what they don't know and having a surplus of questions.
Feel free to shoot me a DM, I'm happy to help.
Thanks!
Quote from @Ronshay McBridge:
Im new to REI and I don't know where to start I have a FHA loan on my primary home and 15k in equity in the house not much had the home since April 2017 I have a great paying W2 and they pay for my housing I have 50k saved up and a business account that does not produce anything IM LOST
$50k could go far in the Midwest. Can you move ? Or fly to come visit a market? Consider anything away from the coasts… my market will welcome you, as will many others. You have a good foundation.
#2 Managing Your Property Contributor
- Property Manager
- Royal Oak, MI
- 3,648
- Votes |
- 7,047
- Posts
#2 Managing Your Property Contributor
- Property Manager
- Royal Oak, MI
We think the Midwest is a GREAT place for OOS investors to consider!
YES, we may be a little biased, but check out our blog here on BP comparing Detroit to other cities and Deep Dives on Metro Detroit cities & neighborhoods: https://www.biggerpockets.com/... (links also available @ our website)
Your biggest question shouldn't be WHERE to invest, but HOW you will invest!
Many OOS investors set themselves up for failure because they don't truly take the time to understand:
1) The Class of the NEIGHBORHOOD they are buying in - which is relative to the overall area.
2) The Class of the PROPERTY they are buying - which is relative to the overall area.
3) The Class of the TENANT POOL the Neighborhood & Property will attract - which is relative to the overall area.
4) The Class of the CONTRACTORS that will work on their Property, given the Neighborhood location - which is relative to the overall area.
5) The Class of the PROPERTY MANAGEMENT COMPANIES (PMC) that will manage their Property, given the Neighborhood location and the Tenants it will attract - which is relative to the overall area.
6) That a Class X NEIGHBORHOOD will have mostly Class X PROPERTIES, which will only attract Class X TENANTS, CONTRACTORS AND PMCs and deliver Class X RESULTS.
7) That OOS property Class rankings are often different than the Class ranking of the local market they live.
8) Class A is relatively easy to manage, can even be DIY remote managed from another state. Can usually allot 5-10% vacancy factor and same for maintenance.
9) Class B usually also okay, but needs more attention from owner and/or PMC. Vacancy and maintenance factors should be higher than for Class A as homes will be older, have more deferred maintenance and tenants will be harder on them.
10) Class C can be relatively successful with a great PMC (do NOT hire the cheapest!), but very difficult to DIY remote manage. Vacancy and maintenance factors should be higher than for Class A or B. Homes will have even more deferred maintenance and tenants will be even harder on them.
11) Class D pretty much requires an OWNER to be on location and at the property 3-4 times/week. Most quality PMCs will not manage these properties as they understand most owners won’t pay them enough for the time required and even then it’s too difficult successfully manage them.
***Only exception is if an owner has plan & funds to reposition Class D to Class C or higher.
Also, SERIOUSLY consider - do you really have the time to be a DIY landlord or should you hire a PMC?
Good luck with whatever you decide😊
