3 Simple Steps To Get Started Investing In Real Estate Today

20 Replies

3 Simple Steps To Get Started Investing In Real Estate Today

Hi guys, my name is Chris Logan and I am a real estate investor out of Tampa, FL. I get asked a lot by my friends, family and connections "How to get started in real estate investing?". My follow up answer to this is usually "where would you like to start?". I then get a very puzzled look followed by this answer…."If I knew that I wouldn't have asked you :-)". So where does a new investor get started?

There are multiple ways to get started if you have the desire, but are just lacking the know-how. So, I have put together a simple 3 step road map for you to follow to success.

1. Bird dogging- this is usually where most people start. This is where you find properties for other investors and get paid a "finder’s fee" for the property you find. You either get paid up front or will get paid once they close on the property. You can usually make anywhere from$250 - $1,000 for each property you find. This can be a great way to build a consistent income and gets you in the habit of looking for properties other investors want to buy.

2. Collect Finders Fees(only if you are finding properties for a real estate agent/investor and are able to convince them to be their assistant) -This is similar to bird dogging, but now you are marketing the property for this investor/agent and instead of finding a property, you are now finding a buyer. The reason you need to become the investor/agents assistant is because this is the only legal way to share in "commissions" from the sale of a property at closing. Collecting finder’s fees can bring in anywhere from$1,000-$2,500 depending on the deal.

3. Real Estate Wholesaling -In my personal opinion this is the absolute BEST way to start. It combines the first 2 steps, but you can make ALOT more since you are now finding the deal, marketing it, finding a buyer, then closing on the property yourself. The best part about this is that it's possible to wholesale or "flip" a property andmake anywhere from $2,000 - $15,000 without any of your own cash or credit. In this strategy you are putting a contract on a property and then turning around and selling your contract to another investor for a fee. The difference between the price you negotiate with the seller and what you end up selling your contract to the buyer for is your fee. Pretty cool huh?

In Closing...
Once you master these 3 strategies you can then move on to other strategies like rehabbing, lease options, sandwich lease options, wholesaling lease options, owner financing and much much more. HOWEVER, the most IMPORTANT thing you MUST do first is find a mentor.

How do you find a mentor?
Whether you pay for training or find someone to teach you for free in exchange for finding deals for them, having a mentor is an absolute must. This will also speed up the learning process and have you making A LOT more sooner.

thank you for this info, am a new investor interested in wholesale in san antonio currently looking for a mentor.

Any advice will be great.

This post has been removed.

@Chris Logan i thought i was the only one that was conscious of no money down deals. The majority of real estate investors do it the traditional way, nothing wrong with that. It is always heart warming to know that their is an option that doesn't require money for someone who is just starting off.

Absolutely! Why use your own cash when you can use someone elses! For the majority if my deals I never end up using a dime of my own cash. This concept is really important to understand for investors starting out.

I think the title of this post is quite misleading. This thread is labeled 3 simple steps to get started in the real estate, yet the three things listed our actual strategies. Sure, I guess they are simple in theory (but so are most things), but they actually require a lot of knowledge. Take #3 for example...wholesaling is not a simple step in real estate investing, it is a rather difficult strategy / job which requires skills in marketing, determining property value, negotiating, etc. There are thousands of threads on BP about wholesaling and it is anything but simple (just ask many of the people who have worked for months and months and have not closed a deal).

Just my .02. I think it is discouraging to new investors when people make things sound so simple, but when they try to execute they find it is much harder.

@ChrisLogan Can you explain how a "subject to" works. All i know is that the owner puts the deed under your name.

Another question, what is your method of finding a cash buyer when you do a wholesale deal ?

@James Vermillion Its only difficult and hard only if we think it is. Sure it will take some work just like anything else, but its important we stay positive, and have the right attitude. When you use words like its difficult and its not that easy your already setting up a mental barrier that will prevent new real estate investors for starting out.

The only thing about this thread that i don't like, is that chris has a capture page that will make him money if we sign up.

Originally posted by @Eli Hood :
@James Vermillion Its only difficult and hard only if we think it is. Sure it will take some work just like anything else, but its important we stay positive, and have the right attitude. When you use words like its difficult and its not that easy your already setting up a mental barrier that will prevent new real estate investors for starting out.

@Eli Hood , with all due respect, the mental barriers occur when people are not prepared for the challenges ahead. Thinking positive is great, but that alone will get you nowhere in this business. "Difficult" and "challenging" are not discouraging words, they are truthful words, and unfortunately, many people do not like to face the truth, but it is inevitable.

I have been on BP for quite a while now and have seen hundreds of people come and go, many never completing a single deal. The main reason I believe this occurs in unrealistic expectations. People think it is "easy", but it is not. When they start to discover the true work, knowledge and skills required, the mental barrier you mentioned occurs. It is important for new investors to be aware of the challenges and embrace them, but not pretend things are going to be easy.

Hmmm how long did it take you for your first deal ?

Eli,

I started seriously considering real estate investing in November 2010. I spent approximatley 1 year learning about real estate investing, meeting with lenders to determine financing options, interviewing contractors, learning accounting skills, setting up a business entity, getting licensed in real estate sales, and developing a business plan. I closed on my first property in November 2012 and have since flipped about 10 properties and hold 2 rentals.

I cannot say any of it was easy, but it has been very rewarding!

A subject to is a strategy that can be used to buy real estate without cash or credit and flip for anywhere from $5-10k+ depending on the deal. Very similar to wholesaling.

Basically how this works is you are signing an agreement to buy a property subject to your inspection on this property and the potential repairs meeting your standards.

In the time period you have the contract on this deal you are marketing it to potential buyers. If they buy it great, if the don't then you always have an "out" bc the contract you signed for purchase was subject-to your final approval of the condition of the property or your partners.

@James Vermillion I don't believe this post was misleading at all. I mentioned 3 simple steps. We can go back and fort on a step vs a strategy, but lets not forget the purpose of this post. It was to educate new investors on what strategies to look at FIRST in getting started. It is simply an outline. I never said you can make money in real estate without work.

The steps I listed above are simple steps for anyone to get started, HOWEVER I also stated the importance in investing in your own education and having a mentor.

@Eli Hood I love your energy man and I know that if you put your mind to it, pursue knowledge and training you will be successful. I hate to break it to you,but training in this business will never come free of charge, unless you find a local mentor to your area and offer to find deals for him in exchange for teaching you the business.

If someone knows how to do something that I want to learn I am willing to invest in my education to get it bc I know that the reward will far out weigh the initial investment.

Originally posted by Chris Logan:
@James Vermillion I don't believe this post was misleading at all. I mentioned 3 simple steps. We can go back and fort on a step vs a strategy, but lets not forget the purpose of this post. It was to educate new investors on what strategies to look at FIRST in getting started. It is simply an outline. I never said you can make money in real estate without work.

The steps I listed above are simple steps for anyone to get started, HOWEVER I also stated the importance in investing in your own education and having a mentor.

Chris, a couple things:

1) Sure, I suppose we could debate whether or not you listed steps, but there is no winning that debate for you. There a plenty of posts here on BP with steps, that simply was not one of them.

2) It is also hard for me to believe your purpose was to help investors when you post a link soliciting others...which is in clear violation of the BP forum rules.

3) In regards to training...it can be free of charge or very close. I have not spent a dime on real estate education outside getting my sales license (which I have made back many times over in saved commissions), and a few books (most of those I borrowed from the library anyways). Sure, there are some mentors out there that can help you, but to say training "will never come free of charge" is not true. Fortunately, we live in a time where so much information is available via free college courses, websites like BP, free books, blogs, podcats, etc...you just need to take the time to find which resources are most valuable.

It doesn't matter. I'm not in this to "win" anything. the bottom line is the knowledge that was listed to help others get started.

Originally posted by Chris Logan:
It doesn't matter. I'm not in this to "win" anything. the bottom line is the knowledge that was listed to help others get started.

I am all for helping new investors. Good luck!

James. Most would agree that time is more valuable than money. If someone can share something with you that will drastically shorten the learning curve and have you start making money sooner than later most would agree that would be worth every penny spent. I feel we are losing sight of why this was posted and will be discontinuing the rest of this debate because of this. Just sharing info that has helped me in the past.

@Chris Logan
Originally posted by Chris Logan:
A subject to is a strategy that can be used to buy real estate without cash or credit and flip for anywhere from $5-10k+ depending on the deal. Very similar to wholesaling.

Basically how this works is you are signing an agreement to buy a property subject to your inspection on this property and the potential repairs meeting your standards.

In the time period you have the contract on this deal you are marketing it to potential buyers. If they buy it great, if the don't then you always have an "out" bc the contract you signed for purchase was subject-to your final approval of the condition of the property or your partners.

If you're going to be giving investing advice on how to get started make sure you understand the strategy you are about to explain. Subject to strategy is not what you state above. That is a "contingency" or an "out clause" within your purchase agreement.

Sub2 is a strategy used to purchase property while keeping the seller's existing financing in place. There are a couple different techniques in which you transfer the ownership (Warranty deed or Land trust, many threads on BP about this strategy). Generally speaking, it is just like any other real estate transaction in that you the buyer are purchasing the property from the seller and will become responsible for making the mortgage payment after closing. Most states have a "acquiring subject to" on their state PnS agreements. If you need more assistance, title companies can be a great resource in helping make sure you have the proper documentation.

Dan. Thanks clarifying - you are correct on this. In my post I explained how a subject to clause works, not the subject to strategy you are talking about.

@Chris

I understand, however that wasn't the question that was being asked.

That's why I thanked you for clarifying. We were on the subject of wholesaling in this discussion so I assumed that's what was being discussed. Once again we are getting sidetracked on the purpose of this post, but I appreciate your contribution.

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