Bought a house cash. Newbie on investing.
Lehi, UT · Member since 2022 · 2 posts · 0 votes
Bought a house cash. Newbie on investing.
7 Replies
- 3yTheresa HarrisPro MemberMember since 2019 · 15k+ posts · 11k+ votes
Decide what you want to do: long term rentals, short term rentals, flips, etc. Find out how much you can borrow from the bank, what house prices are in your target area and start saving for a down payment. then run the numbers and see how they stack up as far as costs and income.
Things to watch out for-cheap homes may look good on paper, but cost you more in the end. Condos are less expensive, but condo fees add up fast. See if you can find a duplex or house with a legal suite where you can rent both units.
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes3y
Quote from @Johanna Cuellar:
We just moved to Utah from California. Looking to start investing. Would like to start investing in RE but don't know where to start. any advice?
The question is so broad that it's difficult to know how to answer. Here's some basic beginner advice. I recommend reading to get a foundation of understanding, then you can ask more specific questions so we can help you better.
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.
The DIY Landlord Book4.7248 Reviews - 3yTy AshBusiness MemberReal Estate Agent · Milwaukee, WI · Member since 2018 · 201 posts · 132 votes
Hi @Johanna Cuellar!
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.
Not sure about your situation in particular without more details but a house hack will probably be one of the best strategies for you to get started. This allows you to take action while giving you a great return because of the low % down needed to get started. 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!
- Rental Property Investor · Centreville, VA · Member since 2019 · 1k+ posts · 799 votes3y
One of the easiest ways to start investing right now is working with turnkey companies and getting started. It is a tried and tested method for investing to remain passive in your journey and build your porfolio. Feel free to reach out if you want to discuss
- 3yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
If I had to start all over again, I'd look to acquire a 2-4 unit property with an FHA low-down payment mortgage.
Getting it under market value would be a bonus.
So, would using an FHA 203k renovation loan, which would allow me to buy something unqualified for a standard mortgage, which would weed out a lot of competition and push the price lower.
Hopefully, I would increase the value of the property in 1-2 years and be able to refi out of the FHA mortgage. I'd also learn a lot about maintenance and managing tenants.
Then, with my hands-on experience, I could decide if I wanted to repeat the process or target 5+ units - which my experience would help with lenders.
Good luck with whatever you decide to do!
Logical Property Management4.9451 Reviews - 3yGarrett CrosbyPro MemberReal Estate Agent · Los Angeles, United States · Member since 2021 · 392 posts · 162 votes
Lot's of great posts here. The only thing I would add is to make sure you really find what brings you the most excitement. I don't want to speak for anyone here, but I know that personally, I get excited about my investments. They bring out my inner competitiveness. I like to win with big returns. I feel the same way when I represent my clients too. Whether they are investors or homebuyers/sellers, I love it when I can figure out systems that help them win.
It's important to really analyze these strategies - but not too much. Getting started is way more important. My suggestion is to read over the different strategies that exist and then pick the lane that excites you the most. Then, go ALL IN. Read, listen, connect with mentors, learn from mistakes (you will make them) and enjoy the process!
Also, make sure to setup routines. Like anything new, there will be a "honeymoon" period that will come to an end. Suddenly it won't be as easy to look up deals, follow up with contractors, submit paperwork, etc. Building strong routines that you stick to will change the game and strengthen you when you hit rough seasons. :)
- Lehi, UT · Member since 2022 · 2 posts · 0 votes3y
Thank you all for your advices! Glad for this community. I will do my part and sure will reach out some of you that had offered your services.
Join the conversationCreate a free account to reply, vote on answers and follow this thread.