If you had to Start from Scratch
Member since 2021 · 25 posts · 12 votes
If you had to Start from Scratch
Most Popular Reply
Jerry PuckettPro Member
Wholesaler · Fort Worth, TX · Member since 2010 · 1k+ posts · 1k+ votesHello @Chezare Bonilla
Ah...to be young again. I agree with @Joaquin Camarasa on every point. But me personally, if I had it all to do over again, I would have dived right into a househack needing a little work right after college. Particularly if single without children. What a great way to learn and prepare.
28 Replies
- Real Estate Agent · Springfield VA · Member since 2018 · 480 posts · 400 votes3y
Would it be single family rental, multifamily rental, an FHA house hack, wholesaling, or something like house flipping?
Single family or multifamily ideally (privacy and no HOA) Move in ready Househack or a Househack that needs only cosmetic touches, many will agree here. It teaches you a lot and prepares you to get into bigger and more complicated things in the future.
What would be realistic amount to have ready for an investment on a property?
Depends on your area. If you have good credit you should be able to buy with a 3% down conventional loan and in the current market its likely you can get closing costs paid by seller (depending where you are located)
Would you advise someone who's been saving for real estate investing for a year to potentially wait another year to have more money to get in the game or jump into the game right now?
If you find a property that allows you to cover the mortgage or most of it go for it. Remember that now you have a substantial power to negotiate and no one knows how it'll be a year from now.
- Real Estate Agent · Boise, ID · Member since 2016 · 1k+ posts · 888 votes3y
@Chezare Bonilla If I got to start over again I would like to find a dated single family on a larger lot that could be a house hack with a lot spit down the road. Use the house hack to bring in roommates and drop your expenses while saving big for more investments. Have the live in flip going on the dated house hack. Either build an ADU or parcel a lot off to speed up my funds for investing. Move out no sooner than 2 years and sell within 3 after to save on taxes. However I wouldn't need all of those to get started the more the better but getting going is the biggest thing don't spend a year looking softly and analyzing deals to analyze them. Take action find an agent and let them know what you are looking for and ask them how you could best learn more about them and when you should let them know you are ready to buy.
If you buy right the timing isn't important. Learn the market and what is needed and desired in your area. Think past year 1 and have a plan for how to fund the next one.
Best of luck Chezare!
- 3yJerry PuckettPro MemberWholesaler · Fort Worth, TX · Member since 2010 · 1k+ posts · 1k+ votes
Hello @Chezare Bonilla
Ah...to be young again. I agree with @Joaquin Camarasa on every point. But me personally, if I had it all to do over again, I would have dived right into a househack needing a little work right after college. Particularly if single without children. What a great way to learn and prepare.
- Investor · Lancaster, PA · Member since 2022 · 74 posts · 104 votes3y
Starting over for me would be starting earlier. Get started, it doesn't matter what path you take, just start, make mistakes, learn from them, get better, but get started and build equity.
If I would have jumped in sooner I would be light years ahead of where I am now (even if my first purchase was bad). Time is your biggest ally right now.
- Rental Property Investor · St. Louis, MO · Member since 2022 · 125 posts · 124 votes3y
Easy....house hack a duplex and save up to purchase a SFH primary residence so I could rent out both units of the duplex. That is the cheapest and quickest way to have REI.
edit: Make sure your SFH is a small 1000sf ranch with 3bed/1.5+bath. when you're ready to upsize, keep the SFH as a rental. Boom, you now have 3 sources of passive income that are covering your new mortgage on the bigger primary residence. Then get a HELOC and buy a 4th. Wish i knew all this back then.
- Real Estate Agent · Austin, TX · Member since 2020 · 1k+ posts · 941 votes3y
Quote from @Chezare Bonilla:
Hypothetically, if you were a year out of college, working a good paying W2 job and were looking to invest in real estate what would be your ideal first move? Would it be single family rental, multifamily rental, an FHA house hack, wholesaling, or something like house flipping? Also, what would be realistic amount to have ready for an investment on a property? Would you advise someone who's been saving for real estate investing for a year to potentially wait another year to have more money to get in the game or jump into the game right now?
As always, thank you for your comments
House hack a duplex and rent out the rooms on my side. Get your expenses low and you can use those savings to buy you more real estate. It's not unheard of to get 80% ROI house hacking and you can save $6,000 - $12,000 per year. This strategy can propel you forward.
- 3yDave FosterBusiness MemberQualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
@Chezare Bonilla, What's been tried and true for centuries is that you start with what you can afford. Here in the US primary home ownership is incentivized and subsidized and rewarded tax wise. So generally that will be the cheapest path to get started. We've assisted each of our children to buy a house as they got their first job (right where you're at). And they either rent rooms out or live in one side of a small multi (1-4 units) and rent the rest.
Cheapest to get started. Best financing. And when you sell some or all of the gain is tax free if you live in it long enough. Best gig ever!!!!l
The 1031 Investor5137 Reviews - Rental Property Investor · Russellville, AR · Member since 2014 · 688 posts · 509 votes3y
Small multifamily and house hack, hands down!
- Investor & Agent · Tulsa, OK · Member since 2016 · 1k+ posts · 1k+ votes3y
Yes I’d suggest as a step 1, house hack or at least lock up a good primary residence with built in equity, potential to flip, or somewhere where strong appreciation is probable.
Buying investments with zero experience of home ownership can be daunting, but I’m not saying not to do it.
From a personal financial perspective, you are not gaining any equity and are paying someone else’s mortgage for them by renting (assuming you are if I read that correctly).
You also learn a lot going through the process and can see what it’s like to acquire something worth out having to stress a major project etc. Just my 2 cents. I wish you well.
- Member since 2021 · 25 posts · 12 votes3y
Quote from @Jerry Puckett:
Hello @Chezare Bonilla
Ah...to be young again. I agree with @Joaquin Camarasa on every point. But me personally, if I had it all to do over again, I would have dived right into a househack needing a little work right after college. Particularly if single without children. What a great way to learn and prepare.
Thanks I certainly agree!
- Member since 2021 · 25 posts · 12 votes3y
Quote from @Joaquin Camarasa:
Would it be single family rental, multifamily rental, an FHA house hack, wholesaling, or something like house flipping?
Single family or multifamily ideally (privacy and no HOA) Move in ready Househack or a Househack that needs only cosmetic touches, many will agree here. It teaches you a lot and prepares you to get into bigger and more complicated things in the future.
What would be realistic amount to have ready for an investment on a property?
Depends on your area. If you have good credit you should be able to buy with a 3% down conventional loan and in the current market its likely you can get closing costs paid by seller (depending where you are located)
Would you advise someone who's been saving for real estate investing for a year to potentially wait another year to have more money to get in the game or jump into the game right now?
If you find a property that allows you to cover the mortgage or most of it go for it. Remember that now you have a substantial power to negotiate and no one knows how it'll be a year from now.
I had similar ideas as well!
- Member since 2021 · 25 posts · 12 votes3y
Quote from @Nate Sanow:
Yes I’d suggest as a step 1, house hack or at least lock up a good primary residence with built in equity, potential to flip, or somewhere where strong appreciation is probable.
Buying investments with zero experience of home ownership can be daunting, but I’m not saying not to do it.
From a personal financial perspective, you are not gaining any equity and are paying someone else’s mortgage for them by renting (assuming you are if I read that correctly).
You also learn a lot going through the process and can see what it’s like to acquire something worth out having to stress a major project etc. Just my 2 cents. I wish you well.
Thanks for the response Nate, fortunately I am able to live at home with my parents for a few years and save a large percentage of my income.
- Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes3y
Would have bit on a lot more deals, be as fearless as possible
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes3y
Quote from @Chezare Bonilla:
Start with a househack. It's cheap to get into, gives you three units as rentals and one to live in, pays for itself, gives you three renters to accelerate learning how to Landlord, reduces the risk of 100% vacancy, etc.
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 Book4.7247 Reviews - Member since 2020 · 70 posts · 49 votes3y
All real estate is local so any advice would really depend on the city you are in. I’m in a rural area and you really don’t see 2-4 unit multifamily for sale here that would be appropriate for starting out. I really like for my city single family homes that are 1300-1500 sq ft with a garage and less than 30 years old. I wished I had bought one, moved into for a year, save up a new down payment and buy and move into the next one year after year when I was starting out. Advice also depends on your goals. I would like to have 7-9 of these nicer properties while some peoples goals are to become more of a realty mogul with hundreds of doors.
- Member since 2021 · 25 posts · 12 votes3y
Quote from @Robbie Young:
All real estate is local so any advice would really depend on the city you are in. I’m in a rural area and you really don’t see 2-4 unit multifamily for sale here that would be appropriate for starting out. I really like for my city single family homes that are 1300-1500 sq ft with a garage and less than 30 years old. I wished I had bought one, moved into for a year, save up a new down payment and buy and move into the next one year after year when I was starting out. Advice also depends on your goals. I would like to have 7-9 of these nicer properties while some peoples goals are to become more of a realty mogul with hundreds of doors.
My area is definitely more urban than rural and would involve more of the multi-family approach. I like your approach with buying a house every year. I wish you luck in accomplishing your goals!
- Member since 2021 · 25 posts · 12 votes3y
Quote from @Karl B.:
This is simple. I would buy a 4-unit VIA a FHA-loan.
Live in it for a year, refinance it, and find another 4-unit to FHA.
Karl, I wanted to confirm; is it possible to do multiple FHA loans? I've heard this from someone else and have been wondering the details.
- Member since 2021 · 25 posts · 12 votes3y
Quote from @Account Closed:
Easy....house hack a duplex and save up to purchase a SFH primary residence so I could rent out both units of the duplex. That is the cheapest and quickest way to have REI.
edit: Make sure your SFH is a small 1000sf ranch with 3bed/1.5+bath. when you're ready to upsize, keep the SFH as a rental. Boom, you now have 3 sources of passive income that are covering your new mortgage on the bigger primary residence. Then get a HELOC and buy a 4th. Wish i knew all this back then.
This is excellent advice! Definitely takes patience but I like it!
- Rental Property Investor · Erie, PA · Member since 2015 · 1k+ posts · 2k+ votes3y
Quote from @Chezare Bonilla:
Quote from @Karl B.:
This is simple. I would buy a 4-unit VIA a FHA-loan.
Live in it for a year, refinance it, and find another 4-unit to FHA.
Karl, I wanted to confirm; is it possible to do multiple FHA loans? I've heard this from someone else and have been wondering the details.
NO. Which is why I stated one would need to REFINANCE (and pay off the FHA loan) prior to getting a separate FHA loan....
- 3yJared HottleBusiness MemberReal Estate Agent · Cedar falls IA Waterloo, IA · Member since 2020 · 902 posts · 549 votes
If it were me I would buy a solid househack using a conventional mortgage. Maybe in need of some updating but livable so you do not have to spend a ton of money to be able to move in. Use your connections to find some roommates and rent out all your rooms. Do this every year for the first 5 years at least.
In the meantime go to the local real estate meetups each month and connect with other people in your area on biggerpockets. Have a goal to meet up with one person each week in addition to attending the meetups each month. Talk to them, see how they did it, let them know what you are trying to do. Look for opportunities to serve them or work on the side for them.
Lastly grind it out in your W2, get overtime if you can, work on getting promoted, do the best job you can especially if it is paying well.
Do all these things for 5 years and you will be amazed where you end up!
Jared Hottle Real Estate59 Reviews - Member since 2021 · 25 posts · 12 votes3y
Quote from @Jared Hottle:
If it were me I would buy a solid househack using a conventional mortgage. Maybe in need of some updating but livable so you do not have to spend a ton of money to be able to move in. Use your connections to find some roommates and rent out all your rooms. Do this every year for the first 5 years at least.
In the meantime go to the local real estate meetups each month and connect with other people in your area on biggerpockets. Have a goal to meet up with one person each week in addition to attending the meetups each month. Talk to them, see how they did it, let them know what you are trying to do. Look for opportunities to serve them or work on the side for them.
Lastly grind it out in your W2, get overtime if you can, work on getting promoted, do the best job you can especially if it is paying well.
Do all these things for 5 years and you will be amazed where you end up!
This is definitely a great idea!
- Member since 2021 · 25 posts · 12 votes3y
Quote from @Karl B.:
Quote from @Chezare Bonilla:
Quote from @Karl B.:
This is simple. I would buy a 4-unit VIA a FHA-loan.
Live in it for a year, refinance it, and find another 4-unit to FHA.
Karl, I wanted to confirm; is it possible to do multiple FHA loans? I've heard this from someone else and have been wondering the details.
NO. Which is why I stated one would need to REFINANCE (and pay off the FHA loan) prior to getting a separate FHA loan....
Gotcha, that makes sense now. I didn't know you can get a new FHA once you refinance the house and pay off the original loan.
- Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes3y
I would save as much money as I can, live broke, and buy/hold as many properties as I possibly can
- Member since 2021 · 25 posts · 12 votes3y
Quote from @Eliott Elias:
I would save as much money as I can, live broke, and buy/hold as many properties as I possibly can
Yessir! That's the goal right now
Join the conversationCreate a free account to reply, vote on answers and follow this thread.