How to invest in real estate

Question

If I were to already have a single family home , what would be the best way to start off investing ?

I know I have been suggested house hacking the single family home but I would appreciate different ideas/advice on how else it would be possible to begin .

Nathan Gesner · Answer

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.

Paul De Luca · Answer

@Isabel Andrade

I agree with @Conner Olsen. Renting your home and then house hacking a 2-4 unit property would be a good way to get started. Or you could buy a fixer upper single family home, move into it, rent out your other house, live in the new house for a year, rinse and repeat.

Conner Olsen · Answer

Rent out your current home and buy another one.

Conner Olsen · Answer

I own a vacation home so I'm somewhat familiar with it, don't know all the ins and outs like a lender would. Why do you want a vacation home?

Eliott Elias · Answer

Start renting asap and make income from your home. Paying your own mortgage does you no good, have tenants do it

Isabel Andrade · Answer

@conner

@Conner Olsen

That was a thought we had ! We are just going through all of the different routes to start off . Would you happen to know how vacation homes work ?

Isabel Andrade · Answer

@Nate Sanow

Thank you so much for this piece of advice . Aside from the part of failing , I think money is one of the biggest barriers seen by someone just starting off . My husband and I are really trying to obtain as much knowledge as we can before diving in .

Nate Sanow · Answer

The real trick of the journey is not to worry about how much money you have, but how much money is available for deals.  Become a deal finder.  It doesn’t matter if you have $1 in equity or $1M, at some point you need a good deal to get a good yield.  After you get a good deal, the money for the deal will find you…lenders will lend on the deal, partners will want in on a good deal.

How to invest in real estate

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