Starting Out

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Jaime Lewis
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New and need advice!-

Jaime Lewis
Posted Nov 21 2022, 16:49

Hi All!  I just joined BiggerPockets and am finding so much amazing info here.  The problem is... I still have no clue what I'm doing.  Haha!  I don't know if I should buy properties in bad shape, fix them up and rent them, airb&B them, flip them... Where to start?  And I know there are so many ways to finance, but I have no idea what is right for what I am trying to do.  

I have a daughter at TTU in Lubbock and started out just wanting to get a cute little place for her and my other daughter, who will also be there soon.  It's hard to find a cheap cute little house in that area that is fixed up already.  You can find some that are not fixed up, but they are selling at the same price as the one across the street that has been remodeled.  

So, of course, my mind goes right to investing.  We get an AirB&B every time we go up there... I have found some really inexpensive homes in decent areas, well under $100K, that I could put some money into and buy a few, hold one for my girls, and rent or AirB&B the others.  There is a possibility to make a little money if I flipped one, but the amount of work they need will probably not make much of a profit when you try to sell bc none of the other homes in the area are really updated. 

Another problem is that I still need at least $200K fast.  There are so many options... I have no clue which is best.  Also, I am in the Austin area, so trying to do this from afar.  I have a great realtor, but I have heard finding an honorable contractor in the area is not an easy task.  I would LOVE it if I could talk to someone who could help me realistically analyze a few of these deals and tell me if they are even worth pursuing.  I am researching and reading, but I wish I had someone to guide me and help analyze on this first purchase because I truly have no clue what I am getting into.  Haha!  Looking at keeping the homes and not looking at the short-term return, maybe they look great, but if I look at what I can make now, not so much, but I am looking to hold on to them, so do I even need to consider what the other homes are selling for now?  Or does it make more sense to look at how much they are renting for?   My brain hurts.  Sorry for the long email and vent session.  If anyone has any advice, I am all ears.  :-)

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Replied Nov 21 2022, 18:00

The headache of construction and major repairs from afar personally isn't something I would embark on.  Whoever told you that finding an honorable contractor is not an easy task gave you some sound advice.  Although there are definitely a ton of people out there who work with integrity, it'll be a little more difficult to validate that if you are miles and miles away.  If, however, you plan to be hands on and the location is feasible enough for you to really keep an eye on everything that's going on, then it may be a fun endeavor to do (depending on how much energy you have allotted for this).  

I get how overwhelming all the info is.  If you're really getting into something and trying to do it right... it's a FLOOD of information and SO easy to get overwhelmed.  I'd get in touch with seasoned investors in your local area if you can.  Their input would be invaluable because many of them have probably been in the same position that you're in now, and may be able to give you some insight that puts all this information into a better perspective.  

Best of luck in your investment(s)!!!

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Nathan Gesner
  • Real Estate Broker
  • Cody, WY
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Nathan Gesner
  • Real Estate Broker
  • Cody, WY
ModeratorReplied Nov 22 2022, 05:12
Quote from @Jaime Lewis:

Welcome to the BiggerPockets forums!

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.

  • Property Manager Wyoming (#12599)

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Jordan Moorhead
  • Real Estate Agent
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Jordan Moorhead
  • Real Estate Agent
  • Austin, TX
Replied Nov 22 2022, 08:14

Ask your Realtor for a list of trusted contractors and get lots of references!

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Dylan Speer
  • Investor
  • Denver, CO
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Dylan Speer
  • Investor
  • Denver, CO
Replied Nov 22 2022, 10:56

Hey Jamie,

I am an acquisitions analyst at a real estate investment firm. One of the roles of my job is to aid clients from square 1 to closing on their first investment property. 

We are acquiring homes in two midwestern markets. We have partnerships there with realtors, property management companies, lenders, and have an in-house asset manager that walks the client through the first 90 days of ownership to make sure they aren't missing any important tasks. 

We are buying mostly turn-key rentals for $125,000 to $200,000. 

If you'd like to hear more about why we've chosen these two markets, I'd be happy to discuss.

Thanks

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Mohammed Rahman
  • Realtor
  • New York, NY
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Mohammed Rahman
  • Realtor
  • New York, NY
Replied Nov 22 2022, 11:24

Hey @Jaime Lewis - you've already taken the first step which is putting yourself out there. 

Right now, your mind is racing at 100mph and in all directions, so I suggest putting a pause on things while you figure out the most important aspect: what your goals are. 

Without having clear goals, you're going to get pulled in different directions/costs even AFTER you've bought your first property. My recommendation is to begin with educating yourself of all the different ways to invest in RE primarily through books that BiggerPockets has. You can find them on Amazon. 

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Jaime Lewis
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Jaime Lewis
Replied Nov 22 2022, 12:06

Thank you, everyone!!!  I have a few calls with other investors in the area that I am looking to start in and will hopefully get some good, sound advice.  

The hardest part is just doing it!  I am in sales, I am a doer, and I can figure it out. I just need to get over myself and jump! Haha! 

I have a few properties that I am looking into.  I think I am going to start with 1-2 pretty inexpensive, quick flips to get additional capital to invest in more short and long-term rentals.

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Eliott Elias#2 All Forums Contributor
  • Investor
  • Austin, TX
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Eliott Elias#2 All Forums Contributor
  • Investor
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Replied Nov 22 2022, 21:46

Both my siblings go to Tech, happy to help 

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Drew Sygit#3 General Landlording & Rental Properties Contributor
  • Property Manager
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Drew Sygit#3 General Landlording & Rental Properties Contributor
  • Property Manager
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Replied Nov 23 2022, 13:20

@Jaime Lewis use the BP Deal Analyzers and post your results here for feedback.

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Erin Deann Martin
  • Rental Property Investor
  • Austin, TX
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Erin Deann Martin
  • Rental Property Investor
  • Austin, TX
Replied Nov 27 2022, 06:48

Hi Jamie, 
I know we connected on Facebook and I look forward to talking more soon.

I'd recommend you reach out to @Jordan Sutherland - he's a realtor and investor in Lubbock and has years of experience helping out-of-town investors get started in the region. He has expertise in both on and off market deals, renovations, BRRR, long term rentals, and short term rentals.

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Jaime Lewis
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Jaime Lewis
Replied Nov 27 2022, 07:02

Thank you!!  I will reach out to him tomorrow!!

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Evan Brake
  • Real Estate Agent
  • Lubbock, TX
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Evan Brake
  • Real Estate Agent
  • Lubbock, TX
Replied Nov 30 2022, 07:34

Hey Jaime,

If your realtor is local to Lubbock they should be able to provide you with some contractors numbers from the area. If not, happy to help myself!

-Evan Brake