How do I get started

Question

I am a 17 years old and I am trying to learn more about how I can get started with Real Estate investing. My cousin has bought a duplex so he has a little experience in it and he is willing to partner up for a buy and flip. What advice do you all have for me, like is this the right way to start, and what other ways could I get going with a limited budget?

David Ramirez · Answer

My advice would be to always stick with your numbers and not try to manipulate them to make the deal work. Your numbers probably won't work for most properties, so don't feel pressured. It shouldn't be easy to find a good deal. Make offers every day!

Account Closed · Answer

Continue doing research via bigger pockets, podcasts, books, etc. At 17 you've got plenty of time to learn and a nice head start on most!

Ty Ash · Answer

Hi @Carver Woosley,

I'd recommend that you keep/start learning! This can be done through 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. Being on a limited budget just means that there may be sacrifices that you need to make in order to start saving for a larger down payment to start investing (3.5% down for FHA). 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.

As already mentioned above, a house hack will probably be one of the best strategies for you to get started and 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.

Here's a great resource right here on BP:

https://www.biggerpockets.com/real-estate-investing/house-hacking-strategy

Best of luck getting started! Here for you with any questions you have along the way!

Nathan Gesner · Answer

You need to learn more before jumping in. For example, buying a fix-and-flip requires you to find something well below market rate, then you need to accurately estimate what it will cost to renovate and how long it will take, then you need to understand where the market is headed so you can estimate what it will sell for and how long that will take. Plus 17 other steps I skipped over. We just hit a peak market. Prices are more likely to drop over the next year, which means your after-repair-value (ARV) may not be as high as you think. This is not a good time to start trying flips.

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. NETWORK!!! Get out of your comfort zone. Stop hanging out with your deadbeat buddies that spend all day drinking, talking sports, and otherwise wasting away. Go to BUILD YOUR TEAM at the top of the screen and look for local investors or meetups in your area. You can also find real estate investing groups through meetup.com, facebook, or a Google search. Birds of a feather flock together!

5. 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.6. 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.

7. 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.

Michelle Bateman · Answer

Get connected with local real estate investors in your area! Usually the path of least resistance is to house hack a property, live for "free" and save up enough money to press full steam ahead!

Randall Alan · Answer

@Carver Woosley

Welcome,

Couple of suggestions… one is to check out this ultimate beginner’s guide on bigger pockets:https://www.biggerpockets.com/...

After that, try checking out the search feature on the menu tab… if you put “getting started” in you will find literally hundreds of replies to your question that previous beginners asked.  We are always happy to answer your questions as well… but it is such a frequent question I bet you will find st least an hour or two worth of reading from previous answers!  You can even  fine tune your question… like how do I start flipping houses”, etc.  I think there are somewhere between 2-3 MILLION forum posts at your disposal!

All the best!

Randy

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