Just starting out

6 Replies

In the last few month's I have been trying to get started in real estate. My dad get me interested in investing about three years ago, he took me to a boot camp down in ga. It got me really interested and got I all pumped up and ready to go then, my father passed away that fall. Now with me trying to figure out how to start this business alone does anyone know where i can find a private lender or a partner that knows a little bit more then me to help me out with the money part i have close to $20,000 of material of my dad's real estate that he had got in the last 4 years and i have no clue where to start. Do i need to get a LLC first or do i need get a lawyer first i just don't know where to start.

Nicholas,

The first thing you need to do is study; learn the business; learn your market; and join your local REIA. If your father had courses or books on real estate investing, start reading them. Make friends with the SUCCESSFUL investors at your local REIA. Get out of the house and start looking at properties for sale in your area (to learn the values). Of course, you should start reading all the posts on this site. There is a lot of good info here. That should get you started!

Good Luck,

Mike

Nicholas,

1. You start where you are. That means your starting point reflects your knowledge, skills, cash, credit, etc. It is what it is.

2. Start reading. Set up a timeline where you will read a certain amount each day or each week. No real focus at the start. Just start reading. Make notes. Keep track of what interests you and follow up on each topic that does interest you.

3. Most books or courses will have some sort of outline for what to do. If you study a few you will see they are largely similar.

4. As Mike said, check out a local REIA meeting. Consider traveling to a few that are a bit further away so that you get a better sense of what is possible. The local REIA meeting is sometimes a bit dull or lacking in focus. Just network, talk to people, trade business cards and listen. Avoid buying much as you already have more than enough from your father.

5. Set small goals to start so you can see progress. Attend a meeting, read X amount over Y weeks, pull your credit report and fix the mistakes (most credit reports have mistakes), save Z more each month or pay down a bill. All are part of the process and making real progress early on helps build momentum.

6. Practice taking to seller. Call it practice as the first few conversations do not really matter. There will always be more deals out there so just call some ads. Call FSBOs and call agents. Go look at some properties. Expect the agents will qualify you to see if you are serious, if you can afford to buy, etc. Speak with a mortgage broker in your area to see what programs exist, what you can afford and what you should be concerned about.

The learning curve is step plus it is long. You do not need to be an expert to do a deal. Not all deals are great deals. You want to minimize the mistakes when starting but I would not be concerned about doing the best deal of your life at this stage. As you learn more you will do better deals. You can not really learn how without doing deals so practice does help. Be conservative when starting as what you do not know you do not know will hurt you. Post deals you are considering here and a number of folks will tell you what is wrong, what is right, what other questions you need to get answered and what you might be able to offer.

John Corey

John

I agree with 99.99% with what you said but when i went to that boot camp about year ago, it seemed that most of the people that made it really big they didn't use their own credit and refused to become personally responsible for the deals. One of biggest reason they say that if the main person dies or becomes unable to run the business then the spouse becomes responsible for the debt, to me that don't sound like a good idea. But is that just nature of the beast ?

Nicolas

nicolas,

There is a BIG difference between reality and what you will hear at a bootcamp. Bootcamps are designed to make money for the guru. Gurus know that their target audience is people who have little money and bad credit. So, to hype the idea that you don't need your own money or credit maximizes their sales.

In the real world, the number of deals that can be done creatively (no money down and no credit needed) are very low. It is extremely difficult to be successful running a real estate investing business if that is the only type of deal you can do. Although not as flashy, in the real world, the typical successful investor has excellent credit and can borrow money from the bank. No banker in his right mind is going to loan money to someone who is not going to have his own assets at risk (at least until the investor has run a successful company for quite a while and the company has its own credit history).

I know many successful real estate business people and I don't know a single one who refuses to become personally responsible.

Mike

If you don't take a risk then you might miss something really motivating LOSING YOUR OWN MONEY.

I agree with the above statements. I would look at wholesaling to start out with. Rentals are good but you need to take care of todays debt. nothing like owning a property and the furnace goes out and you don't have any money so you put it on a credit card with 18% interest and are now in a negative cash flow for a few months if not years. Something to consider is to live in a house when your rehabbing it. Live there 2 years and I think it's tax free. I know a few people that have done that and now have no mortgage after 8 years.