Advice on where/how to start in Real Estate Investing - Step 1
New to Real Estate · Member since 2022 · 7 posts · 4 votes
Advice on where/how to start in Real Estate Investing - Step 1
Most Popular Reply
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
3yQuote from @Kaylyn Schroka:
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.
The DIY Landlord Book4.7243 Reviews
8 Replies
- Rental Property Investor · Fargo, ND · Member since 2017 · 129 posts · 107 votes3y
Welcome, Kaylyn. You came to the right spot... BiggerPockets is one of the best resources to accomplish what you are looking for.
Listen to their podcasts, watch their YouTube videos, attend their webinars, read their books... there is a plethora of information to take in!
The first thing I would look to do if I was you is learn how to analyze potential investment properties... learn how to find your cash flow, cash on cash return, NOI, cap rate, etc... and then start running the numbers on properties in your market. Make this a daily ritual for yourself, try to get to 100 properties analyzed... you will then have a decent understanding of the deals in your market!
Unless you are hoping to represent buyers/sellers as a real estate agent, I would not spend the time and money getting your real estate license.
Remember, this game is a marathon, not a sprint. Consistency > Intensity.
- 3yMichael SmytheBusiness MemberReal Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
Start attending local investor meetings to accelerate your learning.
REIAofOakland in one, so is MREI.
There are also a lot of Meetups.
Logical Property Management4.9464 Reviews - Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes3y
Quote from @Kaylyn Schroka:
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.
The DIY Landlord Book4.7243 Reviews - 3yJared HottleBusiness MemberReal Estate Agent · Cedar falls IA Waterloo, IA · Member since 2020 · 902 posts · 549 votes
Getting started with real estate investments, particularly in single-family and multi-family rental homes, can be an exciting venture. Here are some recommendations and steps to consider:
- Educate Yourself: Begin by learning about real estate investing. There are various resources available, including books, online courses, podcasts, and websites that can provide valuable insights. Some recommended books are "The Book on Rental Property Investing" by Brandon Turner and "The Millionaire Real Estate Investor" by Gary Keller.
- Set Investment Goals: Determine your financial goals and objectives for investing in real estate. Consider factors like your desired level of involvement, the amount of capital you can invest, and your long-term strategy.
- Research Local Market: Focus on understanding the real estate market in Michigan, particularly the areas you are interested in investing. Analyze rental demand, property prices, vacancy rates, and potential rental income. Websites like Zillow and Redfin can provide helpful data.
- Networking: Connect with experienced real estate investors, attend local real estate investment groups or networking events, and join online communities. Engaging with seasoned investors can offer valuable advice and insights into the local market.
- Financing Options: Explore financing options for real estate investments. Speak with lenders to understand mortgage rates, loan requirements, and investment property financing options. Additionally, consider working on improving your credit score to increase your borrowing power.
- Start Small: As a beginner, it's often recommended to start with a single-family home or a small multi-family property (such as a duplex or triplex) to gain experience. Starting small allows you to manage the property more easily and learn the basics of property management.
- Real Estate License: Obtaining a real estate license is not mandatory for real estate investing, but it can provide valuable knowledge and resources. It may also offer access to the Multiple Listing Service (MLS) for finding potential investment properties.
- Team Building: Assemble a team of professionals, including a real estate agent, attorney, accountant, and property manager. A real estate agent specializing in investment properties can help you identify suitable opportunities.
- Analyze Deals: Develop skills in analyzing potential investment properties. Learn about key metrics like cap rate, cash flow, return on investment (ROI), and the 1% rule (monthly rent should be at least 1% of the property price).
- Take Action: Once you feel confident and have thoroughly researched the market, start searching for properties that meet your criteria. Analyze potential deals, conduct inspections, and make offers.
Remember that real estate investing requires time, effort, and ongoing learning. Be prepared to face challenges and continually educate yourself to make informed decisions. It's also crucial to conduct thorough due diligence and seek professional advice when necessary.
Jared Hottle Real Estate59 Reviews - Member since 2023 · 303 posts · 324 votes3yHey Kaylyn- getting started can be intimidating but the reward is worth the risk.
Quote from @Kaylyn Schroka:
What recommendations does anyone have on where to start/learn about real estate investments, specifically in single-family and multi-family rental homes?
I live in Michigan, and don't have any experience in real estate outside of currently renting a home for myself. Not sure if I should take classes, get a Real Estate License, get a realtor, etc. Would love to hear experiences or advice anyone may have.
Obviously, real estate investments require capital, and it's crucial to have a budget in place. Also, have an emergency fund for unexpected expenses that may arise during property ownership. Also, as a beginner, it's often best to start with a modest investment. Consider purchasing a single-family home, a duplex, or a small multi-unit property to gain experience before taking on larger and more complex dals.
A key aspect in getting involved in your market is to real estate investment clubs, attend networking events, and connect with experienced investors. Learning from those who have already succeeded in the industry can provide valuable insights and guidance. From there, learn how to evaluate potential investment properties. Factors to consider include location, market trends, property condition, cash flow projections, and potential for appreciation.
Explore different financing options- like private lenders, partnerships, or real estate crowdfunding platforms. Understand the terms, interest rates, and associated risks of each option. If you want exposure to real estate without direct ownership, consider investing in REITs. These are companies that own, operate, or finance income-generating real estate across various sectors.
And to be truthful- real estate investing, like any investment, carries inherent risks. Market fluctuations, tenant issues, unexpected expenses, and economic downturns can impact your investments. Have a plan to mitigate risks and be prepared for unforeseen challenges.
- Real Estate Agent · NJ · Member since 2018 · 95 posts · 31 votes3y
Hey I would start educating yourself! Read as many books as possible and listen to podcasts. Figure out what you like and don't like. There are so many different ways to invest in real estate that it is important to figure out your niche or at least narrow down what you think you will like best. Then, figure out your finances. Will you use your own funds? Find a partner? Start saving? Use private money? If you would like to get your real estate license, I would suggest only get it if you really want to sell homes. It is an expensive industry and you should only get it if you really want to make money with house sales. Best of luck!
- 3yScott AllenBusiness MemberReal Estate Agent · Columbus, OH · Member since 2020 · 449 posts · 471 votes
Some good books to read to get good background info and mindset to get started - Rich Dad Poor Dad by Robert Kiyosaki and How to Invest in Real Estate by Brandon Turner. You could probably finish both books within 1-2 weeks.
To learn about different markets for single-family and multi-family, you can you usually network with people on here to get background info and neighborhood maps to know what parts of city's/states are what.
You could get license but, I would not recommend it unless you plan to do real estate full time. Instead of taking classes, you could listen to BiggerPockets podcast to learn from others, if you get a realtor - find a investor friendly agent, you might have to speak with at least three to five before finding one that is a good fit.
If you're going to invest out of state, like in Ohio right below Michigan - work on building a core four (agent, lender, property manager, contractor). If you're going to invest local to start - it is very doable to self manage your properties. Just go to real estate networking events to speak with other people that are already doing what you're looking to get into.
- Investor · Columbus, OH · Member since 2023 · 73 posts · 82 votes3y
@Kaylyn Schroka I think that it'd be advantageous to fully immerse yourself; meaning listening to BP podcast, start reading BP books or any others (Rich Dad Poor Dad by Robert Kiyosaki is a good recommendation), watch youtube videos on topics that interest you, post and comment on these forums.
I wouldn't invest any money into classes or licenses until you're sure you are all in.
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