I've been wanting to get into REI for awhile now and I've spent the last 4 or 5 months going down the rabbit hole.... Researching and taking notes, reading through the forums, reading books, listening to podcasts, studying my market and I've hit a point where I don't really know what else I can be learning. I already have experience working on the construction side of things so I've been trying to learn everything I can on the business side of things and it was exhilarating the first 4 or 5 months but I've hit a point where I feel like I just need to buy that first house and start getting real world experience. I'm not claiming I'm an expert and I know everything because that would be ridiculous. I just feel like I've run out of things to learn and dont know where to find more in depth information about flipping and SFRs specifically as thats the path I'm wanting to take. I know I'm not an expert because the thought of buying my first house is still scary and I dont know every single thing I would do but I feel like I've hit the point where I just need to do it to learn it. Can anyone recommend books or podcasts or other resources that I can use to continue my education? Do you think this is paralysis by analysis? Thanks in advance.

"Is there anything else to learn"? ALWAYS. What that is? You'll know when you learn it. Learning never ends. When it does, you lose.

@Brandon Stiles try some local real estate meetup groups. Meetup.com is a good resource for those but some of the groups will also post here on Bigger Pockets Marketplace too. Even facebook might have some good local groups for you. Always great to network with others and see what they are doing that is working in the local market. Just a thought.

@Brandon Stiles - ahhhhh.... Analysis Paralysis. I suffered from that affliction for 9 years! Get started :) That's one of the biggest lessons I teach. You'll learn more on your 1st deal than all of the past 5 months combined. By the time you do deal #2 you'll feel like a pro and you'll wonder why you didn't start sooner. Just make sure you set yourself up for success prior to putting your offer in. #1 on that checklist is having an Escape Plan for your money!

It's definitely a balance. Don't just buy anything but also there won't be a magic moment. Just have reserves and start. You'll learn as you go :)

@Brandon Stiles Yes I do you have a little bit of experience buying off market. I bought our first few SFH on market (2015-2020), the last few off market (2021-2023). I got away with buying on the MLS because it was during a big appreciation run up in my region, so we were fortunate, but I don’t wanna do that today, I need to buy at a discount to mitigate risk. Prices are flattening in my region, and in my area there’s very few, if any, deals on the MLS t right now.I have a few different jobs, and am a busy guy, so I quickly found out that reaching out to sellers myself (which costs time and money) was not the way I wanted to go. A ton of people on BP do their own reaching out to the seller, and ultimately, it’s how you can secure the best deals, but it does cost money, and it would take time that I don’t have.So I decided to go the next best route for me, which is personally reaching out to all the wholesalers in the area, introducing myself, and telling them my criteria. Letting them know I am ready to buy. I’ve also done the same at a few REIA events. My last few deals have come through relationships I’ve built this way. Not to mention I’ve made a couple friends as well, really cool stuff.REI has really neat people in it if you’re looking for them. Buying from a wholesaler usually means cash, no inspection, and sometimes sight unseen. I always need to see it, and if there’s no inspection it needs to be at a discount that matches the risk. I recommend you ask local wholesalers what their process is for their off market deals. Hope this helps!

I'd take the jump(if you are in the position to do so). You can learn all you want but actually doing it will teach you beyond what books/podcast will. Maybe dial into a certain niche to learn more about

Continue your education by jumping in

@Brandon Stiles Flipping is one of the more difficult strategies in terms of time involved, skills needed, etc. Look for meetups or join the local chapter of the Real Estate Investors Association or join the very active Columbus (Coree) or Cincinnati (Reiagc) ones that are completely online to find mentors, partners and recommendations for vendors, suppliers, etc. Definitely taking action is important not just analysis but having a great network to support and bounce ideas off will be invaluable as you face hurdles. Good Luck-investing is addictive!

How much do you know about building and remodeling houses? If your answer is not 'a lot' then you are starting off with the pack instead of being in front of the pack.... There is a HUGE advantage in knowing that stuff. HUGE.

This might sound dumb but... What else can I be learning?

Christie Gahan

Investor · Hillsboro, OR · Member since 2016 · 304 posts · 153 votes

2y

Quote from @Brandon Stiles:

@Christie Gahan Wow thanks for the detailed response! Definitely gives me a lot to think about. That 65% number is a little unsettling though... If I dont have employees I would only be paying ordinary income tax plus 15.3% for SE tax on my "salary" if I create an LLC taxed as an S Corp correct? I was thinking it would be closer to 40% under 500k income.

65% is on the high side. But, if you don't pay attention to these things you can pay that. To get to that number you would be paying state and federal income tax and both sides of your SSI. This is you taking everything as ordinary income. There is also some sort of surcharge / tax for higher income Might point is, emphasize how much you keep. You need an accountant that likes strategy. You might as well start with a good strategy.

The S Corp numbers you have look correct. But, I dont mess with that too much. The tax rules change on a yearly basis, so if I don't personally have an S Corp or a Self Directed Roth IRA, I don't keep the precise numbers in my head. Plus, it will change if you are married or have kids or whatever. Cuz your gonna hire your kids as a business owner and then as a Dad you're gonna say. You need an IRA. Don't let them spend the money. Ha Ha.

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Shiloh LundahlPro Member

Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes

2y

@Brandon Stiles you’ve done a lot of the preliminary learning. Your next step is to either partner with someone on a deal, get a coach to help you do a successful deal, or jump into a deal on your own. Any of those would probably work.

The way you could partner on a deal with a successful investor would be to offer to be the money partner and fund the deal in order to see the deal through from start to finish. You make a portion of the profit from a money lender standpoint and the experienced investor makes the majority of the profit.

Hiring a coach to hold your hand and walk you through a profitable deal is also another option that can help you get into the game. People on BiggerPockets talk about finding mentors all the time which is great, but often times hard. There are a lot of coaches that are great real estate investors that can help you recognize if a deal is good and if it would be a good deal for you.

the other option in moving forward would be to just pull the trigger and jump in. You can get into a bunch of wholesaler lists and start analyzing deals and then buy one. You’ll probably make mistakes, especially on your first deal, but you’ll learn from them and you’ll make adjustments and you’ll do better on your next deal. And so forth.

Good luck to you and let me know if I can help.

480-206-1209 Podcast Guest on Show #287

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Brandon Stiles

OP

Northwest Arkansas · Member since 2023 · 58 posts · 20 votes

2y

Quote from @Jonathan R McLaughlin:

You sound like you are in better shape than most, congrats. Now:

actually talk to a couple of lenders, ideally local banks. You will be much more confident and conversant with the needed terms after doing so.

Get funds in place, including the HELOC. Time involved is not trivial and you don't want to find a good purchase and be unable to execute

Find a good broker or two you can bring in if you feel you need to

These are actual steps, not research....

Do you have any advice on developing relationships with local banks? Since I dont have any sort of "proven track record" and I dont have a specific property I'm interested in at the moment, how would I go about making those friendships? Do I literally just walk in and tell then I'm interested in investing in properties in the near future and go from there? Also what are the real advantages of using a broker? If I form relationships with a few local banks would a broker really be of any benefit to me? I plan on doing one property at a time until I get more experience and start branching out to SFRs.

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Jonathan R McLaughlin

Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes

2y

Great question. Definitely talk to a few brokers who can give you the lay of the land, and you may well wind up going with one of them, especially for a vanilla deal, but for the local banks:

go in, find a commercial loan officer, take em to coffee and ask their advice. Have your finances laid out in a professional-esque format—

Ask about their underwriting process, what kind of lending they are looking for right now. You can ask about rate but it shouldn’t be a major talking point. Maybe have in your pocket the examples of a couple of deals you could have done.

It's ok to be new, but have your {*##!€ together. Do you have relationships with contractors? Let them know. You'll come out of these conversations with actual parameters of what they will lend on LTV etc and be able to model stuff better. You can probably get the actual numbers just on a website, but this will be a more robust picture.

When you find a bank you like see if you can put some funds on deposit there.

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This might sound dumb but... What else can I be learning?

This might sound dumb but... What else can I be learning?

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