We all know taking action is the most important part of any investment/business venture.
However taking the first step is often the hardest when you do not know what road to travel down. After reviewing the basics to RE investing on this site I really enjoyed the outline of career ideas that allow you to earn while you learn.
Right now I am employed as a relationship manager ( Call center) at a bank. It pays fairly well but I can not wait to get out and start doing something that will push me closer to my goals. On top of that the job is repetitive.
Goal- Learn real estate. Acquire property's that cash-flow a substantial amount of money, giving me the freedom to live a lifestyle free of employment.
I do not feel confident in my knowledge/experience/connections to jump in right now. I also lack the capital to make mistakes during the learning curve. I know many here have experience and an abundance of advice to share.
Question- What is the best way to get started. EARNING AND LEARNING. Do I become a Realtor? Property manager? Mortgage broker? Also Which path did you take and why or why not has it been the right or wrong choice?
The ideal situation would to hook up with an investor as an assistant. But opportunity like that are probably few and far between.
ANY FEEDBACK IS GREATLY APPRECIATED
@Chris Lynch - It seems you want to do buy and hold. IMO one of the greatest advantages you can have with this path is a solid W-2 income. It is MUCH easier to get a loan with a salary than being self employed (most of the positions you listed are) plus you will need 2 years of history in the industry to get conventional financing.
Thank you for the response Brianna. While I do understand what you are saying, that path seems like a really slow way to go about this. My thinking was to get into real estate as a career ( Agent, property manager, broker ect). After being in the market for some time and making money and building experience/networking. Start to make flip some propertys to fund long term buy and hold property's that produce cash-flow.
My current job consumes alot of time and I am not really learning anything that pertains to Real estate investing.
I just got started on this website and am interested in getting my feet wet as well. Have you read some of the articles about starting with little or no capital? Chapter 6 of the Beginner's Guide had some good high-level information (http://www.biggerpockets.com/real-estate-investing/financing), and there are some great posts on here about raising capital for your investments. But if you aren't ready to jump in, maybe just continue networking in the forums for now. Personally, I wouldn't make a career change because a steady paycheck is a good paycheck, and it is easier to get financing if you have a well-paying job in place to show stability.
Thanks for the link Katy
@Chris Lynch sounds like you're starting off right by jumping in the forums and asking questions. This site and (equally as important) the BP podcasts have been extremely educational for me.
I'm not too far ahead of you. I started the same way in the same situation and also knew that taking some kind of action was the most important thing to start building momentum.
I decided to go down the road of agent to help overcome a great recession credit score and a lack of start up capital. The lessons I've learned from taking the licensing class and the network I've started to build with the agency I joined are already moving me towards the goals I want to achieve (like was stated above, buy and hold "passive" income is my objective). The in-office email blasts of listings from fellow agents in the firm keeps me abreast of great investment property listings even before they hit the MLS.
A couple of cautionary notes about the agent track:
1) There is a significant startup cost associated with becoming a Realtor. In Virginia the total for pre-licensing classes, licensing exams, E&O insurance, Realtor association fees, etc. comes to roughly $2,000. A great investment, imo, and one I funded through a method not often mentioned; a loan against a whole life insurance policy I've held for a while. The balance is due whenever I have the means/inclination to repay it (although you will incur interest, so talk to your ins. agent).
2) Even if you plan to work in your off-time from your day job, it's still a full-time commitment. Nights, weekends, and other days off are mostly spent networking and trying to get off the ground.
In the end, I've set out a plan for myself and feel good about attaining it. I hope this was helpful and best of luck choosing the right path for you!
Hello @Chris Lynch
I think you've answered your own question. What's the best way to get started in Real Estate? Read your first listed goal: Learn Real Estate.
You said that you don't feel confident in your knowledge/experience/connections to jump in right now. Then don't. Work on that. At least work on the knowledge and connections part. Experience comes with experience. Look for local groups (REIA's or MeetUps) and network with them. Find a partner to help with the lack of Capital. Take inventory of what you do have and learn how that can be of value to one of those contacts you are going to meet when you start networking.
Good Luck to you!
Thanks for the response., Getting starting as an agent can be costly. However funding the start-up does not worry me as much as the question of how long will it take to start bringing an income in from agency. Some people say months, Others say as long as a year.
I do feel like it is a great opportunity to surround yourself with like minded people who you can learn from. Also, like you said you do often come across great investment opportunity's.
Part time was my initial thought. Unfortunately I have learned that I am not allowed to be licensed as a real estate agent while working at a bank. I guess it becomes a conflict of interest.
This is my reason for having to make a choice. It shouldn't be a hard one since I do not enjoy the cubicle lifestyle and I do not see it getting my to my goals. Agents work hard. But I feel there is more of a freedom to it.
That's a great point on the banking thing! Didn't think about that.
Here's another idea to gauge your timing on securing listings/buyers:
If you attend a local REIA meeting, you could survey the crowd about how many agents attend their meetings and/or how many attendees are agents themselves. If there aren't any regulars, it's a safe bet you could build a good network of buying and selling investors.
I can definitely relate to that paragraph about the cubicle lifestyle, agents working hard and the more freedom thing.
I did what you are contemplating. I once quit my job and went full-time into agency. I was young and had no obligations, so I could suffer through it. I became a Real Estate agent and I already had some knowledge and experience in the field. Still, I was not a good agent. I was starving, couldn't list or sell anything. I ended up selling vacuum cleaners for a while just to make ends meet. I was working hard, but it just wasn't working for me. That is until I found my niche. Once I discovered what I was good at, things took off. I became the best in the state at one particular short sale program. I focused on that one thing and nothing but that, and I found really good success.
Maybe you could narrow your target, educate yourself, and surround yourself with a network of like-minded people before you go that route, and you just might make it. But you'll want to load up on patience and persistence.
REIA meetings are a great idea. But it seems like all the local ones are during my work shift lol. I think Ill have to schedule a day off.
You did exactly what I am contemplating to do. Do you think leaving the cube and getting into real estate was the right choice? I do understand you had a struggle but how long did it take you to pull through it?
After the struggle was over do you feel like real estate is much better then being a 9-5er in terms of freedom+happiness? ( We all know it is in terms of money and opportunity. * J-O-B= acronym for just over broke * )
Also, I know getting starting is going to be hard like you mentioned. But if you had to do it all over again how much would you save before making the move?
I am a young guy also and I do not have many expenses. Probably $700 a month at most with my bills.
I do see many offers from local brokers offering salary for licensed apartment leasing agents after searching craigslist ( Boston area). This might be a way to start. Have you seen this in your area before?
So glad you started this post. Your post entails exactly what I've been contemplating for a while. I too, work a 9 to 5 in the cubicle world. I have been in management for some time working long hours daily and really want to get into real estate. I've decided that if I'm going to work 10 and 12 hours days, I might as well do so for myself. I'm looking for that financial freedom that will allow me a much more flexible schedule.
Since I've been on bp, I have been reading the blogs, listening to the podcasts and reading books on various avenues available in the real estate world, property management, wholesaling, becoming an agent, REOs etc. All of which sound very interesting to me. Because I tend to get bored easily with my work, I do know that I will most likely pursue a couple of different paths at the same time.
I do understand that there are certain perks that come along with being w-2, such as Katy mentioned above. So, I've made up my mind to follow a path similar to the what Jon is taking. I'm going to get my real estate license this summer and start working as an agent in the evenings and weekends. I know that I have a lot more to learn, but I have found bp to be a tremendous wealth of knowledge.
So good luck to you in finding your niche.
Welcome to the BP fold :)
I recommend buying a 2-4 family place as an owner occupied dwelling as your first investment. It will teach you everything from plumbing to budgeting.
Keep your bills low and your income growing. Real estate takes some serious budgeting. I'd start paying into a "real estate investment" today.
There is nothing wrong with keeping your full time job. W2 positions are great because you know exactly how much is coming into your bank account and when it will be there. They aren't for everyone, but keep yours until you don't need or want it.
Q: I like the concept of MFH investing, where should I start?
1. Eliminate your rent payment
2. Bring all deals to the BP community (and be humble when doing so)
3. Stick to the returns you want
Learn everything you can about multi family investing. Every day you should answer a few questions and write down several new ones.
The general theory is that you need to drive costs out of your life and/or add new revenue. If you live with your parents, and they don't charge you rent, good. I'd then start forcing yourself to put $500-700 away each month as a "rental" payment towards some real estate.
If you pay rent of any kind, to your folks or to another landlord, find a way to eliminate it from your life. My suggestion is to find a 3 or 4 family property that you can purchase. FHA loans are a good way to go, but be wary of the additional percentage points you have to pay each month as PMI. Homepath loans are great as they have no PMI. VA loans are even better, but require you to have served in the US military.
Run every deal you find through the BP community. Some of the responses are harsh, but they are eye opening. There are people on this site that have been buying and selling 4x as long as I have. When I find answers to my daily questions, I can almost always find the answers here at BP.
Last one for the moment: stick to your numbers. It bears repeating: stick to your numbers. If you want $200/month and a 12% Cash on Cash return for your investment, stick to that number. If you pick 12%, 9% is not good enough, nor is 11.7%. Make your offers accordingly.
Here are 4 great ways to get into your first place:
3.5% AND Renovations
FHA 203k loan (http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/203k/203kabou)
Homepath Owner Occupied
Not as cheap, but come with renovation options attached to the loan:
Homepath Investment (SFH only)
Homepath Investment (Duplex only)
Homepath Investment (3-4 Unit Buildings)
Please consider the best financial investment for newbies.
Do you think leaving the cube and getting into real estate was the right choice? And how long did I struggle?
Right or wrong? I did it and I have no regrets. But I didn't leave the cube, I was a tradesman, a drywall finisher. I know it was at least a year before I started selling the vacumes. And, after that I actually started working for a moving company. Oh yeah, that was the bottom.
After the struggle. . . and doing it all over again. . . Yes, even the hard times, looking back were a blast. I think if it's in you to be that, you will find some joy, even if you are poor, because you always have hope.
Savings? IDK I had next to no expenses. I lived w/ my dad until I started selling the vacumes.
I did have an offer similar to your salaried apartment lease deal. I turned it down to sell the vacumes - probably my biggest mistake. But, I did learn lots of interesting stuff selling those vacumes.
After I did finally make some money in RE, I quit and spent a year sailing in the Caribbean. I then decided to come home, fall in love, raise a family, and work in a cube. So go figure.
My kids are just about raised now, so time to start the adventure all over again.
I have been an agent since 2001 and love it. There are so many ways to make money as an agent, you just have to find one or two that fit you. If you want to be a serious investor it is a huge advantage to be an agent as well. I have 10 long term rentals and 8 fix and flips right now and I would not have gotten half of those if I was not an agent.
I would read Gary Kellers books and learn all you can about real estate. Talk to some local agents and see what they think about real estate and your local market. Remember about 10% of agents do 90% of the business and most agents don't work that hard. I think the stats show 22% of agents don't even work 10 hours a week towards real estate. If you work hard, plan and do the things that get you deals you can be in the 10%. Don't let people tell you there is no money being a real estate agent.
Thanks for the response, really inspirational. Everything I have read online makes it sound like its impossible to make money as an agent. Which has been really discouraging because I feel like it would 1.) Offer me freedom from a job I do not enjoy at all. 2.) Unlimited earning potential. 3.) Allow me to network with people in the business. 4.) More opportunity for investment deals.
It just sounds great. But I do not know how much I should save up before I make the transition. Also I do not know how long it will take me to make some money as a new agent. And are there ways to speed the process up. What was your experience with this these things I mentioned when you first started out?
It sounds like you have had some great success with it.
Also thanks for the book recommendation. I just ordered "the millionaire real estate agent"
I understand how you feel about the j-o-b, heck I'm sure everyone on here does. I just went full-time real estate in October, I was poor then and still am now, but that's ok for me. Heed @Aaron Montague 's advice, keep your job for now, buy a 2-4 unit, move into a unit and continue learning about real estate. Don't know how much $ to save? Well, once you move into a muti unit your monthly expenses will sharply decline, then eliminate any other unnecessary expenses like car payments, credit card bills, etc. You'll find that you can then survive on a very low amount of income, at that point save a years worth of expenses and then, after you've researched exactly what you want to dive into, dive head first. Don't hesitate.
I've been living in a duplex for almost 4yrs now, during that time I've never made over $15k as I worked mainly part-time but my expenses were very low. I sold tile and worked as a leasing consultant for a property mgmt. company, learned a lot btw. I lived (and still do) a very modest lifestyle but I learned a lot about real estate and now I just finished my first flip and will close on a package of 4 houses next week, 2 flips and 2 rentals. It has paid off for me but the main regret I have is by not having a full-time income, though it gave me more time for fun and education, it prevented me from getting into the game sooner, though one could argue that may have been a good thing.
My thoughts is to find a mentor that does the thing you want to do. Make an agreement with them, and learn. In business, I have seen that a mentors history of others triumphs and failures can be learned from. have a good job to raise the capital for the seed money, and on the night and week ends go find a real estate mentor and work with him/her for a while and see if you even like doing real estate work. maybe even become a professional and get a real estate license. then once you are confident in what you know. you will have the seed money for the deposit of the house and get your team together of buying properties and you are on your way to success.
When you say REIA are you talking about the local real estate meets that you can find on sites like meet-up.com or are you talking about something different?
This is the one I am talking about, they are in almost every state
Just Curious @Chris Lynch Have you ever thought of working as a bird dog. I'm really ready to get out of the long hours of an office/ daytime position.
However, I feel similar to you that I lack knowledge/experience/connections to jump in right now.
I decided this weekend I have to learn somehow, why not jump in as a bird dog.
Any thoughts from the experienced Investors??????
@Chris Lynch Yes, REIA = Real Estate Investors Association
Pretty much same as a meet up or any gathering of RE folk.
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