Little Rock, AR · Member since 2014 · 8 posts · 0 votes
Hey BP I'm new to the site and also new to the ideal of REI. I'm from Arkansas and I really want to get started in REI this year. I'm 21 years old and a senior in college. I don't have a lot of money saved up currently but I don't want to keep putting off to save up money. I would like to find a single family property that I can get for fairly cheap and I don't mind doing a lot of the rehab work my self.
Any advice would be great, How to get started places to look for the types of properties that I am interested in ect.... Also I am looking for a buy and old property to rent out.
Davion, the best way to approach it would probably be to start by doing some wholesaling. This can allow you to get you your feet wet and gain experience. At the same time, read books, watch videos, go the REIA groups, network and all the rest. After a while, perhaps you can find a partner who will front the money while you find the deals and oversee the rehabs. Then you can split the profits. Or you can do some creative financing for flips such as subject to's and seller carry backs.
Davion, the best way to approach it would probably be to start by doing some wholesaling. This can allow you to get you your feet wet and gain experience. At the same time, read books, watch videos, go the REIA groups, network and all the rest. After a while, perhaps you can find a partner who will front the money while you find the deals and oversee the rehabs. Then you can split the profits. Or you can do some creative financing for flips such as subject to's and seller carry backs.
You could buy a duplex, or a house with a separate apartment and live in one unit while renting out the other. You would then get your feet wet in landlord/tenant, probably some rehab, and then could decide if you want to hold or later sell. My husband and I did this fresh out of college. He bought the house from his brother, we lived in the house and we rented the apartment. There was no internal access to the units. Regrettably, we sold that house, many many years before we even considered REI. I only share this because it was a squandered opportunity for us to cheaply being REI. Since you know you want to do it, it may be an alternative to consider while also taking a "day job" in some related field (title company, realtor, lender, etc).
You could buy a duplex, or a house with a separate apartment and live in one unit while renting out the other. You would then get your feet wet in landlord/tenant, probably some rehab,
I have thought about that option and I have been doing a lot of research on it also. I would really like to do that my biggest problem is getting the money to get started. I don't want to start out with anything too expensive because when I graduate I'm not sure if I will be able to find a job to keep up with the payments until I have done the rehab and find a tenant.
Honestly, unless you are hell bent on REI only from day one, I suggest you start looking for a day job in a related industry so you can start learning "on the job" while earning a steady paycheck. This will allow you to have some income flow to show lenders and let you start saving. As a first time buyer on an owner occupied, you may qualify for some advantageous lending programs on this first purchase. I would buy a home (ours was a really old house that had an apartment added to it) that you can afford on your salaried paycheck, and then bank all the rental payments. Use that to build up your cash reserve to have a down payment ready for your next property. Eventually, you can decide to continue to hold the first property and just move out, or you can decide to sell it to upgrade.
Anyway, if I could go back in time and be in the position that you are, that's would I would do.
I have actually been looking into getting my Real Estate License soon just because that is also a field I am interested in. But I am going to school for sociology and criminology so my plan is to get a job working for my state or maybe a federal job in my state. That way I will have a steady income until my REI take out enough to make a living. I am going to start back looking into the multifamily properties because that may be the best option for my fresh out of college and also allowing me to qualify for some of the first time home-buyer programs.
Davion, the first place to start is to go the the REIA group meetings. I would also read some books on creative financing and wholesaling (be careful, some are over-hyped sales pitches). But Wendy Patton's "Lease Options and Subject To" book is a good start for creative financing. I can't think of a good wholesaling book off the top of my head, but "The Millionaire Real Estate Investor" is always a good place to start and does talk about wholesaling some.
Well damn, no coffee conversation for us then. Basically, if your credit is good and you have a steady work history you can get HUD to grant you a 15 (this is important) year loan for very little if any down. Get an REO or HUD repo thats priced well and needs work you can do. Clean it up over a 6 month period and then you can do a cash-out refi on a 30 year mortgage. Now you have cash in hand to start your business and cost you basically nothing except the repairs you do over time (so make sure the repair materials are inexpensive).
@Davion Riley REI is not easy without being able to bring something to the deal. Most ways of making money in REI require you to contribute, at a minimum, cash, knowledge, experience, or time. Since you have no cash, build your knowledge and experience through working in a related field, or find a way to turn time into an asset for someone else. Buying a duplex, as suggested, can also be a good starting point.
For some reason people frequently suggest wholesaling. But wholesaling, to do it right, requires both knowledge and money. Neither of which are things you currently possess.
I suggest reading J. Scott's recent blog post about starting out. It might not be what you want to hear, but it has a lot oof suggestions that you need to hear.
@Davion Riley I would identify what area of buy-and-hold real estate you like most then study up on it by researching posts on BP, attending seminars and speaking to people who are in the particular area. If you don't know what you want to get into then I would identify all the areas of real estate and talk to people in those areas to get a better sense of it.
In my opinion, the best way get into a deal with little to no money is to add value to another investor's biz by helping with them with their next deal. Then you could get a cut of that and build your way up from there.