The Question i'm sure everyone ask.....

17 Replies

Hi:

My name is Drew Edwards. I am super eager to get started into real estate investing.. however, I want to gather as much knowledge as I can.   HELP!

I am looking for any advise on how to find/purchase my first deal.

What is the best way to get funding?

How do you know whether to try to filp or rent?

I have all the questions a newbie would have.....

Any advise is greatly appreciated!

@Andrew Edwards

Welcome. Time to build the legacy and foundation below.

Check out the Start Here page http://www.biggerpockets.com/starthere

Check out BiggerPockets Ultimate Beginner's Guide - A fantastic free book that walks through many of the key topics of real estate investing.

Check out the free BiggerPockets Podcast - A weekly podcast with interviews and a ton of great advice. And you get the benefit of having over 70 past ones to catch up on.

Two Great reads, I bought both J. Scott The Book on Flipping Houses,The Book on Estimating ReHab Costshttp://www.biggerpockets.com/flippingbook

Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and all the cash buyers (rehabbers) you will need.

You might consider Niche or Specialized Housing like student housing. Rents can be 2-4 times more. Remember you don't have to own a property to control it.

Download BP’s newest book here some good due diligence in Chapter 10. Real Estate Rewind Starting over

http://www.biggerpockets.com/files/user/brandonatbp/file/real-estate-rewind-a-biggerpockets-community-book

Good luck

Paul

@Andrew Edwards  

 - Welcome to BP.  Tell us some more about yourself so we can give you better guidance.  Do you own your home, or do you rent?  Do you have any experience in any of the following areas?

construction, engineering, sales, marketing, project management, law, accounting, business, etc?

What is your educational and vocational background?  How is your credit?  Do you have any money and/or lines of credit?

Thanks for the Info, I will definately take a look at  the starters guide and other reads.  

A Little more about me..

I do own my current home. I also do have some experience in several of the above areas.. Construction, marketing, project management and some business skills

@Bryan L.  

I have good credit but do not have the savings to really use my money to get started...

@Andrew Edwards  

- Any equity in your home? Can you get a HELOC (home equity line of credit) against it?

@bryanl

I do have equity in my house, I actually own it out right.. It was a Family house that I remodled for myself and plan on renting it when we decide to move...

I do not know if it is a smart or not but i feel that I want to kinda leave this house out while trying to get my Actual first deal. I want to be able to use it help fund the mortgage of the next house I will live in.  Does this sound reasonable?

Would it be wise to try to get a conventional bank loan to fund my first BUY? or try anyway..

@Andrew Edwards  

It's your comfort level on tapping your house, but your are going to need a 20% down payment plus rehab (that's the standard anyway) to come from somewhere. Unless you you can scalp tickets from your ticket oak that is. :)

I actually think it is a great idea to leave the property free and clear at first if you can afford to purchase w/o the use of it. That will allow you to see if renting is for you before your refi. However, this might not be possible w/ all of the hits you will have against you w/o counting anything in the positive as it is not being rented yet, let alone for 2 yrs like some places like to see. How do you plan to fund your DP?

I would have to get funding via a traditional loan or a partner... From what I understand from the people in my area I have talked to.. they all love renals.. due to the large ARMY base in town.

Pete I know this is a stupid question but what do you mean by DP?

@pete

I wish I had a Ticket OAK....Funding would'nt be an Issue then and you would be the coolest guy ever!

@Josh C.  

Sorry, downpayment- as in are you using some sort of no down program, seller finance, low down payment, or what to purchase.

Hey @Andrew Edwards  ! I can see that the name tagging system is bugging you. No worries! It was so frustrating for me at first, but I promise you'll get the hang of it.

1. What is the best way to get funding?

A: Watch these videos- you'll get great answers. 

See: https://www.youtube.com/watch?v=E1GfiEZDf7A

See: https://www.youtube.com/watch?v=TElR17z2FwQ

2. How do you know about whether or not to flip or rent it out? 

A: It's tricky bud! It really depends on the deal. Let me explain. 

Would you rather have 50k in your hand today or $100 a month and have to deal with management problems? 

Scenario 1~ I'd rather have the 50k today than have to manage a rental for a measly $100 a month in arguably NOT net cash flow and personally managing it. Long term rentals are KEY to building wealth in real estate, and if you don't have them then you have no recurring income every month. Without that cash flow and the ability to inventory deals then you're going to have to constantly find deals. 

Scenario 2~ Wholesale a deal for 5500 dollars today or receive $350 in net cash flow monthly? I'd go with a well managed $350 month cash flow (darn good margin for a single family) than be short sighted and pocket a few bucks. The cash flow from the rentals is virtually tax free whereas the wholesale would be taxed as earned income, AKA job money. You'd make back the gross cash profit from the rental in less than 1.5 years and you can hold on to it forever. The tenant will pay off any loans on the property and you will see the monthly rent checks rise over the years. It's a wealth building blue print.

It's all a matter of opportunity cost and measuring out which option is best for your goal.

You'll know what to pick based on plan.

~John 

@Andrew Edwards - Dude, you are sitting on a gold mine (actually your sitting "in" a gold mine). Go get a HELOC set up on that personal residence even if you never use it. You may need it some day for an emergency, medical bills, or whatever. Also, you could use it to fund a flip, and then pay it off once your flip sells. If you go the route of buying a rental, you could use it to buy the rental, then get a bank to do a cash-out refi on the rental and use that cash to pay off the HELOC. Just spend some time talking with the bank before you ever buy that rental so that you know for sure that they will do the cash-out for you. Now, just don't use that HELOC to buy a Harley, a Triton, a vacation, a TV or anything like that.

It all depends on your goals, both short and long-term. For me personally, I've found playing the Cashflow 101 game helps to churn the wheels and get my ideas in motion. Each time I play, I learn something new.

Best of luck to you!

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