How do I start out in investing in real estate? Are my ideas good?
I know investing in real estate takes determination and time. I am 20 years old in college and majoring in Law. I work and go to school but I am determined to invest in real estate on the side. So to start off I was thinking of buying somewhat run down, cheap property from a seller rather than from a real estate company, whether its a duplex or one level home... and fixing/re-modeling it a bit, then either selling it for profit OR renting it out right away. Is this a good idea?
My issue here is that I do not have thousands of dollars to buy a house; I am a broke college student, working by pay checks. I was thinking of these steps..... AND I need help of what you guys think....
1) finding a cheap home or duplex, price below the market price; buying from a desperate seller. (ex: seller wants to sell for $85,000)
2) I go take a look at the property and it needs a lot of work done! so I make a deal willing to pay $45,000. lets hope the seller sells for that much since he is desperate to get rid of it.
3) I get a bank loan for 45,000 since I cannot pay the house right off the bat. So the bank lends me 45,000 and I pay the seller so we do not have to deal with each other again after this deal... We both win, seller has SOLD the property and now I OWN it so we're both happy right?
4) Now I move in the home, living rent free but have to pay off the loan of 45,000, making monthly payments while remodeling. Will I be spending a lot of money paying off the loan plus remodeling? Yes! Will it be worth it later? I REALLY hope so!
5) Wow the house looks good now; fixing the house nicely was quick! but I am still paying off the loan... so lets rent it out.. looking for a serious renter.
6) I found a renter who will pay 1,300 a month which will help me pay off my bank loan and utilities. Once the loan is paid off, renter continues to rent and who gets profit?.....
ME!!! .... then I would continue of doing this in a manageable manner.
BUT.... I have a problem.
I have no/bad credit so how will I be able to get a bank loan. Don't they check your credit?
Are there any other ways of investing? This is just what I am imagining that may work.
I need opinions on this!!