I would love to start getting into the real estate business but I do not have the real estate knowledge yet. So I wanted to ask how do I go about learning about real estate? My community college has a real estate program but is that a good way to learn about the business? What do you guys think I could use the feedback because I do not know anyone in the business. Also what would be a good way to start out after my education? Should I go into owning a duplex and rent it out or what would be a good start for a beginner? Thanks so much everyone I really appreciate it
When you receive a good answer, please pass it on. I'm in the same boat as you.
Yeah no problem I will definitely let you know. It's nice to know I'm not the only one in this situation and I am excited for an answer because I want to get into the industry as soon as I can.
The question about what to do, where to start, who to call. The short answer is that sky is the limit. Some of us got into RE at 19 barely out of high school not knowing what we were doing, but you eventually you learn. RE is like swimming, you can learn theory on books and internet but if you do not jump in the water, you will never learn.
The first things I would do is :
1. listen to every BP podcast
2. down load the deal analyzer spread sheet and start looking at deals to become familiar with the terminology.
3. by listing to the podcast and looking at deals, come up with a game plan
4. come up with your financial strategy.
5. start biding on local deals
There is the possibility that you may scrape your knees a little at first (not do the bast deal) but it would be better than doing nothing at all.
Another point of advice is to take the time to mature at a pace that is right for you.
Don't let some guru charge you $15k to visit your home to help you set up your RE business. (some one actually called me to offer this)
Just like all fruit, it is more sweet and it taste best when it matures at God's intended cycle, once we accelerate the process with hormones and non natural stuff, fruit will not taste as sweet. So take your time but take action
I have to agree with Luis Montanez 100%, especially with his advice "to take the time to mature at a pace that is right for you." I am in the same boat with guys, I was been bitten by the 'real estate investing bug' back in April this year and so far have read books, listened to pod casts, attended REI network meetings and guru freebie seminars.
Many investors will say 'just get in and do deals', but some will say they spent some time educating themselves. You really have to ask yourself the question of what has your past decisions dictated to you? If you are spontaneous and jump right into things, have you had regrets doing so? If you have, then that may be a clue that you'd want to switch gears.
My advice to you would be that if you want to get in the game sooner than later, then partner up with someone or find a mentor or coach who you can lean on. You may be better off (long-term) to set up a strong educational foundation, especially if you are brand new to the industry.
As far as taking real estate classes at your community college, you're taught mostly concept and theory, not real world application. Stick with BP to get educated since it so easy to find answers to basically any question you may have on RE investing. Once you've become educated, you can use more of a methodical plan of action and the direction you take will be less of a shot in the dark.
I would agree with what Luis said about going at the pace that's right for you. I think that's very important because your level of risk tolerance will not be the same as the other guy's so going at your own pace will help you to sleep better at nights.
However! The old adage comes to mind that "if you fail to plan, then you are planning to fail"!
I believe that it is always key to get educated before jumping into anything. It does not necessarily have to be through classes at school, but by continuing to post and read the blogs on this site and speaking to people in your area about their experiences just to be prepared for what you're getting into. Especially for an investment like real estate that generally requires a relatively high initial capital investment, I think its best to have some level of theoretical knowledge to help you navigate around potential pitfalls somewhat more effectively. Best of luck!
Welcome. Time to build the 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.
Consider checking out HUD homes for small multi's owner occupied gets first crack.
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
Thank you everyone for the continued support and advice. It's very much appreciated.
IMHO before you can decide if our answers to your questions are for you you need to ask yourself a few question.
1) What does wealth look like?
2) Why use real estate to earn it?
3) Will this a be part time or all time venture?
4) what are you going to do with wealth after you have it?
5) Are you an instantly motivated person or are you someone who takes your time to decide?
6) Are you better with your hands or your mind?
7) can you speak in front of a crowd or rather stand in the corner a watch?
What had helped for me, besides of course reading and listening to the podcasts is going to the meetups. By meeting successful investors and talking to them in person was huge. What that did was make investing real instead of something abstract that other people do. It becomes real and tangible.
Meeting people in person is hugely motivating and you learn a ton. You may even meet a potential partner. I'm not big time, just a beginner like you, but if I didn't go to meetups, I wouldn't have dipped my toe in the water.
If I may ask how did you start in the RE business and where did you get the education about the business? I'm just wondering because I was considering my community college to take a few classes to get prepared to take the test required in California to get my real estate agent license. Also how did you get your foot in the door in real estate and to clarify what was your first deal, I guess you can say. I am not questioning your knowledge or credibility I am just wanting to hear from people who have actually been there already. Also thank you for your reply to my post it is highly appreciated.
@Gabriel Ortiz Start at the end. @Michael Q. asks some good questions. The most important is the first one "What does success look like?" Without knowing what you are trying to accomplish and what resources you have, no one can give you any meaningful advice on how to get there. The only good thing about having no goals is that it is spectacularly easy to accomplish nothing.
Personally, I have a certain number of SF homes that I want to own. These homes will generate a given amount of passive income each month. The amount corresponds to what it will cost me to live the lifestyle I want to live, cover my children's education, and have a 'rainy day' fund. When I started out, I didn't have the cash to buy that number of homes, so I had to consider a REI strategy that would generate cash. I considered wholesaling, but the time commitment was too high since I had a FT job. Plus, I just like rehabbing better. So, I spent time and money learning everything I could about being a great rehabber. I developed/bought great systems and learned to leverage experts.
Forget the CC. Lay out your goals. Figure out which RE strategies you need to achieve them and focus on learning them. Save your money for classes / mentors who can teach you the ropes in the specific strategies you need.
These answers could go on forever. But in quick answer:
1. Define your end goal? How much cashflow are you looking to have at the end.
** Real Estate Investing is like a race, you must have a starting point and a finish line most people in REI never clearly define those two objects therefore they always struggle with what type, and when and where to execute their chosen REI Tactic.
2. Choose your tactic.
**Once you have an end goal, and in my opinion that end goal will ALWAYS be about cashflow, if not, then I would say you are more interested in RE Entrepreneurship than RE Investing. Once you have defined the end goal you must now choose YOUR TACTIC. Now this is where everyone differs at and I do not think there is a wrong answer here it is more about what you like, then maybe the area in which you want to invest in, price range etc. But you have to choose what tactic you want to do during your path of RE while you are trying to achieve said amount of Cashflow.
THINGS TO WATCH OUT FOR:
1. Paralysis Analysis -- So many investors get this. They just analyze and analyze until the kill ever deal. Analysis is great but there is no such thing as the "Perfect Deal" just do a deals.
2. Don't try to be all things to all Houses. I see this all the time people want to do this type of deal then this type of deal then one of these and one of these. BLAH BLAH BLAH find me one successful business that does that it doesn't exist. McDonalds is one of if not the most successful food franchises in the world but you cannot go to a drive thru and order a filet or orange chicken and brown rice. Albeit those items are food and McDonalds serves food... But they don't serve every type of food in America. The same applies to REI don't try to serve every type of REI to every house. Pick what you do and do it well. Create systems and procedures and then build a business.
Last 18 months or so we have done close to 100 Buy-Fix-Sales not that plus lease options plus tax leins plus subject to, plus multi family, etc etc.
Anyways, hope that helps some let me know if I can help anymore. Below I attached one of our flips. Check it out. You can do these too!!!!!
Make a list of your strengths and weaknesses and see which type of investing corresponds best.
So many people want to get into real estate to get rich. But if money is your main objective and the deals are only tools to make money, then it can be a very frustrating businesses.
For example, if you love to crunch numbers, but hate to deal with people - then trying to buy wholesale deals and negotiating directly with owners, might be a difficult rout for you. Maybe notes or tax sale might be better for you.
What if you love to fix and design things - maybe then rehabbing would be your thing.
What if you really love to deal with people and can sympathize with their situation and look at things from their side? Maybe you'd be perfect at buying deals directly from owners.
There are many different ways to work in real estate and I would suggest to find something that you really enjoy doing and then when the school of hard knocks teaches you (and it doesn't matter how well you plan things out, there will be things that will go not as planned) some difficult lessons, you'll at least have fun doing it. ;-)
Theres a thing called "shiny object syndrome" that everyone knows about. Its when a newbie gets excited about every strategy they hear about. Lots of us go through it but you wont be successful until you get past that stage. Listen to the podcasts and let them guide your curiosity, check out different strategies and then decide on ONE as was stated above.
You can generate income in RE (wholesaling, rehabbing) or you can invest your money into RE (buy & hold) or you can do both. BP is mainly focused on these two areas (generally referred to as real estate investing or REI for short), but you can also get a job in the industry like as an agent, mortgage broker or even in construction.
Beware of wholesaling. It sounds easy but probably 99% of people fail at it. However if thats what you choose then send me a message and Id be happy to speak with you, Im in north bay. If you choose something else go talk to someone doing what you are interested in. Good luck!
When first starting out, it's best to look at your overall end goal. From there, you'll have to make short term goals. With each goal you achieve, you'll be one step closer.
For me personally, it's all about lifestyle design. If you know what kind of life you want to lead, it will be much easier to draft up goals around your ideal lifestyle.
Both the Rich Dad, Poor Dad book and the Cashflow 101 game have been instrumental serving as a blueprint for my experience and success.
Hope that helps!
You have made an excellent start by finding Bigger Pockets and
Account Closed are all wonderfully generous locals who have kindly shared their experiences and wisdom. This would be an excellent meetup to start with:
e.g J can tell you about FHA loans for 1-4 units; Johnson can share out of state experiences and Minh seems to have done everything! ... plus many others with successful and different strategies... I find all of them interesting, educational even if some may not immediately relevant.
Hope to see you there!
I'm not sure if flipping, as suggested above, is the best way to start in RE in the Bay, as it involves a certain level of knowledge about estimating known and unknown rehab expenses, after-repair value, and oftentimes more capital and short-term borrowings to get done (especially here!). In this market, there is a high price point - forcing you to either risk a lot of capital - or try to do it out of area.. both risky for a newbie IMHO
I agree with @Kathryn M. (and thanks for the shout out!) that it's best to look at all the different strategies that are out there, and find something that matches your lifestyle, resources, ability, funding, etc.. You might consider partnering with someone more experienced (I'm not saying this because I'm looking for anyone right now - just my 2 cents if you want to gain some experience.) If you have funding and find someone experienced you can trust, maybe they can do the work and teach you along the way, and both of you make some money..
I started by using an FHA loan to put 3.5% down on a 4plex in Rich mond. Great way to get started if you have limited capital (if that's the case), IMHO, w/ rents from the other units covering the mortgage. They also use 75% of the rents from the other units to qualify you for your debt-to-income ratio (DTI) on the loan, which will boost your purchase price a lot. This has it's own risks, but at least you have 3 others to help you pay it back over 30 years if it's worth a bit less than you thought, unlike a flip! Lots of good ways to make money. Just make sure you do your homework whatever way you choose, and understand the risks your taking. If you think there is no risk on one of these deals, then stop! And reassess!
A lot of good advice above. I don't have much to add. Just remember 2 rules from Warren Buffett's handbook when it comes to investing.
Rule #1 - Don't lose money.
Rule #2 - Don't forget rule #1.
Like everything in life, something is expensive for a reason. Something is cheap for a reason. The grass is not greener on the other side.
Hope to meet you at one of the meet-ups. Thank you for the shout out and compliments @Kathryn M. . You're too kind.
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