Real Estate Mentors

19 Replies

I'm from New Jersey, and I'm very new to real estate investing. I have about $1,300 saved up (I know it's chump change.) But I had a question....I really don't want to wait until I have more money to jump into real estate, so is there any way that I could start currently with the money that i have? I'm particularly interested in flipping houses. 

Another question: What do you guys think of mentors? And if you like them..Where the heck do you actually find them? I was gonna sign up for this thing called Freedom Mentors but I opted against it..

Thanks a lot!

Jon

@Jonathan Fischer

Having a mentor can be a good thing.  Some of them charge a fee for their service.  With your funds you might not have enough if that was the case.  

You can surely start out flipping or wholesaling.  Listen to this podcast or youtube video I did showing you simple steps you can take to get started with a low budget.  Educational info only. 

Good luck

Medium buymemphisnow stacksCurt Davis, Buy Memphis Now | [email protected] | 605‑310‑7929 | http://www.BuyMemphisNow.com | TN Agent # 00321765

Bill Gates has mentors, Warren Buffet has mentors, Steve Jobs had mentors. If they needed mentors, that tells me that everyone needs them to be successful. Having said that, you don't necessarily need to be in a formal relationship with them (or even call them your "Mentor"), but you do need to have them.

I currently have two mentors. Casey Eberhart (he isn't on here) is my mentor for monetizing my network and proper networking. He's amazing. You can find him all over the internet and he started his career as a flipper. My other mentor is a "life coach" to use an overused term. She's amazing and has helped my business more than I thought. I've had mentors in real estate (and will again soon), who truly helped me a lot through the rough times. I just wrote a blog for MOR Financial on mentors (which should be up in a few days) explaining what you get out of mentors...they are truly essential to success.

There are many people on BP who you can seek out their advice and wisdom...while not a "mentor" in the formal sense, they can still help and mentor your through your startup in this business.

Thanks so much guys! I appreciate the info. I see you said flipping or wholesaling..Would you guys recommended flipping first instead of wholesaling or vice versa? I heard buying a house cheap and then selling it to a contractor - investor - buyer is a really good plan also. 

Also, I don't have a credit card...Thus, I don't have any credit yet, just to throw that out there.

Originally posted by @Mark Mynhier :

Bill Gates has mentors, Warren Buffet has mentors, Steve Jobs had mentors. If they needed mentors, that tells me that everyone needs them to be successful. Having said that, you don't necessarily need to be in a formal relationship with them (or even call them your "Mentor"), but you do need to have them.

I currently have two mentors. Casey Eberhart (he isn't on here) is my mentor for monetizing my network and proper networking. He's amazing. You can find him all over the internet and he started his career as a flipper. My other mentor is a "life coach" to use an overused term. She's amazing and has helped my business more than I thought. I've had mentors in real estate (and will again soon), who truly helped me a lot through the rough times. I just wrote a blog for MOR Financial on mentors (which should be up in a few days) explaining what you get out of mentors...they are truly essential to success.

There are many people on BP who you can seek out their advice and wisdom...while not a "mentor" in the formal sense, they can still help and mentor your through your startup in this business.

 Mark - Great post, you really got me thinking,  we have a good size network we need to start monetizing, Thanks!!

Michael Rae

@JonathanFischer

Great meeting another investor in NJ. I would start with the all that Bigger Pockets got to offer. As well as asking lots of questions on different forums. I would add check out some of the local REI groups. There are a few by you. Great networking also have some great information.

This is in Garwood. this one usually has an education part and networking.  If your interested in going it is next week. 

http://www.meetup.com/network20/

this is a networking one in New Brunswick 

http://www.meetup.com/New-Jersey-Real-Estate-Inves...

Good luck. 

David Semer, Semer Properties LLC | http://www.facebook.com/SemerPropertiesLLC

Hey David! Nice to meet you, likewise. Oh I didn't even know about those. Great thanks a lot! I should go and check those out.

hey @Jonathan Fischer  ! I am/ was in a similar boat. (no money no experience yatta yatta) I would caution against working with a "professional mentor" that you don't know well. In my experience pretty much everyone can only give advice from their own perspective, and most people will try to get one over on newbies like us. So everything should be taken with a grain of salt (including my opinion!) your the only one who can truly watch your interests

MY Story: Last year, I felt I NEEDED to get into real estate. I didn't care that I had only had a grand or two. I just wanted to make it happen. We without a silver spoon in mouth, must be creative....

Plan: Because I had no/ very little money I needed strategy that has a low barrier of entry. Also I needed to be able to afford the place after the dust settles.... Answer = FHA Loan to hold a multifamily. (out of pocket cost is roughly 3.5% down + 3 month reserve + closing costs)

Creative step 1: I took out a title loan/ refi on my nearly paid off 2006 civic. My credit union wrote me check for 5k. (This was at 5k at 2.99% for 3 years I believe)

Creative step 2: I took out a few cash advances from my credit cards. (I was still able to keep my credit ratios in the green)

Now this is where it gets somewhat unique: After vetting potential multi families I pitched my strategy to my family. Saying I had roughly 10k and I was ready close, but needed "some" additional funds. I was able to secure another 8k from my parents. (4k each. they are not together and their finances are separate)

I closed on a Chicago 2unit w/ basement inlaw in Feb 2014. I'm not going to say it was easy, or that this was the best option available. but I did it! 

A few thoughts:

1) Anyone and everyone can be a "mentor". I've gotten help from all over; a coworker of mine that is a retired RE agent from the 90's. Family, friends, friends of family.... people on bigger pockets etc. Maybe Im wrong but, I feel like the "professional" mentors will sell you snake oil. I mean if they really have a great system that makes serious $, why not just use that system instead of selling it for profit full time??

2) Not having money is a problem. but not a HUGE problem I am learning. It's more about who you know. Honestly talk to older people (like friends of the family)... Older folks have had a lifetime to make strong connections in the community. We are young and don't have connections. Make some connections with lenders. (I just talked to my dads longtime lender this week. I found out he is a portfolio lender, and because of the great business my dad has given him over the past 30+ years he is more than happy to help me!)

3) Remember numbers on paper do not always reflect reality. Make sure to always carefully consider all possibilities and risks. IF something can go wrong it probably will, so plan accordingly. I have been lucky in that I have been able to stay afloat, but some months is tough. I've already gone trough an eviction and my current tenants are behind on rent :( (naughty PM Company!!!)

@Triston Murray  

Great post! I will be heading down that path very soon. I've been prequalified for a 203k loan and im going out this weekend with my agent to look at some multi families! congrats on getting it all put together. 

@Kyle Gregg , Congrats! Be conservative and make sure the numbers make sense and you'll be ok! What I left out in my posting is that, if I could have done things differently on my first purchase...(Not really regret but...) I probably would have sought out cheaper SFR's in more rural working class hoods. In the midwest, buy, rehab, rent deals can be had for 30k all in and rented for 500-800, for roughly $300/mo in NET cashflow. I would have to get creative and arrange non owner occupied financing BUT to have similar cashflow with a fifth of the debt is appealing. (At the time of my first purchase, due to start up capital, income, credit etc I was under the incorrect impression I could never get more creative with financing and just went with FHA. Remember it's about who you know!!!)

Using FHA203 can be a very strong investment especially if you buy right and force appreciation through quality rehab work... SO totally not trying to change your mind on strategy, but IMHO it's definitely worth calling around to see if more favorable options are available. (it can't hurt you). The only reason I didn't explore more options was because I doubted myself and thought creative deals would forever be out of reach. When all I had to do was ask around! Open mouths don't get fed, and you'd often be surprised at who you know and what they can do for you.

Let us know how your first steps into RE go!

@Triston Murray  as a first investment that's owner occupied, i think the 203K loan is a perfect vehicle to get me started. Wrapping the purchase of the house and the renovations into a single loan with 3.5% down at 5%...i don't see how i could get a better deal with an owner occupied mulit unit property! If i want to keep living here when i purchase a second property, ill have to figure out some creative financing. 

@Kyle Gregg  Like I said i'm not knocking that strategy AT ALL, heck I did it! And I'll probably do it again in addition to other methods to be honest! IT PROBABLY IS PERFECT FOR YOUR SITUATION...I'm just saying in the grand scheme of thing there MAY be a better option. that's a BIG maybe. I don't know you or your investment strategy. But it's a small world filled with many BIG opportunities, this is just a personal revelation I am having and wanted to share with someone who is also new.

For example, that private banker I mentioned in my post, says that simply based on the past relationship between himself and my father he feels confident that he can do 100% (nothing out of pocket) of acquisition + rehab cost of pretty much any investment deal I bring to his table. I would need my dad to guarantee the loan.

Now what if I had talked to this same banker before I purchased my place? Would I have opted for the FHA?... hmmmmm... maybe, maybe not.

My point was less about your strategy and more about my falsely feeling that my options were limited when I starting out. I felt so overwhelmed I was afraid to reach out to people. And all it took was 2 minutes to get the phone number of the guy who can offer 1 more option I can utilize at some point in my RE career. For all you know, your cousins girlfriends dad is the senior underwriter at some private bank that's just aching to lend! Its a small world. 

Sorry if I came off like I was critical of your investment strategy. That's not the case at all!

@Triston Murray  

You are completely correct. I was also overwhelmed with what i should do. Combined with being hesitant with reaching out to new people in fear of my lack of knowledge making me look stupid. Breaking that barrier is a must in this industry...i agree, relationships are key.

I had no idea which lender i wanted to reach out to, knowing it had to be a lender that was experienced with the 203k and had connections to contractors. Then out of the blue, a distant friend posted on facebook that she landed a new job at a brokerage as a loan officer...i reached out and found that she loves 203k loans and has plenty of contractors at her disposal. She got me pre qualified and now i am out looking for houses. Without her posting about her new job, i would still be sitting here twiddling my thumbs!

@Triston Murray  what a great story/experience you posted and kudos to you for your determination, creativeness and thinking outside the box.

Your Network, Support System and self conviction is sometimes more important than your today's resources (money).

What an enlightening post :)

Originally posted by @Curt Davis:
Having a mentor can be a good thing.  Some of them charge a fee for their service. 

My personal definition of mentor is someone who doesn't charge a fee -- they do it because they have a vested interest in seeing you succeed (for whatever reason).  They also don't generally hold your hand teaching you step-by-step; instead, they are there to help guide you, redirect you, get you to think about your decisions and provide support along the way.  With a mentor, the ball is in your court whether you're successful or not.

Someone who charges is -- in my book -- a coach.  A coach is typically going to be more hands-on, teach you the tactical aspects of the business and hold your hand through transactions.  Coaches make their money by taking some of the responsibilities for your success.

I'm not saying that one is better than the other, but they are definitely difference.  They typically have different motivations and provide different value.  In fact, depending on what you're trying to accomplish, it may be worthwhile to have both.

I've had business mentors my whole life and have had coaches in non-business endeavors -- when selected wisely, they will make all the difference.

The way J Scott describes a mentor is traditionally how I think of a mentor (too lazy to actually look up the definition).  However here on BP the term does seem to extend to paid coaches. 

Medium crab1 copyNed Carey, Crab Properties LLC | http://baltimorerealestateinvestingblog.com/

Originally posted by @Jonathan Fischer :

I'm from New Jersey, and I'm very new to real estate investing. I have about $1,300 saved up (I know it's chump change.) But I had a question....I really don't want to wait until I have more money to jump into real estate, so is there any way that I could start currently with the money that i have? I'm particularly interested in flipping houses. 


Hi Jonathan, as I am pursuing my first property with "chump change", I just recently found that the best solution would be to find an FHA insured mortgage lender. I knew that the down payment would be as low as 5% with the interest as low as 3.5%, but I did not know that some can approve you with as little as a 550 credit score. Unfortunately, I found this info a little too late, as I am looking to close in about 2.5 weeks and the FHA loan process takes about 4weeks.

Alternatively, I am going to use this hard money lender I found here on BP: DoHardMoney.com. they have a program in which they will give 100% funding AND pay closing costs and fees. You also don't pay anything for the first 5 months! You will pay $1600 to become a member and have access to the 100% funding. I think it is a pretty good deal. I have yet to start the process though. I am scheduled to make the $1600 payment next Friday and I'm going to see what happens from there!

If you don't want to go through the lengthy FHA process, check them out and see if you like what they are talking about. *Let Julian know ShaRa Carlton sent you : )

Love this thread! Great getting-started story, great strategy ideas. I also agree about the mentor/coach distinction. 

I, too, got started with an FHA loan on a multifamily property (triplex). FHA has its drawbacks but I wouldn't have done it any differently. Next time around, I want to try the 203k route!

Keep up all the good work.

You can often find a good mentor for free in your local market. REI meetings are good places. If you offer your mentor something in return, they may be more likely to work with you. In my case, I buy his deals, which are great for me :) and he makes money. I also help him with writing/marketing for other investors.

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