Taking that first step!

6 Replies

For the past 2 years I have been growing my knowledge on real estate investing through BiggerPockets forums, books, and articles. In addition, for almost a year I have been working as a residential construction manager which has significantly stretched my knowledge on dealing with contractors, scheduling projects, managing job sites, and learning every step there is in new construction. 2 years ago (when I was 21) I made the decision that I wanted to develop a future in real estate, and every step since then has been building towards that goal. Now I am 23, I got a degree in Construction management and business, and I believe I am ready to dive into the crazy, exciting world of real estate investing! 

Now, I have Saved close to $10,000 while working these past 5 months, but now I feel I have developed analysis paralysis. The niche I believe is best suited towards my goals is fix and flip (most likely with a equity partner) while acquiring rental units for long term financial independence. My goal is by the time I am 30, I hope to have 50 rental units with a passive income over $300-400 a month, and by 26 (3 more years) have developed an investment team that is flipping or investing in 15-20 properties annually. 

My question for you all is: If you were in my shoes, what would be the first step you would take going from analysis paralysis to jumping into that first deal? I know what I want for my financial future and I have a path I believe will help get me there, I am just having trouble finding the courage to take that first leap. I hope to find an equity partner and have my first renovated/flipped property done by the end of the year. 

Thanks in advance for your feedback! 

Depends on what you want to do first? I usually tell people to buy themselves a primary home first. While a primary isn't a great investment, it is still better than renting, and it gets you through the traditional buying process. 

You can buy a multifamily as your first as well to create some income.

If that's an option for you then just need to get a preapproval letter, find an agent, and start looking at properties. 

If you want to flip your first home then you need to find find some capital. Put together some sample deals, a prospectus, and start shaking hands until you find some cash.

Have you actively researched, found and evaluated properties? Or are you struggling with taking the first step to try and locate some potential properties?

If it's the latter, I suggest contacting a local agent and just letting them know you're an investor looking to buy your first property. Give them some criteria, price points, etc. I did this early on and the agent I first contacted brought me a few deals a month. If nothing else, it gives you properties to practice doing walk-thrus and analyzing. Driving for dollars is another easy way to find some properties on your own, there's plenty of resources on BP for this.

If its the former, maybe you should choose a property you can get for cheap that may have minimal cash flow just to get that first one done. With a background in construction you can add some value and increase that cash flow. A great option is always a duplex and live in one side (house hacking), also plenty of info here on that.

One question I have: You want 50 properties and passive income of $300-400/month? Are you only planning on $6-8 of cash flow per property?

Taking the first step is the hardest, good luck!

@Alexander Felice Yes, within the next month I hope to have 2 sample deals put together to show potential equity partners. Thanks for the advice! 

@Justin Whitfield My mistake. With 50 rental units EACH netting $300-$400 a month after expenses and mortgage, we hope to have a passive income of $15,000-$20,000 a month to fuel our business and allow us to focus on growth. And yes, I hope that with a background in construction and sound knowledge of rehab budgets, understanding of renovation and Houston's current market, I will be able to find a partner to fuel my first few projects. Thanks for the feedback! 

Originally posted by @Justin Whitfield :

Have you actively researched, found and evaluated properties? Or are you struggling with taking the first step to try and locate some potential properties?

If it's the latter, I suggest contacting a local agent and just letting them know you're an investor looking to buy your first property. Give them some criteria, price points, etc. I did this early on and the agent I first contacted brought me a few deals a month. If nothing else, it gives you properties to practice doing walk-thrus and analyzing. Driving for dollars is another easy way to find some properties on your own, there's plenty of resources on BP for this.

If its the former, maybe you should choose a property you can get for cheap that may have minimal cash flow just to get that first one done. With a background in construction you can add some value and increase that cash flow. A great option is always a duplex and live in one side (house hacking), also plenty of info here on that.

One question I have: You want 50 properties and passive income of $300-400/month? Are you only planning on $6-8 of cash flow per property?

Taking the first step is the hardest, good luck!

 I think (HOPE!) he meant 3000-4000 per month. Which would be a very conservative $80/door. 

@Alexander Felice Yes, I meant that after expenses on each unit I could net $300-$400 a month. Meaning my 50 investments together would net $15,000-$20,000 per month. Sorry for the confusion. 

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