Am I Ready to Start Investing??

24 Replies

Hi BP!!!

I've been on BP for a little over a month now, and in that time I've read countless forums, listened to a bunch of podcasts, and read a few of the recommended books. I feel like a have a decent grasp of RE, but I can't help to question if I'm ready yet. 

Here's the situation. I'm 26, have a full time job, credit score close to 700, and about 20k in savings. I have paid all of my credit cards down to about 15% of their limits, put away a 4 month emergency fund and paid my car insurance off for the year. I have a car loan and student loans...that is my only debt (except the 15% of my credit cards).

I want to fix and flip 30 homes over the next 3 years, and use that capital to buy and hold at least 10 properties (in the same 3 years). And repeat that strategy until I have enough cash flow coming in per month to replace my salary (I'm hoping I can do it in 6 years).  I would love to find a mentor in the Atlanta area to partner with on my first few deals, so that I can learn more...but I have also heard so many horror stories about mentors who charge a few thousand (which is way less than the guru's but still a lot of money) and then they magically disappear.

Does anyone have advice on finding a good mentor in Atlanta to partner with? Or any advice as to whether or not I even need a mentor with all that I mentioned above? I can feel the "analysis paralysis" coming on and I'm trying to just get started before investing becomes "something that I thought I wanted to do once". Help! I will take any advice you guys have to offer!

Tye

been asking myself the same question though at some point you have to make that judgement call. Capital reserves are huge and not having high interest rate debt is huge.

One way I think about things is in terms of opportunity cost. Is the rate of return I'm receiving on my investments (REI equities/bonds/etc) greater than the interest rate on my debt?

Might be more of a personal finance perspective but once you have a solid financial position to start from pulling the trigger on your first property will hopefully be that much less risky.

Also start analyzing potential properties as if you might buy them, join your local REIA and continue to educate yourself.

Podcast #37 with Aaron Mazarillo was really insightful; learning from project manager perspective by flipping. 

You're further ahead then where I was when I started. You'll never have that "I'm ready" feeling, you'll just have the "I wonder if I can stumble through this" feeling, and that's all that's needed.

Finding a mentor is simply networking endlessly until you make friends who have more real estate knowledge than you, then they will teach you stuff.

Good idea @Chris Khouri . The interest rate on my car and student loans is about 7% (average), which I'm sure I can make way more than 7% on a flip (well....if I don't then I must've done something wrong in my analysis, lol). I completely agree with you though. I haven't used the deal analysis tool yet on an actual property that I would be interested in. I've done the "rule of thumb" calculations on a bunch of them, but not the full blown analysis. I will definitely add that to my "to do list" for the week. Thanks for the advice.

Thanks @Alexander Felice ! You might be right....kind of like having a baby I guess. Never really ready, but you just roll with it when it happens and figure it out along the way!

I have been networking, but am having a hard time finding people doing flips in my area. I have spoken with a few developers, a few real estate agents, and a few people that have alot of rentals. But not so many that are actually still flipping. Not sure where they are hiding, lol!

@Tye Brooks network at your local REIA & meetup meetings. Take some rehabbers to lunch to pick their brain. I'm sure you'll be able to find a mentor, someone who is actually doing deals and not selling you on the idea of doing deals.

hi I'm Mitch. I'm here in Atlanta as well just starting out. Everything you mentioned states that your a pretty responsible person and off to a good start. I know a few people I know well who fix and flip! I have no problem introducing you to them. I myself am not starting out flipping. I'm leaning more towards 'house hacking'. Let me know.

Originally posted by @Chris Khouri :

been asking myself the same question though at some point you have to make that judgement call. Capital reserves are huge and not having high interest rate debt is huge.

One way I think about things is in terms of opportunity cost. Is the rate of return I'm receiving on my investments (REI equities/bonds/etc) greater than the interest rate on my debt?

Might be more of a personal finance perspective but once you have a solid financial position to start from pulling the trigger on your first property will hopefully be that much less risky.

Also start analyzing potential properties as if you might buy them, join your local REIA and continue to educate yourself.

Podcast #37 with Aaron Mazarillo was really insightful; learning from project manager perspective by flipping. 

 Hello and welcome!  Deversification means a lot.  There are a lot of options in real estate.  One of the best is to Fix and Flip.  The higher priced home and the more value you can is usually a good investment.  Location is one of the most important factors.  The more education you have the less likely you will make so many mistakes.  Know the Market very well and always do the numbers for real.  Make smart decisions with your brain and not your heart.  Finding you Mentor and your Team is real important for most people.  If you need to get a loan and the owner won't be one start talking to some local banks as soon ads you know what at you want.  I have a bunch more I could tell you but this is kind of getting pretty long.  Good luck to you!

@Tye Brooks Welcome to BP and the world of real estate.  It's an awesome place.  I analyze thousands of deals a year and yes, you will get paralysis, if you don't ever take action.  Here's my free advice; don't pay anyone, mentor or guru, nor the gazillion types of software junk out there.  Partner with someone who has skin in the game and do the deal together.   That's the only way you will learn and grow.  

It seems like paying off your credit cards first might make sense, unless you have an extraordinarily low interest rate.

If you're paying something around 10% interest on your credit card, you can get an instant 10% return on your money by just paying it off, and that's a 10% return with 0 risk. 

@Chris Missling I'd love to partner with someone....the only issue is finding someone to partner with that I can trust. There are plenty investors around here, it's just tough to weed out all the one hit wonders from those that are successful and as serious about this business as I am. If you have any suggestions on finding great investors to partner with I'm all ears!

I tried doing the "meet" function on BP....but soooooooo many people come up in my area. It would take forever to look at all the profiles, then look at their individual websites (if they have one) then try to assess if they are legit. Any advice?

@Tye Brooks Have a meet and greet and before you execute a deal, ask to see their previous deals from start to finish and what they made. Anyone can create a flashy website and gimmicks to trick people but you can't fake HUD's and statements.

@Tye Brooks i would suggest networking at your local REIA meetings to hopefully find a mentor or partner for your first deal. I would also suggest finding a real estate agent who has experiencing in investing, they may be helpful as well.

@Tye Brooks

Everyone that posted has given some awesome suggestions for connecting with people in your area. If you haven't already, I would recommend listening to the BP Podcast #142: 22 1/2 actionable tips for beginners. I think the advice in there will really give you some ideas on how to take the leap.

Best of luck!