Newbie in the REI world. Any ideas on how to start?
Real Estate Investor · Vancouver, British Columbia · Member since 2016 · 2 posts · 1 vote
Newbie in the REI world. Any ideas on how to start?
Most Popular Reply
Don KonipolBusiness Member
Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votesOriginally posted by @Teddy Hoang:
Hi guys thanks for the replies.
@Pawan J. for someone like me who has no capital, how would you suggest structuring deals where both myself and my investor can benefit?
Is it easier to get private money lending vs a JV partnership?
No capital and no experience and no expertise. OK let's be realistic. Why would anybody invest their money with someone like that? With no experience or expertise, how are you going to qualify deals, evaluate risk, recognize problems and opportunities, or move fast enough to beat out the competition even if you do?
People become interested in real estate investing, watch a late night infomercial, come across a few websites, hear tales of success, and are ready to jump in head first. So after 38 years as a real estate broker, investor, syndicator and private lender, here are my observations.....and suggestions.
1. Most investors/flippers find the outcome of their first deal disappointing, either losing money outright or putting in lots of time for little or no profit. As would be expected in any endeavor until they gain experience and knowledge.
2. Almost all buyers of "mentor or guru programs" are shocked at the time and effort it takes to find a "deal", the difficulty of obtaining financing, the amount of their own capital they are expected to invest, the frustration of dealing with contractors and how unprepared for the real world of real estate their mentorship has rendered them.
3. Most new " investors" disappear from the real estate scene within 3 months of starting out. And the less capital one starts with the quicker the disappearance.
4. Most new real estate flippers/wholesalers/rehabbers find out fairly quickly that they will not be able to earn a living in the real estate field.
So, here are my suggestions
1. Obtain a real estate license and get a job related to some aspect of real estate....brokerage, finance, investment, appraisal
2. Take a hard look at yourself and decide if entrpernueral real estate endeavors are right for you, or perhaps your niche is as a service provider.
3. Get educated in real estate through real educators, not Rich Dad, not Trump University, not Carlton Sheets. Courses offered by colleges, by CCIM, by NAR, by MBA, by ULI, by AI.
4. Stop believing anything the gurus of real estate say.
5. Decide if you are a real estate INVESTOR, or are in the BUSINESS of real estate
6. Decide on a participation in line with your available time, income needs and available capital. REALISTICALLY
7. Attend networking events to make contacts and further your education
8. If you lack knowledge or understanding of personal finance and wealth management, rectify this deficiency
9. DO NOT put someone else's money at risk if that person does not have the expertise and experience to evaluate the deal, until you have sufficient knowledge and experience to be a fiduciary of that money.
Good luck!
5 Replies
- Specialist · Rockland, MA · Member since 2010 · 7k+ posts · 2k+ votes10y
Welcome. Fill in 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 100 past ones to catch up on.
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 rehabbers (cash buyers). You can Google to locate them and go to meetup.com Here you caan build your team from those you meet and get referrals.
Two Great reads, I bought both J. Scott The Book on Flipping Houses, The Book on Estimating ReHab Costs http://www.biggerpockets.com/flippingbook
Download BP’s newest book here some good due diligence in Chapter 10. Real Estate Rewind Starting over
Good Luck
Paul
@Teddy Hoang Vancouver is a great market for real estate when it comes to generating a high ROI through flips and new construction. Our JV partners and I have had great returns on every deal and we have been in this market for several years. Its a high buy in but high ROI also. Hence you dont need to flip 30 homes a year to make a decent $
Long term buy and hold is not so great here. Other parts of the province of BC are different.
- Real Estate Investor · Vancouver, British Columbia · Member since 2016 · 2 posts · 1 vote10y
Hi guys thanks for the replies.
@Pawan J. for someone like me who has no capital, how would you suggest structuring deals where both myself and my investor can benefit?
Is it easier to get private money lending vs a JV partnership?
Maybe instead of capital you have money tied up in a HELOC you could use to get started?
JV partnerships and private money deals can come in all shapes and sizes and as I was just telling a newbie tonight most private money lenders (that are not family or friends) likely want to see a track record or an actual deal (Hard in this market as no subject deals happen so quickly you need to have financing lined up first). JV deals or private money with family or friends (your investor) may be your best bet to get started once you can analyze a deal properly.
Message me and we can chat more.
As for how to structure the deal this depends on various factors of each party relating to effort vs. capital outlay and risk etc. %profit split, PM fee, finders fee + %of profit etc
- 10yDon KonipolBusiness MemberInvestor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
Originally posted by @Teddy Hoang:
Hi guys thanks for the replies.
@Pawan J. for someone like me who has no capital, how would you suggest structuring deals where both myself and my investor can benefit?
Is it easier to get private money lending vs a JV partnership?
No capital and no experience and no expertise. OK let's be realistic. Why would anybody invest their money with someone like that? With no experience or expertise, how are you going to qualify deals, evaluate risk, recognize problems and opportunities, or move fast enough to beat out the competition even if you do?
People become interested in real estate investing, watch a late night infomercial, come across a few websites, hear tales of success, and are ready to jump in head first. So after 38 years as a real estate broker, investor, syndicator and private lender, here are my observations.....and suggestions.
1. Most investors/flippers find the outcome of their first deal disappointing, either losing money outright or putting in lots of time for little or no profit. As would be expected in any endeavor until they gain experience and knowledge.
2. Almost all buyers of "mentor or guru programs" are shocked at the time and effort it takes to find a "deal", the difficulty of obtaining financing, the amount of their own capital they are expected to invest, the frustration of dealing with contractors and how unprepared for the real world of real estate their mentorship has rendered them.
3. Most new " investors" disappear from the real estate scene within 3 months of starting out. And the less capital one starts with the quicker the disappearance.
4. Most new real estate flippers/wholesalers/rehabbers find out fairly quickly that they will not be able to earn a living in the real estate field.
So, here are my suggestions
1. Obtain a real estate license and get a job related to some aspect of real estate....brokerage, finance, investment, appraisal
2. Take a hard look at yourself and decide if entrpernueral real estate endeavors are right for you, or perhaps your niche is as a service provider.
3. Get educated in real estate through real educators, not Rich Dad, not Trump University, not Carlton Sheets. Courses offered by colleges, by CCIM, by NAR, by MBA, by ULI, by AI.
4. Stop believing anything the gurus of real estate say.
5. Decide if you are a real estate INVESTOR, or are in the BUSINESS of real estate
6. Decide on a participation in line with your available time, income needs and available capital. REALISTICALLY
7. Attend networking events to make contacts and further your education
8. If you lack knowledge or understanding of personal finance and wealth management, rectify this deficiency
9. DO NOT put someone else's money at risk if that person does not have the expertise and experience to evaluate the deal, until you have sufficient knowledge and experience to be a fiduciary of that money.
Good luck!
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