Investor · Pittsburgh, PA · Member since 2017 · 33 posts · 21 votes
So, I really want to get involved in real estate investing, preferably buy and holds, but I love my job. What are some things I can do to, at minimum, start getting my foot in the door? I just graduated college this past May an an engineer, so I don't have a whole lot of extra cash to buy a house yet... What are some ideas? Through the BiggerPockets podcasts, I've heard about seller financing, and financing houses with other peoples money, but I feel like that'd be a little difficult as I have no track record. So please, if you have anything to add, I'd love to hear it, even if you told me to just save 800 bucks a month or something until I had about 10 grand for a down payment.
@Aaron Ray Well done getting started this early. I am also an engineer but did not get started for 7 years out of college. To answer your questions, I think the top 3 things you need to do are as follows.
1. Get educated. Read all you can about the type of real estate investing you want to do. Learn the rental market in your area. For 6 months I looked online at rentals that came on the market and put them in a spreadsheet so I could reference their location, size, and cost later when I wanted to see how much a house would rent for.
2. Build a network. Find a local real estate investment group and attend regularly. Build relationships with the people that are doing what you want to do and build relationships with wholesalers. Wholesalers never have enough buyers so make sure you are specific as to what you want to buy and let them know that.
3. Get your financing in place ahead of time. Talk to banks and get pre approved so your wholesaler will know you are serious.
4. Just do it. Don't get caught in analysis paralysis. Do your research, set a educated minimum requirement for a deal and when that first one comes along buy it and be ready to learn more.
Let me know if you have any other questions and I will be more than willing to help. Also I will shamelessly plug my recent post about what I have done in my first 8 months here as there are other tips in that and hopefully it will help encourage you to get started.
My very first property was a first time buyers property for people who made 60K or less a year. I got a brand new construction property subsidized by the city for allowing the developer to increase building capacity per zoning restrictions. Most of these programs like the DC Inclusionary Zoning program will allow you to get a property for less than what it will cost to rent in the same area. If you're just out of school this may be an option you.
You mentioned your girlfriend may not be onboard with house hacking so this is a better option to look into.
Aaron Ray I'm a fellow UMD grad too. Go terps!
Kudos to you for getting started so early in REI. At your age this was one of the last things I thought I would get involved in but it's def worth it! And fun!
Saving is a must as everyone has pointed out. Another thing I would suggest is figure out what area you'd like to invest in. I've had a lot of luck with investing in Montgomery and PG county(1 property is in CP which is cash flowing pretty well). House hacking is a great option but Maryland and D.C. Metro area does not have a lot of duplexs so you would either have to rent rooms out or find a place that is more separated out (maybe a walk out basement you could rent to someone).
You're on the right track by posting and being involved with this site. Please let me know if there is anything I can do to help or if you just like to bounce ideas off of.
TJ
@Aaron Ray I wish I started sooner and followed through on ideas of actually taking action and getting in the REI game. Now I'm 34 and about to turn my first home into my first rental. Some things that I think will help you get in sooner are:
1) Create a monthly budget and stick to it. Track it at the end of every month to see how you did.
2) Pay yourself first. Pick a number, could be $100 or $1000/month or anything else but create an auto payment on the same day you get paid from your job from your checking account to a specific savings account ( I use Ally bank for example and have 3 savings accounts for different goals). This way you make sure that you will reach your down payment goal by a specified date.
I am definitely not the most experienced person when it comes to investing, but I thought I'd tell you about how I was able to get into investing while still in college:
I've known for a while that I wanted to get into real estate investing. I was very lucky to have a parent involved in real estate that was able to show me how lucrative it can be and supported my goal to be an investor. I bought and sold electronics on eBay all through high school and my first two years of college. I was able to put aside enough cash to purchase a foreclosure with an investor/realtor as a junior in college.
I considered trying to get a loan to buy a property, but due to the fact I was self employed, I had no work history, so my only option was to save cash. I'm glad it worked out this way because I get to invest under someone who has been doing this for a living and I also did not have to have cash to purchase the entire property.
It might be good for you to find someone who you can work under as it is quite a lot of work and a lot to decide on when purchasing a property. It would allow you to invest while also have the safety net of someone who is experienced.
Sounds like some good
Plans and inspirational stuff
I just wish we had homes anywhere near 55,000 here on LI. In my area for a decent size foreclosure home it is an average of $200k +
it's so hard to come come up with the extra money for that.
@Michael Swan Congratulations! That is awesome, hearing things like that is what really motivates me to keep learning and hopefully get started soon.
I will definitely listen to the podcast when it comes out! I'll also follow you here on BP and hopefully chat in the near future if there's something I need more clarification on.
@Micah Cook Thank you, that response actually is helpful. It's got me thinking now... working with someone would be a good idea, especially if we even just go 50/50 on a deal or something. That way too, there is not obligation on future deals.
Learn your market, go to networking events, learn your market, save more money, learn your market, learn TO market, learn you market, complete the 50 house rule.
I agree with @Steve Bracero, @Scott Trench's Set For Life is a great way to start out and understand mindset. I would highly recommend house hacking if you don't have a lot of capital. I graduated December 2015, work now as a software engineer, and have done one deal, so I'm by no means an expert, but I will tell you how I got started if it helps!
Read, read, read, listen to all the BP podcasts, and repeat. I strongly recommend What Every Real Estate Investor Needs to Know About Cash Flow, it really helped me to speak the 'lingo' and understand more from all the fantastic sources that you have access to here on BP.
If you don't have a lot of capital and aren't going to house hack, try to partner up with someone, for me I learned as much as possible and eventually got my father to go in on a deal with me, perhaps gaining knowledge and discussing with family the possibilities and what it could do for them may be an option.
Everything everyone said above too, I have new things I need to try after reading these posts!
Hey @Aaron Ray, as @Brandon Turner always says, you have an unfair advantage. Everyone does and everyone's is different. Find yours and exploit it to gain an advantage. Mine was that I had parents who were sick of stock market returns and I offered them a better option. My wife and I bought a house-hack with that money and now its cash flowing like crazy for us. Now was it unfair that I had parents who had some money lying around to help me get started? Absolutely, but I used that and have now flipped houses with that same money and made them quite a bit of return.
I am now using those first successful flips as a portfolio when i'm approaching other lenders. Once you have your foot in the door, things get easier but you have to take action.
Find your unfair advantage and run with it! Oh, and my wife and I have done all of that with me having a full time job and her raising our two toddlers.
here's six Ive found spread your money across multiple accounts until you save enough to use for your self. Also will look up the Solar Card system it allows renters and everyone to invest in Solar roof top systems at $25 increments like a gift card and then lend in a micro finance system until you have your own roof to use it on. http://www.crowd101.com/wp-content/uploads/2016/12/real-estate-crowdfunding-sites.png
Currently, I do not own any properties, but I set a deadline to have one before I move out of my apartment in Feb-18. That being said, by far the most motivating thing I have done thus far has been purchasing/reading Set For Life by Scott Trench. Why you may ask?
1. The author often refers to and uses all of his advice to adhere to Average Joe. Average Joe is the new investor with a median job (salary of 50k per year) with no debt, which was perfectly applicable to me. With you being an engineer, the book likely applies to you and you likely can expedite a lot of advice given here, especially if you make more than the median salary.
Side note: If you do have debt, first and foremost, pay that off before making any other sort of investment. You will thank you self in the long run and will be a lot less stressed.
2. Scott uses a ton of real life, applicable, examples in each chapter that give you an idea of what he is adhering to in each piece of advice writes about. For "visual learners", persay, it is very helpful.
3. It gives a great financial run way tips once you hit certain amounts of wealth, so it breaks out like so:
-$1 to $25,000 in wealth
-$25,000 to $100,000 in wealth
-$100,000 to financial freedom
Each part above has several chapters accompanied with it to go into further depth.
Next step is listening to podcast and while doing it, write down or remember terms you dont know. Google them when you can, take notes. Also, I am a big reader (now hah, never was in college), and I recommend purchasing some books to further educate yourself. I just purchased $100 worth of material that I cannot wait to dive into when they arrive.
Lastly, network. Pretty self explanatory. Find people in your area. Biggest tip with that is to try and provide some value back to that person that helps you. Offer to help them clean one of their units, do light maintenance work, show some of their houses, etc. Just make them want to "invest" their time into you.