Which investment strategy for my current situation??

23 Replies

Hello!

I'm currently a newbie to real estate investing world and am still considering various strategies that would be best for me. I am currently 27 years old, no spouse/kids, about $80K in student debt, and just started working as a health professional for about 40-55 hours/week. I currently am not paying any rent since my house is already paid off, but my main goals are to pay off that student debt faster and build wealth as soon as possible.

So in general, most of my income goes to paying off my loans, and the rest goes to personal expenses, and savings for investments. I wanted to hear some thoughts on what strategies would be the most forgiving for someone who doesn't have alot of money right now. 

I've considered wholesaling because I was enticed by the idea of making "quick cash," but as I did some quick reading on it, it does require ALOT of time bird dogging, marketing, and a legal process where I may or may not need a real estate license for (which I don't want to get). 

I've considered buying and holding, but living in california, the down payment for a home is expensive, so I was considering the housing market in other states.

House hacking is something I heard is also good for new investors, but still need to look into that more, since I don't know too much about it.

And fixing and flipping would be something I would do further down the road, but not now.

Someone also suggested buying land property as well, but its also another area that I am not too familiar with

Does anyone share a similar situation as me? Or what to consider when deciding on your investment strategy?

If you have not yet listened to the BP podcast I highly suggest you start there and I guarantee you will gain enough knowledge to be able to make a decision on what strategy best suits your current means and long term goals. Every strategy has to be tailored to your personal needs and capacity for risk.

Congrats on the job! You mentioned you don't have a lot of cash at the moment but I'm curious why you don't use the equity in your current home if you own it? 

It sounds like you have a huge chunk of equity you could use for the down payment without dramatically changing your current lifestyle. A duplex or triplex might even be able to pay for itself and a mortgage on your current home.  

Originally posted by @Nicholas Kangos :

If you have not yet listened to the BP podcast I highly suggest you start there and I guarantee you will gain enough knowledge to be able to make a decision on what strategy best suits your current means and long term goals. Every strategy has to be tailored to your personal needs and capacity for risk.

Yes! thanks for responding back!
I have listened to it, and it did give good general tips for a real estate investor starting out, but I was looking for some thoughts on how some of those who have already walked that path decided on which investment strategy was best. If you have any experience, do share! I would love to hear how you started on your journey and why

Originally posted by @Ian Tvardovskaya :

Congrats on the job! You mentioned you don't have a lot of cash at the moment but I'm curious why you don't use the equity in your current home if you own it? 

It sounds like you have a huge chunk of equity you could use for the down payment without dramatically changing your current lifestyle. A duplex or triplex might even be able to pay for itself and a mortgage on your current home.  

 Hey there Ian,

Thank you for taking time to respond! Well, I currently live with my father and brothers so I can't rent it out until after my dad passes away or my brothers move out. The home isn't under my name, but I am currently living there to save money to pay for my loans.

So you're suggesting I delve a little bit into house hacking? I know that I would qualify for an FHA loan since I'd be considered a first time home-buyer, but that's the extent of my knowledge about that area.

@Rochelle Duong that makes sense! I think before deciding if you should house hack you should consider if you want to move. If living with your family is comforting and you would rather not come home to an empty house every night then I think you should stay and continue to pay off your loans and save. 

At the same time, I think if you've started your career and are ready to move then taking advantage of cheap FHA loans makes sense to help you achieve both your investing and personal goals.

If you don't want to move then I think you should explore finding a partner either in CA or out of state who can go into a deal with you. To me, this would be a better fit if you're looking to make your first investment but not alter your current lifestyle. 

Originally posted by @Ian Tvardovskaya :

@Rochelle Duong that makes sense! I think before deciding if you should house hack you should consider if you want to move. If living with your family is comforting and you would rather not come home to an empty house every night then I think you should stay and continue to pay off your loans and save. 

At the same time, I think if you've started your career and are ready to move then taking advantage of cheap FHA loans makes sense to help you achieve both your investing and personal goals.

If you don't want to move then I think you should explore finding a partner either in CA or out of state who can go into a deal with you. To me, this would be a better fit if you're looking to make your first investment but not alter your current lifestyle. 

 Ah, what a great suggestion! I actually was talking this out with a friend who would be a potential partner and I think that would be the best bet for me so I won't feel like I'm running the race by myself. He suggested buying property out in other states where homes are much cheaper (like Detroit or in Texas), but the downside is that if I don't have a good property manager in those areas (which might be tough for a newbie who is still learning), flying out all the time would be a nightmare.

Thank you so much for your input! :)

My suggestion is to get a real estate license and then use it to gain access to property faster and look for deals. Being a Realtor doesn't carry a ton of credibility by itself, though it carries more than being an investor when you're starting out.

I have always wanted to be in real estate, but I had little cash when I started. Lol, in reality, I had none. I paid for my license and starting fees with a credit card. After my first deal, I paid off that credit card and still had money left over; lol, I was hooked. 

Being a Realtor is a side hustle for me and I help people when I don't have an active property I am working on. Active meaning one that I am flipping. And I do it to get out of the house.

Let me explain. I have learned to network a lot, don't think I am really good at it, yet stuff comes my way because I help people connect the dots. I look at a lot of homes for myself and a few buyers I always seem to find.  

In the course of that activity I find sellers that want to list with me and buyers that need help looking, so I help them and get paid for it. Is it my main focus? No. I have a W-2 job that I keep for insurance and other benes. 

Am I a high producer? No, but I am not in it for income as a job, I am in it to find deals. For many years I did nothing except learning. Once I got my license then I started investing too and it was a lot easier because I had the experience from helping other people.

Something to think about.

@Rochelle Duong Greetings.

I think you should start with a personal assessment. What is your personality? Are you an introvert or an extrovert? Are you "firm" or "soft"? Are you a good or poor money manager? What is your risk tolerance? What are some transferable skills you possess that will help you in real estate? These are just some of the questions you have to ask yourself when deciding on a REI strategy. Keep in mind that each strategy has its pros and cons. You have to decide which cons you don't mind dealing with. Having no housing expense is a great benefit that I suggest taking advantage of. Save as much as you can and be patient with the process. Check out @Scott Trench 's book Set for Life for more insight on creating a financial runway to help you get started.

I wish you the best! Peace!

@Rochelle Duong

Realtor.com came out with their 2018 Forecast for Top 100 Cities for growth and appreciation, rank 1-100. Lots of details, analysis, etc.

https://research.realtor.com/2018-national-housing...

Terry

Top 100 list below.

Top 100 Largest U.S. Metros Ranked by Forecasted 2018 Sales and Price Growth

RankMetro2018 Sales Growth2018 Price Growth
1Las Vegas-Henderson-Paradise, Nev.4.906.90
2Dallas-Fort Worth-Arlington, Texas6.025.57
3Deltona-Daytona Beach-Ormond Beach, Fla.5.476.00
4Stockton-Lodi, Calif.4.556.43
5Lakeland-Winter Haven, Fla.3.007.00
6Salt Lake City, Utah4.624.50
7Charlotte-Concord-Gastonia, N.C.-S.C.5.983.02
8Colorado Springs, Colo3.125.65
9Nashville-Davidson–Murfreesboro–Franklin, Tenn.1.007.67
10Tulsa, Okla.7.541.02
11Seattle-Tacoma-Bellevue, Wash.2.346.21
12Spokane-Spokane Valley, Wash.3.504.97
13Austin-Round Rock, Texas4.044.42
14Miami-Fort Lauderdale-West Palm Beach, Fla.3.105.28
15Little Rock-North Little Rock-Conway, Ark.7.001.37
16Denver-Aurora-Lakewood, Colo.1.756.54
17Orlando-Kissimmee-Sanford, Fla.1.246.88
18Toledo, Ohio5.162.95
19Columbia, S.C.5.073.00
20Palm Bay-Melbourne-Titusville, Fla.1.007.00
21Jacksonville, Fla.4.733.20
22Durham-Chapel Hill, N.C.5.182.62
23Providence-Warwick, R.I.-Mass.3.723.97
24Akron, Ohio5.891.70
25North Port-Sarasota-Bradenton, Fla.3.004.50
26Chattanooga, Tenn.-Ga.3.504.00
27Worcester, Mass.-Conn.3.773.68
28Raleigh, N.C.1.635.77
29Tampa-St. Petersburg-Clearwater, Fla.1.386.00
30Grand Rapids-Wyoming, Mich.2.964.25
31Boise City, Idaho2.005.00
32San Jose-Sunnyvale-Santa Clara, Calif.2.504.37
33Greenville-Anderson-Mauldin, S.C.2.804.00
34Madison, Wis.1.725.05
35Albuquerque, N.M.2.923.71
36Houston-The Woodlands-Sugar Land, Texas2.244.19
37Winston-Salem, N.C.3.003.21
38Riverside-San Bernardino-Ontario, Calif.0.525.66
39Buffalo-Cheektowaga-Niagara Falls, N.Y.1.274.89
40Fresno, Calif.1.294.81
41San Francisco-Oakland-Hayward, Calif.0.945.14
42Detroit-Warren-Dearborn, Mich.1.174.77
43Phoenix-Mesa-Scottsdale, Ariz.3.662.26
44Oxnard-Thousand Oaks-Ventura, Calif.2.293.62
45Augusta-Richmond County, Ga.-S.C.2.503.34
46Tucson, Ariz.3.002.71
47San Diego-Carlsbad, Calif.2.513.19
48Youngstown-Warren-Boardman, Ohio-Pa.3.012.50
49Harrisburg-Carlisle, Pa.2.503.00
50Cleveland-Elyria, Ohio3.002.48
51Birmingham-Hoover, Ala.3.002.42
52McAllen-Edinburg-Mission, Texas2.383.00
53Charleston-North Charleston, S.C.3.641.69
54New York-Newark-Jersey City, N.Y.-N.J.-Pa.1.164.15
55Jackson, Miss.0.005.30
56Virginia Beach-Norfolk-Newport News, Va.-N.C.1.403.82
57Boston-Cambridge-Newton, Mass.-N.H.2.552.64
58Pittsburgh, Pa.3.531.62
59Oklahoma City, Okla.1.493.51
60Portland-South Portland, Maine5.000.00
61Cape Coral-Fort Myers, Fla1.003.99
62El Paso, Texas2.692.24
63Minneapolis-St. Paul-Bloomington, Minn.-Wis.0.00 4.93
64Knoxville, Tenn.2.002.92
65Allentown-Bethlehem-Easton, Pa.-N.J.4.120.57
66Bakersfield, Calif.1.003.61
67Urban Honolulu, Hawaii1.433.11
68Des Moines-West Des Moines, Iowa3.201.19
69Greensboro-High Point, N.C.1.342.97
70Springfield, Mass.1.243.00
71New Orleans-Metairie, La.2.002.24
72Cincinnati, Ohio-Ky.-Ind.1.472.32
73Wichita, Ks.2.231.49
74Richmond, Va.2.681.02
75Columbus, Ohio0.053.58
76Sacramento–Roseville–Arden-Arcade, Calif.1.002.61
77Rochester, N.Y.1.562.02
78Hartford-West Hartford-East Hartford, Conn.4.46-1.05
79Albany-Schenectady-Troy, N.Y.0.752.55
80Dayton, Ohio3.010.19
81Memphis, Tenn.-Miss.-Ark.1.371.82
82Scranton–Wilkes-Barre–Hazleton, Pa.1.181.81
83Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md.3.78-1.04
84Chicago-Naperville-Elgin, Ill.-Ind.-Wis.0.00 2.57
85Syracuse, N.Y.0.00 2.57
86Milwaukee-Waukesha-West Allis, Wis.0.00 2.48
87Baltimore-Columbia-Towson, Md.0.481.82
88New Haven-Milford, Conn.2.96-0.67
89Washington-Arlington-Alexandria, D.C.-Va.-Md-W.V.0.00 2.25
90Omaha-Council Bluffs, Neb.-Iowa0.00 2.18
91Louisville/Jefferson County, Ky.-Ind.-2.744.92
92San Antonio-New Braunfels, Texas0.371.52
93Portland-Vancouver-Hillsboro, Ore.-Wash.-3.484.98
94Baton Rouge, La.0.00 1.50
95Atlanta-Sandy Springs-Roswell, Ga.-1.882.99
96Los Angeles-Long Beach-Anaheim, Calif.-2.103.09
97Indianapolis-Carmel-Anderson, Ind.3.49-2.53
98Kansas City, Mo-Kan.0.00 -0.12
99St. Louis, Mo.-Ill.0.00 -2.83
100Bridgeport-Stamford-Norwalk, Conn.-0.35-2.87

Realtor.com’s model-based forecast uses data on the housing market and overall economy to estimate values for these variables for the year ahead. The forecast result is a projection for annual total sales increase (total 2018 existing-home sales vs. 2017) and annual median price increase (2018 median existing-home sales price vs. 2017).

Originally posted by @Steve Milford :

My suggestion is to get a real estate license and then use it to gain access to property faster and look for deals. Being a Realtor doesn't carry a ton of credibility by itself, though it carries more than being an investor when you're starting out.

I have always wanted to be in real estate, but I had little cash when I started. Lol, in reality, I had none. I paid for my license and starting fees with a credit card. After my first deal, I paid off that credit card and still had money left over; lol, I was hooked. 

Being a Realtor is a side hustle for me and I help people when I don't have an active property I am working on. Active meaning one that I am flipping. And I do it to get out of the house.

Let me explain. I have learned to network a lot, don't think I am really good at it, yet stuff comes my way because I help people connect the dots. I look at a lot of homes for myself and a few buyers I always seem to find.  

In the course of that activity I find sellers that want to list with me and buyers that need help looking, so I help them and get paid for it. Is it my main focus? No. I have a W-2 job that I keep for insurance and other benes. 

Am I a high producer? No, but I am not in it for income as a job, I am in it to find deals. For many years I did nothing except learning. Once I got my license then I started investing too and it was a lot easier because I had the experience from helping other people.

Something to think about.

Ahh, so you're saying getting a real estate license paved the way for helping you find more deals because of the credibility it gave? Was it very time consuming to work under a broker part time on the side of your full time? I'm not too familiar with what realtors really have to do on the side of their day job. I talked to one, and he did a lot of farming on his days off.  

Originally posted by @Terry Lao :

@Rochelle Duong

Realtor.com came out with their 2018 Forecast for Top 100 Cities for growth and appreciation, rank 1-100. Lots of details, analysis, etc.

https://research.realtor.com/2018-national-housing...

Terry

Top 100 list below.

Top 100 Largest U.S. Metros Ranked by Forecasted 2018 Sales and Price Growth

RankMetro2018 Sales Growth2018 Price Growth
1Las Vegas-Henderson-Paradise, Nev.4.906.90
2Dallas-Fort Worth-Arlington, Texas6.025.57
3Deltona-Daytona Beach-Ormond Beach, Fla.5.476.00
4Stockton-Lodi, Calif.4.556.43
5Lakeland-Winter Haven, Fla.3.007.00
6Salt Lake City, Utah4.624.50
7Charlotte-Concord-Gastonia, N.C.-S.C.5.983.02
8Colorado Springs, Colo3.125.65
9Nashville-Davidson–Murfreesboro–Franklin, Tenn.1.007.67
10Tulsa, Okla.7.541.02
11Seattle-Tacoma-Bellevue, Wash.2.346.21
12Spokane-Spokane Valley, Wash.3.504.97
13Austin-Round Rock, Texas4.044.42
14Miami-Fort Lauderdale-West Palm Beach, Fla.3.105.28
15Little Rock-North Little Rock-Conway, Ark.7.001.37
16Denver-Aurora-Lakewood, Colo.1.756.54
17Orlando-Kissimmee-Sanford, Fla.1.246.88
18Toledo, Ohio5.162.95
19Columbia, S.C.5.073.00
20Palm Bay-Melbourne-Titusville, Fla.1.007.00
21Jacksonville, Fla.4.733.20
22Durham-Chapel Hill, N.C.5.182.62
23Providence-Warwick, R.I.-Mass.3.723.97
24Akron, Ohio5.891.70
25North Port-Sarasota-Bradenton, Fla.3.004.50
26Chattanooga, Tenn.-Ga.3.504.00
27Worcester, Mass.-Conn.3.773.68
28Raleigh, N.C.1.635.77
29Tampa-St. Petersburg-Clearwater, Fla.1.386.00
30Grand Rapids-Wyoming, Mich.2.964.25
31Boise City, Idaho2.005.00
32San Jose-Sunnyvale-Santa Clara, Calif.2.504.37
33Greenville-Anderson-Mauldin, S.C.2.804.00
34Madison, Wis.1.725.05
35Albuquerque, N.M.2.923.71
36Houston-The Woodlands-Sugar Land, Texas2.244.19
37Winston-Salem, N.C.3.003.21
38Riverside-San Bernardino-Ontario, Calif.0.525.66
39Buffalo-Cheektowaga-Niagara Falls, N.Y.1.274.89
40Fresno, Calif.1.294.81
41San Francisco-Oakland-Hayward, Calif.0.945.14
42Detroit-Warren-Dearborn, Mich.1.174.77
43Phoenix-Mesa-Scottsdale, Ariz.3.662.26
44Oxnard-Thousand Oaks-Ventura, Calif.2.293.62
45Augusta-Richmond County, Ga.-S.C.2.503.34
46Tucson, Ariz.3.002.71
47San Diego-Carlsbad, Calif.2.513.19
48Youngstown-Warren-Boardman, Ohio-Pa.3.012.50
49Harrisburg-Carlisle, Pa.2.503.00
50Cleveland-Elyria, Ohio3.002.48
51Birmingham-Hoover, Ala.3.002.42
52McAllen-Edinburg-Mission, Texas2.383.00
53Charleston-North Charleston, S.C.3.641.69
54New York-Newark-Jersey City, N.Y.-N.J.-Pa.1.164.15
55Jackson, Miss.0.005.30
56Virginia Beach-Norfolk-Newport News, Va.-N.C.1.403.82
57Boston-Cambridge-Newton, Mass.-N.H.2.552.64
58Pittsburgh, Pa.3.531.62
59Oklahoma City, Okla.1.493.51
60Portland-South Portland, Maine5.000.00
61Cape Coral-Fort Myers, Fla1.003.99
62El Paso, Texas2.692.24
63Minneapolis-St. Paul-Bloomington, Minn.-Wis.0.00 4.93
64Knoxville, Tenn.2.002.92
65Allentown-Bethlehem-Easton, Pa.-N.J.4.120.57
66Bakersfield, Calif.1.003.61
67Urban Honolulu, Hawaii1.433.11
68Des Moines-West Des Moines, Iowa3.201.19
69Greensboro-High Point, N.C.1.342.97
70Springfield, Mass.1.243.00
71New Orleans-Metairie, La.2.002.24
72Cincinnati, Ohio-Ky.-Ind.1.472.32
73Wichita, Ks.2.231.49
74Richmond, Va.2.681.02
75Columbus, Ohio0.053.58
76Sacramento–Roseville–Arden-Arcade, Calif.1.002.61
77Rochester, N.Y.1.562.02
78Hartford-West Hartford-East Hartford, Conn.4.46-1.05
79Albany-Schenectady-Troy, N.Y.0.752.55
80Dayton, Ohio3.010.19
81Memphis, Tenn.-Miss.-Ark.1.371.82
82Scranton–Wilkes-Barre–Hazleton, Pa.1.181.81
83Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md.3.78-1.04
84Chicago-Naperville-Elgin, Ill.-Ind.-Wis.0.00 2.57
85Syracuse, N.Y.0.00 2.57
86Milwaukee-Waukesha-West Allis, Wis.0.00 2.48
87Baltimore-Columbia-Towson, Md.0.481.82
88New Haven-Milford, Conn.2.96-0.67
89Washington-Arlington-Alexandria, D.C.-Va.-Md-W.V.0.00 2.25
90Omaha-Council Bluffs, Neb.-Iowa0.00 2.18
91Louisville/Jefferson County, Ky.-Ind.-2.744.92
92San Antonio-New Braunfels, Texas0.371.52
93Portland-Vancouver-Hillsboro, Ore.-Wash.-3.484.98
94Baton Rouge, La.0.00 1.50
95Atlanta-Sandy Springs-Roswell, Ga.-1.882.99
96Los Angeles-Long Beach-Anaheim, Calif.-2.103.09
97Indianapolis-Carmel-Anderson, Ind.3.49-2.53
98Kansas City, Mo-Kan.0.00 -0.12
99St. Louis, Mo.-Ill.0.00 -2.83
100Bridgeport-Stamford-Norwalk, Conn.-0.35-2.87

Realtor.com’s model-based forecast uses data on the housing market and overall economy to estimate values for these variables for the year ahead. The forecast result is a projection for annual total sales increase (total 2018 existing-home sales vs. 2017) and annual median price increase (2018 median existing-home sales price vs. 2017).

Thankyou! Do you have any rental property in any of states outside CA?

@Rochelle Duong

Yes, I do have property outside of Orange County (where I live). After doing my search and analysis, I realized that OC/LA real estate is too expensive to have positive cashflow. The best was small loss and hope for appreciation with a huge down payment. The best choice was outside of State. At that time, I looked at Las Vegas, Phoenix, and Dallas Ft.Wt./Houston. Las Vegas stood out because I go there alot but never off the strip. Once, I ventured around, there's a whole world besides strip.

Bought 3 4plexs, sold one, current have 2 that cashflow very well to the tune of 10-14% ROI. I already double and tripled my money. I invested way before the top 100 list for 2018. Now, all it does is reinforce that I made a good decision.

Your in Lakewood, after you do the analysis, you will realize that any property in OC/LA is way too expensive. You can try Riverside/ San Bernadino, or High Dessert, but all will still not cashflow positive, and you will end up will appreciation only.

I bought in 2013 to now, and still looking. There's still go properties in LV, but harder to find.

Terry

Hi @Rochelle Duong ,

Have you looked into some local meetup to go to? I believe there is one that is coming up in Santa Monica next week (need to double check). And some in Costa Mesa and Irvine in the next few weeks. Great way to meet people and get all your questions answered, or as much as possible. Feel free to reach out to me and I'll provide you some links.

Daniel

Originally posted by @Rochelle Duong :

Hello!

I'm currently a newbie to real estate investing world and am still considering various strategies that would be best for me. I am currently 27 years old, no spouse/kids, about $80K in student debt, and just started working as a health professional for about 40-55 hours/week. I currently am not paying any rent since my house is already paid off, but my main goals are to pay off that student debt faster and build wealth as soon as possible.

So in general, most of my income goes to paying off my loans, and the rest goes to personal expenses, and savings for investments. I wanted to hear some thoughts on what strategies would be the most forgiving for someone who doesn't have alot of money right now. 

I've considered wholesaling because I was enticed by the idea of making "quick cash," but as I did some quick reading on it, it does require ALOT of time bird dogging, marketing, and a legal process where I may or may not need a real estate license for (which I don't want to get). 

I've considered buying and holding, but living in california, the down payment for a home is expensive, so I was considering the housing market in other states.

House hacking is something I heard is also good for new investors, but still need to look into that more, since I don't know too much about it.

And fixing and flipping would be something I would do further down the road, but not now.

Someone also suggested buying land property as well, but its also another area that I am not too familiar with

Does anyone share a similar situation as me? Or what to consider when deciding on your investment strategy?

I usually don't post since I am still learning and don't have much to offer, but I was basically in the exact same situation as you, last year (28 years old, new to real estate, single no dependents, just moved back home with the family to save money, and didn't have much to invest.. I also live in LA as well and had to look out of state) so wanted to share how I got to the point to owning one property now - its not much, but my recent and similar experience may be insightful, we'll see.

Anyway, I've always had an interest in real estate, but two things always held me back: 1) There's so much to learn, it can be overwhelming 2) I was never dedicated to save enough

The second issue is my first piece of advice: Start saving. I read finance books since I was pretty young so this was not that big of a deal, but can be difficult for a lot of people. I wouldn't be able to offer better advice than books like Rich Dad, Poor Dad or Set for Life, so I will just say grab a personal finance book if you struggle with saving and just get it done. You can also spin this to a positive, having no cash now while you're still a newbie means you CANT make any dumb mistakes and will allow you to build your knowledge base while you build your financial base in parallel. 

Which brings us back to the first issue, knowledge, I had a slight leg up.

 My mom has been investing in real estate since shortly after the recent crash, so around 2009. She bought her first home with little knowledge and with really no prior desires to get into real estate. She was basically persuaded by her brother to get into it after he found success with his property. Since then, she has been putting aside her monthly profits and buying a new house every couple of years, solely off of the rental cash flow. Previously, she would just sit on those savings and let it grow (slowwwwly) in the bank. Now, 8-ish years later she owns 5 properties, bringing in steady income and is now best friends with her real estate agent. 

I guess this is where my story comes in, and my second piece of advise. 

Since she became so close with her real estate agent, she became family. When I moved back home to finally take saving and investing seriously, I gave my Mom's real estate agent a call. She already knew my situation of course and JUMPED right in and found me a list of properties immediately. She pulled ropes, walked me through the process, and even manages my property for free. Without her, I would probably still be reading articles about real estate, dreaming about getting started.

So, the second piece of advise is networking and mentorship. Find a good real estate agent, mentor, whoever it is that will help you get over the hump and motivate and give you the confidence to take that first step. It really is pretty daunting at first, but once the first door is open, things get easier. I was lucky to have a mentor in my mom and an industry connection through our real estate agent, but sites like BiggerPockets can be just as helpful, so you got a good start there.  

Lastly, and more specifically for your out of state question: Don't be afraid of this. As long as you have a good grasp on the neighborhood(s) you're looking at and, another point to my real estate agent, a solid property manager, out-of-state investments can be just as passive as one down the street (hyperbole I'm sure). My real estate agent offered to handle everything for me, but I wanted to gain the experience of actually being a landlord so I deal directly with my tenant with any issues and rent collection. So far, nothing has taken more than a 5 minute phone call or 10 text messages. 

Hope this helps. Writing this out made me realize how lucky I am to have my circle of knowledge and hope that you can find yours as well. 

@Dexter Maluto

@Rochelle Duong

The down payment for most people is the hardest single hurdle. For first timers, there's FHA at only 3.5%. For second on up, can range from 5-25%, depending on debt ratios or seller willing to carry.

I started a post to deal specifically with saving and their personal experience, see below link.

https://www.biggerpockets.com/forums/12/topics/511...

Terry

@Rochelle Duong

Perceptually by the general public, being a Realtor gives me more credibility than just being a real estate investor, IMO. I also have a license to protect, which adds to that credibility.

If you decide to become a Realtor, you need to find a brokerage that works for you. Be straight up with them when interviewing them. If your goal is to help friends and family as you become skilled in investing, tell them that. I had many conversations with different brokerages until I found the best one for me, which ironically was within the first bunch that I interviewed.

I belong to a brokerage that allows me to do business my way within the law and it is a brokerage w/o a lot of formal training. Instead it is the School of Hard Knocks. For that responsibility I also have to make my own phone ring, and but the reward is a better compensation plan, IMO. 

How each person works to generate deals is different and different brokerage require different things. How do I generate deals? 2 ways: 1) I start real estate conversations whenever I can and I learn about people, I get to know them, and I celebrate the wins in their life. Yes, it is both work and fun getting to know people. I send a lot of birthday, seasonal, and congrats cards. I get 90% most of my business this way. i.e. I ran into an old friend recently that stated that she wanted to start looking for a house. I have sent her birthday and Christmas cards regularly for approximately 5 years. 2) I perform cold-prospecting activities AKA I do a bit of direct mail/cold-calling/farming whatever you want to call it. The other 10% comes this way. I enjoy method #1 versus #2 more. 

Originally posted by @Daniel Y. :

Hi @Rochelle Duong,

Have you looked into some local meetup to go to? I believe there is one that is coming up in Santa Monica next week (need to double check). And some in Costa Mesa and Irvine in the next few weeks. Great way to meet people and get all your questions answered, or as much as possible. Feel free to reach out to me and I'll provide you some links.

Hi Daniel,
Sure! I'd love to see where these meetups are! Are they on meetup?

Originally posted by @Dexter Maluto :
Originally posted by @Rochelle Duong:

Hello!

I'm currently a newbie to real estate investing world and am still considering various strategies that would be best for me. I am currently 27 years old, no spouse/kids, about $80K in student debt, and just started working as a health professional for about 40-55 hours/week. I currently am not paying any rent since my house is already paid off, but my main goals are to pay off that student debt faster and build wealth as soon as possible.

So in general, most of my income goes to paying off my loans, and the rest goes to personal expenses, and savings for investments. I wanted to hear some thoughts on what strategies would be the most forgiving for someone who doesn't have alot of money right now. 

I've considered wholesaling because I was enticed by the idea of making "quick cash," but as I did some quick reading on it, it does require ALOT of time bird dogging, marketing, and a legal process where I may or may not need a real estate license for (which I don't want to get). 

I've considered buying and holding, but living in california, the down payment for a home is expensive, so I was considering the housing market in other states.

House hacking is something I heard is also good for new investors, but still need to look into that more, since I don't know too much about it.

And fixing and flipping would be something I would do further down the road, but not now.

Someone also suggested buying land property as well, but its also another area that I am not too familiar with

Does anyone share a similar situation as me? Or what to consider when deciding on your investment strategy?

I usually don't post since I am still learning and don't have much to offer, but I was basically in the exact same situation as you, last year (28 years old, new to real estate, single no dependents, just moved back home with the family to save money, and didn't have much to invest.. I also live in LA as well and had to look out of state) so wanted to share how I got to the point to owning one property now - its not much, but my recent and similar experience may be insightful, we'll see.

Anyway, I've always had an interest in real estate, but two things always held me back: 1) There's so much to learn, it can be overwhelming 2) I was never dedicated to save enough

The second issue is my first piece of advice: Start saving. I read finance books since I was pretty young so this was not that big of a deal, but can be difficult for a lot of people. I wouldn't be able to offer better advice than books like Rich Dad, Poor Dad or Set for Life, so I will just say grab a personal finance book if you struggle with saving and just get it done. You can also spin this to a positive, having no cash now while you're still a newbie means you CANT make any dumb mistakes and will allow you to build your knowledge base while you build your financial base in parallel. 

Which brings us back to the first issue, knowledge, I had a slight leg up.

 My mom has been investing in real estate since shortly after the recent crash, so around 2009. She bought her first home with little knowledge and with really no prior desires to get into real estate. She was basically persuaded by her brother to get into it after he found success with his property. Since then, she has been putting aside her monthly profits and buying a new house every couple of years, solely off of the rental cash flow. Previously, she would just sit on those savings and let it grow (slowwwwly) in the bank. Now, 8-ish years later she owns 5 properties, bringing in steady income and is now best friends with her real estate agent. 

I guess this is where my story comes in, and my second piece of advise. 

Since she became so close with her real estate agent, she became family. When I moved back home to finally take saving and investing seriously, I gave my Mom's real estate agent a call. She already knew my situation of course and JUMPED right in and found me a list of properties immediately. She pulled ropes, walked me through the process, and even manages my property for free. Without her, I would probably still be reading articles about real estate, dreaming about getting started.

So, the second piece of advise is networking and mentorship. Find a good real estate agent, mentor, whoever it is that will help you get over the hump and motivate and give you the confidence to take that first step. It really is pretty daunting at first, but once the first door is open, things get easier. I was lucky to have a mentor in my mom and an industry connection through our real estate agent, but sites like BiggerPockets can be just as helpful, so you got a good start there.  

Lastly, and more specifically for your out of state question: Don't be afraid of this. As long as you have a good grasp on the neighborhood(s) you're looking at and, another point to my real estate agent, a solid property manager, out-of-state investments can be just as passive as one down the street (hyperbole I'm sure). My real estate agent offered to handle everything for me, but I wanted to gain the experience of actually being a landlord so I deal directly with my tenant with any issues and rent collection. So far, nothing has taken more than a 5 minute phone call or 10 text messages. 

Hope this helps. Writing this out made me realize how lucky I am to have my circle of knowledge and hope that you can find yours as well. 

My goodness!
What an amazing story you have! Thank you so much, it was so encouraging for me to read your words. I am still on the search to finding a good realtor to help me get started, but for now, I'm in the process of equipping myself with knowledge so I do have something to bring to the table when I meet one. I hope one day, I'd be to share a similar story to yours

Hello Rochelle,

If you interested in the Detroit market I can give you a full run down and walk you through the whole process. There are great opportunities here but however you do need some capital to start off. You can make return's on your investment as high as 20% here and it would affect your current situation. If you and your partner can come up with $35,000 your in business. Please email me if you would like more information.

@Rochelle Duong

You got a lot of responses, and a lot of opinions on what to do. Real estate investment is not emotional, thus don't get swayed based on some one else's story good or bad. Real estate is logical, based upon data like home sales, median home price, job data, economy, Trump's tax plan, etc. You take all the data and make an educated decision.

You should first see how you are financially. I mean from a potential candidate for a loan. Look at your debt ratios top end (W2 income, other income support by 2 years tax return), and your bottom end ratio ( monthly student loan payment, monthly car payment, monthly credit card payments, etc). The lender is look for basically 33/38 debt ratios that includes your future loan. Your FICO should be 740 or high for the best rates. Your source of down payment should be in bank or other financial institution that could be verified. If you have money in mattress, lenders tend to think it is drug money.

If you have above financial set, then you are ready to look at potential real estate. I sent you a list of top 100 cities for 2018 forecast by Realtor.com. If you know, this website, then you know they are very reputable. 

Terry

@Rochelle Duong

If you have money in mattress, better to put all in bank, and let season for 3 months. Lenders will look at your average balance. If you put 25k in bank, with balance as of today of 25k, but your average balance is 1k, something is fishy. Over a period of 3 months, the current balance and average balance will be 25k.

Also, the top two cities is Las Vegas and Austin. I can attest to Las Vegas, as I have properties there. Your time frame to act is now, as I think in 2-3 years will turn. However, my position is different than yours. As I plan 2-3, but will wait each year and re-evaluate the economy. 

BTW, in 3 years, 2020, will be the completion of the Raider $1.9B stadium. Lots of incoming construction jobs to build the stadium.

Terry