What to choose. What to choose!!!

21 Replies

I've recently moved back to Pensacola, Florida and I'm helping my friend by rentals in Baldwin County, Alabama. 

Helping my friend has reignited my desire to take action for myself in real estate. 

HOWEVER, I don't know where to start. 

Here is my profile:

Income: $80,000
Credit:  Bankruptcy / Divorce two years ago. Need I say more.
Savings: $6,000
Talent: I love details, photography, and I'm web savvy because I'm a web developer even though I'd like to be a full time investor and say good-bye to tech. 

I'm limited because I don't have a big chunk of money and my credit is horrible. However, I have a decent income. 
I suspect most will tell me Wholesaling. But I want any ideas as to how and where to start.

What Action steps can I take?

I'm also thinking of upgrading my bigger pockets membership because of the tools offered.

I woukd say find a credit repair specialist and get your credit score up

Credit repair takes time. What can I do now? 

What's your real estate background? Any experience in sales or investing?

@Michael Knaus - I've worked with a couple of investors in my early years. Mostly finding properties via mls or just driving and spotting a property. I've also flipped a property long time ago which almost turned into a disaster. 

As far as the comment about "it takes time". Really? I know this. I am looking for action steps given my criteria
I only want advise on direction. What is good to focus in on given the criteria I've mentioned. That's it. 

@Del Kelley Real estate takes time. anything in life worth doing doesn't happen over night. I would focus on repairing your credit. see a specialist (faster) or open credit cards little by little and pay them off each month. im not saying increase your spending, just saying instead of buying that tank of gas in cash use a cc and immediately pay it off. while your credit is repairing, start banking cash. build a budget and stick to it. 80K a year is good money, make it a goal of yours to retain as much of it as possible i.e. don't eat out, don't go to the local pub, drive a modest paid off car etc. once your credit is up and savings is up, use the 80k a year plus savings to get leverage. then use that leverage to buy your properties.

if your looking for a get rich quick scheme, id advise u skip over RE. don't get me wrong, you can make money fast by flipping homes but you didn't mention having experience in that area so I assume you don't.

another option if your really in a hurry is to find a partner with experience and cash, and see if you can buy into one of his/hers deals. you would have to market yourself for this and see what type of skills they may need that you have. maybe you can buy in and use your web development skills to beef up and/or maintain your partners website saving them money on outsourcing. that might be your ticket into a partnership.

since you mentioned your helping your friend, maybe you can partner with him?

good luck!  

@Matt Bacenet. Thank you. Your answer was thoughtful. When I divorced, I had to BK because I could not afford the 2300 a month mortgage payment. It's not that I'm reckless with credit. It's just divorce caused a bunch of headaches with my house.

Time to network with others.

Don't let your credit score stop you. You still have other ways to finance properties such as seller financing, lease options, subject to etc. Good luck man!

@Robert A - Completely agree and thank you. It's a little discouraging when most of these replies are "clean up your credit". Well duh, I know this and I'm doing this. 

I want to know given my criteria what I can do now

It's easy for people with good credit and experience to give the easy answer, but please be in my shoes for a second. Not all of us have a parent that can help us out, not all of us have ready funds. Not all of us have the credit to get a 3% down FHA loan. I do have a few things going my way. My income and desire to succeed. I was just hoping for answers that can help me now while I'm repairing my credit.

@Del Kelley dont be discouraged.

 most people are giving you the "clean up your credit" advice because its the most prevailing honest truth. no one is saying it is a show stopper but it is a significant barrier to entry unless you have significant capital in the bank. the greatest returns in RE come from the ability to leverage. in most cases, leverage is based on credit. So do you need credit to get into RE?, well no but it will greatly improve your success rate.

yes you can do seller financing but most of them would want to see your credit report and will most likely not give you favorable rates. seller financing is harder to come by these days as it is mostly due to cash buyers.

can you do a rent to own or a sublet lease, sure you can. but again, most will want to see a credit report before leasing, at least that's how it is in NYC.

no one on here is trying to discourage you from fulfilling your dreams and no one is trying to give you an easy answer. were all here to share our thoughts an opinions to benefit one another.

I think your best bet for something u can do right now would be to attend local metups in your area. network to other investors. try to develop a relationship with your local credit unions. I would leverage your friend who you find rentals for now. see if you can borrow or partner up on a deal with him. try to partner up by offering your strengths to someone who lacks in your area of expertise.

You knew the answers...you were just looking for some validation from others, and so I'll give it to you.  You're right...start with wholesaling.  You've been out of the business for a little while, so take your time getting back into the swing of things before you start becoming personally responsible for more debt in the form of owner finance, subject-to, etc.  Wholesaling gives you the chance to analyze renovations and rentals, and get feedback from end buyers/investors without the risk.  You just came through a messy divorce situation, so don't jump into a bigger mess by taking on the risks and responsibilities of owning real estate until you're on a better, more secure financial foundation.  Create a marketing plan, deploy your capital to generate some motivated seller leads, wholesale a few deals and SAVE the money you make to create a war chest to go after bigger and better things.  You don't need a new truck or vacation right now...that will come later.  After you have a few bucks, you'll be able to more comfortably take on a rental property (or 2 or 10) with creative terms that don't need good credit, and you'll be working towards "mogul" status in no time.  Best of luck to you!   

Hey Matt. I think your advise is sound. We are close in area, so I hope we can talk in person. Thanks again Matt.

Just throwing this out there but you may still be able to qualify for a 203k loan which you can use to do your own house hack. A couple more ideas would be to look for a FSBO property that needs a little work or maybe even a lease option to buy may be beneficial. GL

Run and study deals as often as you can, and keep an eye out for what is working/profiting/cash-flowing. What works? When you figure that out (and, as everyone has said it will take some time) go for it.

Welcome to BP!  (I assume by your numbers that you are kind of new.  ;-) )

I agree with the advice you've already been given.  I also say you should really consider going Pro here.  It gives you the chance to run unlimited deals as well as watch old webinars.  When it comes time to follow through with a purchase, you want to be sure you're making the right decision.  Practice helps with that.  :-)

Also, you didn't ask, but I have another piece of advice, before buying anything, check the flood plains and don't buy a "down house"--a house where the property slopes toward the house as you'll always have water problems.

Good luck!

Christen and Jody, thanks. I will study deals and go pro at the beginning of the year. 2018 look out!

@Del Kelley , boot strap a low cost marketing plan. Drive around and get run down property addresses like you did in the past, send handwritten letters and answer your phone. Find a deal, negotiate it and sell it for a profit. I’m assuming that you have time since you don’t have the funds? If so, put in the work and use the low cost methods. Network for deals, drive for dollars, door knock, etc... cheap marketing and work hard to find a deal, that’s what you need to do! 

Thank you William. In order to have something extraordinary one must do something extraordinary.

Perhaps attend an investment club getting a realtor license to buy some time.

@Del Kelley , I forgot to mention, when you are ready to upgrade to Pro, watch a live webinar because they often give a discount code in it.  :-)

Thank you Jody.

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