Where to start?

9 Replies

My husband and I are just getting started in real estate. We just bought a $300,000 home 2 months ago that we are living in currently. We are now looking for an investment property, our first inclination was to buy a rehab home in a nearby area and flip it but our lender is warning us that this could end up being not worth it in the long run as we are likely to put more in than we will get out.

We are itching to get started, we know the loan is there without having to borrow on our live-in home and our lender says all we need is 10% which shouldn't be a problem for us, my question is, where should we get started? Do we start with a rehab or do we start somewhere lower on the chain?

I don't want to jump in both feet first and then end up drowning, but at the same time we want to get started asap!

Any advice would be greatly appreciated, thanks!

Leighbeigh

What is the risk and what is the up-side, these are two important elements that must be evaluated. When I started investing (1972) there were few books on how do you go about evaluating a real estate investment. I did it by trial and error. Today with the internet and all the books on the subject of real estate investing you should have little trouble in getting info.
Good Luck and Best Wishes

Thanks for the reply!

I have purchased two books thus far, "Find It, Fix It, Flip It!: Make Millions in Real Estate--One House at a time" and "Fast Real Estate Profits in Any Market: The Art of Flipping Properties". I bought them because they were both rated very high on amazon.com. I have also been to various sites such as this one and about.com. Are there any other resources you would recommend?

Thanks again!

Hey Leigh - Have you really explored all of the information on this site? It is a huge depository of information with thousands of pages of helpful information. Take some time to go through it. You will be rewarded with a vast amount of new information that should help answer many, if not most of your questions.

Hi biggerpo,

I didn't mean to imply that I had read all the sources yet and certainly not this site, its huge! :wink: I can see how it looks that way though, sorry about that! I was just wondering if there is anything else that's an absolute must see for beginners or if there are any other references that I could be missing.

Thanks for replying!

A resource that you are missing is an investor in your area. Work one project with them and build your team as you go. There will be things that you are not expecting that will come up durring a rehab. Do not approach the investors team to work with you without their permission. Get some hands on experience before you jump in with both feet. Don't get dealitis that is the quick way to get into trouble.

There are ton of resources out there. I'd look around for deals, then research out everything that comes up.

The way you avoid getting over your head is by looking carefully at the numbers of every deal you come across. Only invest in things where you are sure the risk is small. Never get in to an investment just because you really like the house or the area or you're pretty sure that eventually property values around there are going to go up. Make sure that it is purely a financial desicion.

Originally posted by "Ohio Realtor":
A resource that you are missing is an investor in your area. Work one project with them and build your team as you go. There will be things that you are not expecting that will come up durring a rehab. Do not approach the investors team to work with you without their permission. Get some hands on experience before you jump in with both feet. Don't get dealitis that is the quick way to get into trouble.

Thanks. I plan on going to our local real estate investors meeting, looks like its on the third Thursday of every month. I would love to find someone who I can "watch" first. Hopefully I can find some such person.

Originally posted by "BryceB":
There are ton of resources out there. I'd look around for deals, then research out everything that comes up.

The way you avoid getting over your head is by looking carefully at the numbers of every deal you come across. Only invest in things where you are sure the risk is small. Never get in to an investment just because you really like the house or the area or you're pretty sure that eventually property values around there are going to go up. Make sure that it is purely a financial desicion.

Thats a good tip. I do tend to "fall in love" and would likely use that as part of my reason for making a purchase. Mostly because I would be inclined to think that if I love it then the buyers will. I havent reached that part in my book yet but I'm sure its about to say exactly that.

I will definitely watch out for that! Thanks!

We all tend to "fall in love" with properties, thats part of the fun in investing in real estate. I just try to not let the "love" get in the way of the numbers.
Good luck and best wishes