I have a question from all those pro's that have started their real estate investing career. I am practicing and practicing with calculations and analyzing properties so I can find that good deal when it comes around. Here is my challenge in beginning. First, I know we will encounter challenges as soon as we start to move in any direction to improve our lives, I am trying to figure this out.
I am starting out in this from a position of having dealt with the earned income area of money making and not being able to get work. I have trained in copywriting but haven't gotten much of any work in the field and when I talked to my real estate agent one of the things he brought up was the scenarios this may cause when I go for loans. He also reminded me that I need to get an LLC or structure to begin my investing career.
The thing I've run into is without being able to get foundational work, a job, or something like that I'm running into expenses I will have before I even get my deal off the ground. My question is, how have other people handled this in their own experiences? I feel like I'm going out of my mind in having to depend on others in employer to possible employee if I get the right combination that causes them to want me to work there. I'm not trying to sound negative but I see so much potential and where I want to be doing the thing I love makes me want to do this so bad. I just know this is a forum of people helping others so I feel like I want to turn to a community of like-minded, focused people.
Thanks for any input,
@Larry O'Connor I'd focus on your job situation first. See how much is coming in and going out. Get your personal finances in order. If you still need money to invest, save up. You may need to start out by building cash and finding deals for other investors. Or, you can wait and save up the money to buy. Another option is to take on a partner. Start networking at your local real estate investment club. Meet others who are doing what you want to do. If you can find someone to work with who fits with your personality, you may learn a lot in a short period of time. Good luck!
First things first Larry. Congratulations!!!
Yes, you read the correctly...congratulations. I'd explain why I say that, and many here understand the meaning behind that one word, but it will mean more to you when (not if) you learn the meaning of that word, and how it relates to your current situation, on your own.
Second, your initial answer (and continuing one as well) is partnership(s). There are many partnerships that are made for the wrong reasons, such as friendship (LOL...no more comment on that one), relatives, fear, etc... There are only 3 reasons to form a partnership. If you form one for any other reason, the partnership will fail...mainly because you didn't fill the needs for forming that partnership...which involve those 3, and only 3 reasons to form it:
1 - Your partner does something you can't do.
2 - Your partner does something you don't want to do (if you don't want to do it, you won't do it well, so...)
...and the last, and most important one.
3 - Your partner does something you shouldn't do. Just because you can do something, doesn't mean you should.
Where will you find these partners? At you local REIC...and realize this, they are looking for you there too.
As @Rachel H. mentioned, look at your finances and get them all in order and know where you stand. being a Contractor, i have been self employed for many years and have had to explain my tax return to lenders that are used to people that get W2's and how my returns differ. You are seeking guidance before jumping in and trying to take hold of your life which is very commendable. as @Joe Villeneuve mentioned, you could seek a partner, a relative or friend, but i agree with him on trying to find one at a local REI meeting, having friends and family may just ruin that relationship if something goes bad. you do not HAVE to form an LLC. you can purchase investment properties without one, i personally have each property under an llc. what you can do when you go to a lender, once you know your finances, is find a small local bank that deals with investors, go in there with confidence and numbers. what i mean by that is have a net worth calculation on a sheet of paper ready for them, last 2 months bank statements, last 2 years tax returns, numbers on the property you want to purchase ( what you predict will be the NOI for the property), last 2 weeks of any W2's you may have. you go in there with confidence, put down all those papers with numbers and how you feel you and they would benefit from the purchase, that will impress them. I did exactly that on my first loan and the meeting lasted 10 min, the lender was so impressed i was approved in days, that was 7 loans ago with the same bank. tip: try and meet with the head loan officer.
forgot to put in the most important number you should have, your DTI , that is the most important number a lender will look at. if you can show that you can afford the property with your income - dept and with all the other numbers i mentioned, they should have everything they need.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing