Mike, congrats on making the decision to make the first steps in investing in real estate! Determining those first steps will likely be the hardest part--but don't get discouraged! It will get easier (and less daunting) as you become more experienced. To answer your question about investing while renting, there are a number of investors that have become successful because they rented (at least initially while they were first starting off). In one of the early podcasts, the individual managed to convince his wife to sell their big house, move in to a smaller apartment and use their sales proceeds to invest in cash-flowing rental properties! In certain markets, renting may be more cost-effective than buying which means your monthly payment will be lower than if you owned a home. If you're thinking about conventional/bank financing, they'll look at your monthly expenses to determine what you can afford (rent + car/student loan payments, credit card payments, etc.). So if your rent is less than a mortgage payment + monthly property taxes + homeowner's insurance and PMI (if applicable), you might actually be increasing your purchasing power by renting! Seems kind of counter-intuitive, but if you look at the numbers, it makes sense! So don't let your current circumstance of renting hold you back! You got this!
On another note, are you thinking of investing in the Milwaukee area or elsewhere?
Hello and welcome to this site Mike! Even though you are fed alot of BS about Wholesaling I would not recommend Wholesaling as the place to be in when you first start out. You may have to learn the different types of real estate and there is Wholesale competition out there too. They tend to know more than you and they do crap to take advantage of you or go behind your back. It's not as easy as the sellers say it is. Most of the people you hear from on the Internet are crooks trying to fill their pockets, not yours.
Depending on your attitude and your level of faith and honesty that also can be difficult because at least half the time you spend with sellers you have to be a little dishonest with the seller with your actual intention of what you are really up to. That is why you may have to do two closings and budget for both of them in an attempt to not let the seller that you are making a profit on what you are doing.
In this economy Fix and Flip may be the best way to go including the borrowers that are willing to finance your repairs or rehab or to purchase multiple unit houses with a loan that the FHA will provide you with a low down payment but it is only made to an owner-occupant for regularly 12 months and you get to keep that same loan if you even when you choose to move away.
Another thing to consider is to buy apartment complexes and take the advantage of positive clash flow and using a cap rate to increase your value on add-on properties and raising the rent. Plan on this to be a long term investment of 7 or 8 years or longer. You do not need any prior experience, That statement is a myth.
You typically can get a Property Management Company when you work your way up to about 30 units and can turnover the property to them to take over the daily operations and you get monthly reports that are financial and occupancy involved.
The smaller apartment complexes (starting at about 6 units) are often owned by individuals that are willing to give you the financing. Another typical positive attribute about doing apartments is having less competition and having more units at a single address.
The more units you purchase, the better. Who am I? i was in the construction management business for about 30 years. I also held a real estate broker license for about 30 years. I was born and raised in Dallas, Texas so I have plenty of experience in real estate.
If I can help you on anything please contact me on this website. I am on this website just about everyday. For about the last 4.5 years I have learned much about real estate investment and do that 7 days a week because I have been bedridden by some medical issues.
Good luck to you!
I was actually locked into a lease when we decided to start real estate investing as well. We wanted to house hack a duplex. We did not wait to start looking. By the time you find a property, make the offer, set the closing date, etc it could be at least 6 months down the road anyway. We talked with our landlords and were honest with them. Then, when we found a place, we helped the landlords find new tenants to replace us and sign a new lease. Yes, we would have been responsible for our lease if the landlords couldn't find anybody new, but Iowa law states landlords must make a full effort to replace tenants that move out early. We helped a lot to find good tenants. Again, we were house hacking and wanted a live in FHA loan at 3.5% down, so we needed to move into the place within 30 days after close.