How do I build my initial lump of capital to start investing?

2 Replies

So it is officially day 3 of my self study into the world of real estate investing. I still have much much to learn. But one thing that strikes out to me is that all of these examples of RE investing (flipping, wholesaling, buy&Hold, etc) all require having a down payment for a mortgage and some means of generating cash flow to pay off said mortgage. As well as more capital for expenses and building up equity.

And I am here like "wait, where am I suppose to get these tens of thousands of dollars to start off? I am just a kid with practically no money in the bank?" 

Any sort of advice would be nice, but specific advice for renting out & generating near-immediate cash flow for reinvesting & expenses would be even better.  

First, welcome to the BP community and its great to see another investor gaining the knowledge to be successful.

Every wise investor that I have ever discussed real estate with will admit that the first deal is always the toughest one to put together. I believe it is for this very reason that you inquired. 

I found it to be true that, you should first analyze properties in your desired market until you find a property that would be a great deal that an experienced investor can't pass up. (Check out @Brandon Turner 's posts and definitely check out the podcasts dedicated to finding and funding deals.)

Once you have a great deal on your hands, it will be much easier to find funding because potential partners will look at the strength of the deal, in turn may cause them to be more open to funding the deal for you. It's your job to obtain as much knowledge about how to execute the deal and convert. More experienced investors may request a nice % of the profit to help you through the deal and show you the way, but I feel that this is a small price to pay for the knowledge and skills of a experienced investor. 

I hope this helps!

-Tray

Hey Miesrah! 

Yeah unfortunately whether you wholesale or buy a property you will need some startup capital. As a young person I'm using the time required of me to save the downpayment to educate myself and analyze deals. Invest in your education first. Three days is not enough to be great at anything real estate or otherwise. 

My advice? Get your finances in order. If you have a job make a habit of setting aside a portion of your income towards your goal of investing in real estate. Use the wealth of information available here for free and in real estate books and podcasts to get educated. There are no free lunches or get-rich quick schemes. Anyone promising you guaranteed cash out the gate is probably scamming you. Be very careful screening potential mentors and partners and get your mind and finances right before taking the next step.