Is there hope for a low earning newbie?

3 Replies

Hi BP community,

Recently I discovered the world of real estate investing and have been so excited about it. I have been reading books, devouring podcasts, connecting with others, and filling my head with content from BP and other places whenever I have free time. However, in all of this I have noted a trend (not the rule but a trend) that has me a bit discouraged. Most investors who's stories I have heard had some sort of a high paying job that provides significant cash flow when they got into the space and/or they lived in a market that wasn't so over priced. (I live in California)

Now I’m trying to overcome this by reading specific things to help me like Brandon Turner’s book “The Book on Investing in Real Estate with No and Low Money Down” and by trying to build my intellectual and social capital since I don’t have a lot of physical capital. However, when I look at the mountain I have to climb I feel so inadequate and impossibly far behind. I won’t give up and I won’t stop, that’s just not who I am. But I would appreciate anyone sharing their story if they overcame similar challenges when they first started out. And if you wouldn’t mind sharing strategies you used to overcome your obstacles or any other suggestions you have for someone like myself, I would welcome that as well.

Thanks for your time.

Hey Robert you're already off to a solid start with your choice of books and forums. This is not a "get rich quick" business. Most investors grind for 5-10 years or more before they finally see the true fruits of their labor and can live off their rental properties. You'll fall down, get kicked, punch slapped, and spit on by this business - we all have. Just keep at it and don't let lack of starting capital deter you. It just means you'll have to bring a little more hustle. 

I have a job that pays good (not great) and my wife is a teacher. We saved for 10 years before we bought our first rental. We try to cut expenses anywhere we can, we eat at home probably 6 days a week, I do all the maintenance, manage the properties myself, etc... We live in a modest home (1600 SF) and drive older vehicles. To make extra money I mow yards. I make more money than the people that hire me to mow their yards but they don't know that. I get to earn a few extra bucks and I get paid to workout. My goal this year is to pick up a few more yards to mow. My wife thinks I'm crazy but I see it as a way to pay for my gas and dinner out every week. Every little bit helps me get the next rental that much faster. Like Ryan said, this isn't a get rich quick business. I'm in this for the long haul. I work with so many people that say they can't save money. I guarantee you that every one of them have a cell phone and cable TV. Cutting those out would save you over $2,000 a year. These same people drive nice cars with equally nice car payments. We haven't had a car payment in 9 years. Cut back your spending in other areas and you could probably manage another couple thousand a year. If you do that for several years you will have tens of thousands in the bank that you can use to invest.

Hey Rob,

I know EXACTLY how you feel. It literally took me 7 years of saving all my tax returns and bonuses to earn enough for the down payment on my first rental...7 years is a long time!!  It takes a lot to get the ball rolling but believe me when I say, momentum is real. Once you get the first one the next is WAY easier!!  I’m looking forward to chatting with you!