New Investor, where to begin?

Question

Hello everyone, I have 12k available for investment purposes and am interested in getting into real estate. I recently finished the book Rich Dad Poor Dad and became inspired. I have been listening to audiobooks on beginner real estate and am looking for some real life advice. From your experience what is the best way to start via real estate investing? Should I buy a home under a FHA, live there, and charge my roommate for rent for two years, then move out and rent the home out to a family or should I take a different approach?

Account Closed · Answer

@Summer Pepitone

Study REI, join your local REI group, network, pay attention to property prices in the area you're looking to invest in, and learn as much as possible. I started out like you by listening to RDPD. Then I fell into a great book (also on YouTube for free) called The Millionaire Real Estate investor by Gary Keller. It was like a step-by-step guide for real estate investors! After that I found a couple local investors and became close with them. Finally bought my first property a year ago, and now I'm in the process of closing on my 13th one.

Summer Pepitone · Answer

@CJ M. Thank you for your expert opinion CJ. I too recently stumbled upon that book and will begin listening to it once I finish “The Beginners Real Estate Investor” book. I also joined meetup.com and joined REI groups through there. Two steps down and one to go!

Caleb Heimsoth · Answer

@Summer Pepitone. You’ll need more money most likely. Wait til you get to 30k I would say minimum.  If you want to do something immediately you can stick the 12k in a reit

Brian G. · Answer

@Summer Pepitone 100% the easiest way to start is to house hack imo. This is where you buy a house live in one bedroom and rent the other bedrooms out to room mates or buy a 2-4 unit property, live in one unit and rent out the others. You can do this with 5% down on a conventional loan. Ideally, the rents would cover most/all of the expenses and at minimum lower your cost of living. Live there for a year, move out and do the same thing again. Rinse and repeat...I would totally do this but we have too many kids :-)

Jesse Greaves · Answer

@Summer Pepitone

Look to a 203k loan, on a multi unit re-hab. You'll need only 3% down, and if the renovation completes before the close out inspections, you will recoup your down payment in rent without payments. (203k allows you to finance the first six months of payments). 12k and you're off to the races!

Summer Pepitone · Answer

@Caleb Heimsoth Hello Caleb, thank you for bringing my attention to REIT’s. I will have to do research on that topic to determine which REIT’s are the most profitable. If I could increase my investment capital through that method I would be all too willing. Thank you for sharing your knowledge!

Summer Pepitone · Answer

@Brian Gerlach Thank you for your help Brian, I have been considering this method as a start myself. If I find the right property it will be a done deal. Until then I will continue my research!

Summer Pepitone · Answer

Thank you Jesse, I will look into the laws and regulations associated with these facilities. That is a start!

New Investor, where to begin?

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