Over the last 3.5 years we’ve worked to pay off all our debt, purchase our first primary residence, and save up a 6 month emergency fund. Sounds like Dave Ramsey right? At the time it’s what we needed to do. Soon after paying everything off we both took jobs at new companies and increased our income by 2.5 times.
Currently we AirBNB 1-2 rooms in our primary residence with about an 80% occupancy rate. We also do house sitting for some clients that brings in roughly $5k a year. On the weeks we house sit we also offer our entire house on AirBNB to bring in extra money from that business.
While paying off our debt we focused on reading real estate books and listening to Bigger Pockets Podcast to try and figure out what our investment strategy should be. We've practiced analyzing deals using the bigger pockets calculator and to be honest I don't think we really know what we want to do. We've looked at SFH, MF, and Self-Storage and we can really see ourselves doing all 3.
It seems like we are at the stage where we need to take action but honestly I’m not sure where we need to start. I know everyone has different starting points in their real estate investing but where do you recommend new people to start? What has really accelerated your learning when you first started? We have not made it to any local meet-ups nor do we really know anyone in the Houston Metro area but we’d love to meet others who have had success in this area.
Not knowing where to start is extremely common because there is a wealth of information out there on places like BP that make it hard to choose a place to start. Good and bad thing! The good news is you’re thinking about it and reaching out for guidance.
There is no “recommended place for new people to start.” It’s really about YOUR WHY and YOUR GOALS. Some things to consider on where to start:
- Why are you investing in Real Estate? Are you trying to build passive income to retire/replace a job, flip houses to replace income, use it as a tax shelter?
- How passive to you want to be? People start in real estate because they want passive income, but it’s anything but passive. Flipping is a full time job. Finding rentals to get passive income is hard, and if you don’t have a property manager or your portfolio grows big enough it can quickly become a job. It can become passive over time, but it is not starting out.
- Which asset class is the most exciting to you? I always tell people you shouldn’t invest in something that you don’t understand and that you wouldn’t be interested in working on daily.
- How much money do you have to start - this isn’t a deal breaker for a particular asset class, but it can make it more challenging. For example, multi-family and storage/commercial is not a “no money down” or no cash field to enter.
To answer your second question, what really accelerated my learning was two things. The first you mentioned - get out there and meet as many people taking action and already investing as you can. Go to local real estate investor meetings/meetups, reach out out to people already in the asset class you choose, etc.. Be surrounded by people doing what you want to do. The second thing is TAKING ACTION. Ive found the best way to learn is through experience. I read 20 books or so before I finally did my first deal, but that can be a weakness. You get analysis paralysis. Learn what you need to know to play the game so you don’t lose your shirt, but everything else comes with experience.
Hope this helps! Reach out if you have any questions. Always happy to meet up locally with other investors. I’m no expert, but I can share my experiences so far. My big message is get out there and take action!