What is a good entry to investing??

Question

What is the best way to get started?

Initially, I thought If I begin wholesaling I can obtain the money to purchase for a buy and hold. I currently don’t have the money to do it on my own and the I’ve been searching for a REIA and my area (sacramento) and haven’t found one.

I’m willing to go to a Bay Area REIA but in the meantime I’d still like to be educating myself and creating an execution plan.

Account Closed · Answer

@Dominique Pratt @Kenneth Reimer is right. The money is all in the deal. The traditional path is to cold call a lot of agents or homeowners to see if they'll be willing to sell their home at a price that works for you. It's definitely not easy and I'm not sure that wholesaling is the best option for new investors because you won't have a good sense of what a good deal is and you also won't have a list of investors who will purchase your assignment. It might be best to figure out who are the big players in your area and find out how you can add value to their organization and learn the business from the inside.

If you're looking for meetups to attend, check out meetups on the BiggerPockets networking page or on meetup .  com. Let me know if you're ever in the Bay Area. We host meetups twice a month in San Jose!

Jaron Walling · Answer

Anyone who says you don't need money to invest in real estate is lying.

You can invest any number of ways (Conventional, BRRRR, flipping, wholesale, JV, etc) but the road block is real.

In my opinion it's best to save and invest in knowledge first.

Jerryll Noorden · Answer

Damn straight!

Tell me the definition of investing. You 10X your money. Spend one dollar, make 2!

You NEED money to invest and even the definition backs this up. You brilliant feller you!

Kenneth Reimer · Answer

@Dominique Pratt There's no "best way." However, you as an individual will have one way that you find is your competitive edge for making money in real estate. Making money in real estate is all about finding the deal. If you find a good enough deal, finding the money is the easy part. The market is currently awash with capital desperately wanting to be deployed. My recommendation is that you watch the market like a hawk. I would watch all sorts of real estate on Redfin, MLS, Zillow, LoopNet, etc. That way, when the right deal comes along, you know it immediately.

As an example, I recently saw a deal in my market come up.. In my opinion, the deal was underpriced and well-located. Within 24 hours, I put the deal into contract. A few days later after everyone had a chance to digest the numbers, they were calling the agent off the hook, to which he had to tell everyone it was already gone. Hence, the point is to know your market better than anyone else. If you wait until you have money to buy a deal, a dozen good deals will have gone by. Start educating yourself as much as possible. You have to want it more than the next person. Hope this helps and feel free to reach out with any questions!

Bill O'Donnell · Answer

@Dominique Pratt

House hack your existing house.

Rent a room. Create an apartment in the basement/attic/garage

Try airbnb, rent out the garage. Be creative. Get your house generating cash, even a small amount..

Jerryll Noorden · Answer

Dom, if you do it right you can certainly start with  little money... Well  wait let me rephrase that .. with "little" money.

Lets say you have 5grand to invest with. If you don't it is not that hard to save up.

Please do not make the same mistake EVERY other investor makes, with a limiting mindset.

What they do is this:

"Ohh I have no money so I will go do D4D, CC, Door knocking and put bandit signs up".

Because these are "free" right?

Their mentality is as follows. Once they find a deal and make money ... THEN they will do it the right/better way.

Well think about this..

"Ohh I will do it a way that does NOT work, to make money, so I can THEN do it a way that works". It is lunacy!

So let me give you an outline of a strategy I have developed that my clients are applying with tremedous success.

It is called the Forced Traffic And Conversion Strategy.

Hire a PPC expert, and put down $1000.- for add spend. A reputable company doing PPC will often gave you the first month free, no cost to manage your campaign. If you need someone I can recommend you someone.

Then Hire a SEO person that knows what they are doing. (Sadly everyone does SEO wrong), but let's assume they are good.

So you are out 3K from the get-go.

BUT you will make get a lead and you will sign a contract and you will make 10K.

Now you will say: "Whoooow Nelly. That is a huge leap of faith there buttercup".

And Then Buttercup.. moi.. will say. Nope, Not at all and here is why!

CC, D4D, DK, may never get you a lead. Those are not really predictable and scalable reliable lead generating systems... but PPC and Facebook ads are!

Look you do not see Nike Drive for dollars right? Or knock on doors.

WHY? They have money they can do what ever they want... BECAUSE THAT CRAP DOESN'T GENERATE LEADS ON DEMAND! And if you want a guaranteed path to success, you can't rely on methods that are based on luck!

So We are going to do as the big boys do. PPC or FB ads.

These systems PROMISE you leads guaranteed...

ASLONG as you target the right audience, AND you have sufficient budget.

So you will get leads, this is a fact.

Now you will wholesale that lead. Note you only care about ONE deal. JUST one. That's it!

How do I know you will wholesale the lead succesfully?

Because you are going to wholesale it the right way.

See what most wholesalers do, is they negotiate and negotiate will the seller won't budge below their number, then they sign the contract for that number and then they hustle to get that contract sold.

Obviously you do not do that.

You only sign a contract when the numbers work FOR YOU!

Well what does that mean? Well simply this. Before you make an offer, you know the ARV, you know the COR, you know the Profit margin of your buyers and how much profits they are looking for. Based on those numbers you come up with your max offer. If the seller won't reach or shoots below this number you WALK!

So you only get contracts signed that are good deals and you will get the contract sold in hours, not days!

So see... told you. Fact, no leap of faith here!

So you spent 3K and you made 10 K.

You are set

You now take the 3K you just spent that first month and put it back into your pocket. You broke even. You take another 2K out of the remaining 7K and you pay your SEO guy for the next month of SEO service. Then you take yet an other 2K out for PPC (doubling your previous bedget) leaving you with 3K.

Congrats within the first cycle, you made a profit of 3k WHILE you have secured your next ccycles marketing budget and your SEO efforts.

So You will repeat this, keeping in mind that you have probably made mistakes as this was your first time. You could have done things better, more efficiently, and will less delays.

But who cares right? You made a deal.

However you will write down every thing you did wrong, and you correct these the second time around.

So you doubled your marketing budget so.. you double your leads. Yup it is scalable like that! So now you will make 2 deals and you wholesale them both!

You now made 20K. What happened here?

Well... what you thought was just some "method" was actually a system. Doing a method once is sheer dumb luck. But doubling your input hereby doubling your output, in a predictable way, is called a system.

Now you do not spend a single cent out of your own pocket. Your money is making you more money. Your marketing efforts are self sustained!

So you now put 7K into your marketing budget. You make 50K to 70K.

You hire a receptionist, a scheduler an acquisitions manager. Now you put down 30K in marketing.

Here is what happened now...

You started scaling and automating your "non-existent" business, from DAY 1! You make more money while working less, because you have a team now.

And then something very peculiar happens. One day you check your email and you see 4 leads in your inbox, and you say on Stewie voice.. "What The Deuce?" Well you have been repeating this cycle for 4, 5 months ... making money... while someone was working on your SEO for you. Now you can quit the marketing and get a ton of free highly motivated seller leads...

List like yours truly.

And you are set.

That is how I would approach it if I were you.

This is a plan a system, there is no luck involved, no questionable leaps of faith. This is cause and effect. Not magic!

Good luck!

Michelle Fabro · Answer

@Anthony Gayden your response to Dominique  struck a cord with me because I am looking to make my first purchase, but not 100% sure on how to go about it.  My martial house has sold and is due to close escrow next week. I'm currently renting an apartment. I found a condo in my city that has been sitting for 4 months.  I'm not sure what would be the best way about this, should I buy as a primary residence/rental property or a flip it? I've been pre-approved for a conventional loan, however I understand the best BRRR  would be with hard/private money (something I'm still not comfortable with being a newbie). The reason I'm on the fence is because of my children (stability).

Advice/tips?

Anthony Gayden · Answer

There is no easy way to get started without some money. The good news is that you don't need a huge sum in most cases. I know California is an expensive state to start investing but Sacramento is known for being a little less expensive.

If I was in your shoes I would begin looking for a possible rental house to buy as a primary residence. You live in it for a year then turn it into a rental. You may be able to go as low as 3% down payment. For a house that is $250,000 that is only $7500.

As for earning the money, consider overtime, a second job, side gigs, selling some of your stuff, asking for a promotion, or finding a higher paying job. If you want to make this happen you will have to get some money saved up.

Jerryll Noorden · Answer

And... hmuaaahhh yeah there actually IS a best way to enter investing,. you may not like it but there is.

You start wholesaling. Keep in mind I HATE wholesaling but I am quite good at it.

Here is why Wholesaling is the best way to start.

Being a (good) wholesaler,

You need to learn how to do ARV's

You will become an expert on Cost Of Repairs.

You will understand what flipeprs want.

You will understand how flippers think

You will understand what Buy & Hold investors want

You will understand how B&H investors think

You will understand the goods and the bads about houses and how to evaluate them based on market, location etc. etc.

You will learn how to negotiate, and talk to sellers.

and so much more

But in short.

As a wholesaler, you need to be an expert flipper and an expert B&H investors.

The highest ranking investor is a good wholesaler.

Then a flipper

then a buy and hold investors

Yup buy and hold investors are the wimps of the investing world! :P

So let the talkers talk.

Because I started as a wholesaler, look at me now!

I have mastered every single criteria needed to wholesale, and that is why I am not king of the mountain in CT, while all the nay sayers here, still argue amongst themselves how wholesaling is inferior. ;)

Dominique Pratt · Answer

@Gordon Cuffe thank you! I joined the group and I do have questions regarding wholesaling,

What is a good entry to investing??

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