Rookie at Real Estate
Asheville, NC · Member since 2020 · 36 posts · 6 votes
Rookie at Real Estate
Most Popular Reply
Chicago-Texas · Member since 2017 · 30 posts · 26 votes
5y@Victoria Hil, I would recommend reading Brandon Turner's book "The Book on Rental Property Investing". Prior to reading this book I had owned small multi unit building for a decade, I was stuck and was not sure on scaling and was even thinking about getting out of Real estate all the way. I followed his advise and now I own 20 doors ( duplexes, multi units). I am split between in state and out of state properties, self manage, work full time. I scaled in last 3 years and thanks to the book, my ROI is in double digits. My goal is to reach 40 doors by next 3-5 years.
My advise for you, one of these day sit back, have a beverage of your choice and ponder on net income per month that would meet your goals, that was my starting point. I can say I have already achieved my initial number in three years, and unlike other investments this number will always stay same or go higher.
In my opinion, real estate is key to building long lasting wealth, it will be slow and not glamorous. I am thinking about quitting my day job in near future (2-3 years) and moving to Europe with my family and I am not European.
I recommend finding good real estate agent, next part is finding good contractors, I would recommend asking your agent for contractor that is reasonable.
When starting out and you are buying property 4 or less units don't worry about LLC, make sure you have umbrella coverage besides the insurance. Also stay away from big name insurance companies they are way too expensive, go with a broker and ask them for A to A- companies only. Finally don't file a claim for small items, my rule is 10k or above, so I set my deductibles accordingly.
Good luck and take a splash in this awesome journey if you haven't already done so.
Pete...
43 Replies
- Asheville, NC · Member since 2020 · 36 posts · 6 votes5y
@Gaurav Chaudhari
Just got that book! Thank you! Hope all goes well! God bless!
- Investor · Wichita, KS · Member since 2017 · 584 posts · 813 votes5y
You want to get into real estate? Oh my. Real estate gets easier when you have money, but starting out is extremely hard. You’ll have to deal with a contractor who has little or no vested interest in the success of your company. How will you get them vested?
You’ll have to deal with tenant phone calls in which they expect you to fix issues as soon as possible. How will you forge a relationship with handymen to have them prioritize your maintenance calls?
You’ll have tenant turnover. How are you going to reduce that turnover? How quickly do you think you can get a handyman that has little or no vested interest in the success of your company to the property to bring the property back up to a rentable status?
Do you know how to evict someone?
Maybe you think you’ll hire a property manager...
How do you control your costs? Do you just blindly trust the numbers they provide you? Do you think you’ll cashflow when you let others manage your investment?I’m glad to see you are buying books. It’s kind of like the guys that got rich selling shovels to the gold miners.
Now for my advice. I have a handful of properties and think I’m qualified. Manage your own properties, at least till you have 20 or so doors. Ask around right now for handymen/contractors. Cheap, reliable and quality-pick two because you can’t have all three. I chose cheap and quality. I found a guy that could rehab an entire house, who was down on his luck, and I paid him minimally on the first deal. I spotted talent. I buy cheap houses for less than 20k on average, so I told him for every 10 houses he does for me I’ll change his life and give him one as long as he continues charging me very little to rehab the houses (3-4k for complete rehabs). I pay his phone bill. I make sure he has transportation to the jobsites. That’s how I got him vested in my business. After several deals I could afford to do a contract for deed with him to live in one of my properties, I pay that living expense in exchange for labor every month (rehabs on properties and maintenance on existing properties). So now I control his living situation, hence I pretty much control 100% of my overhead. Now I have a guy who is willing to fix anything I ask for a minimal amount of money, in a timely manner, allowing me to scale to as many properties as he can fully rehab in a year (3 or so per year roughly). He’s now more reliable. We have an interdependent relationship with one another. I’m his retirement plan. He’ll get a new rental for every 10 houses, something he would never have been able to achieve without me.
Good luck! You’ve now read what I’m up to. I’m sure you can see why many fail, give up, or never get started. A book that did change my life, aside from Rich Dad Poor Dad was from T. Harv Eker called The Secrets of the Millionaire Mind. I quote, “You want problems. Problems are good. Problems mean you have a tenant. You’ve got to be bigger than your problems.”
- Investor · Tampa, FL · Member since 2017 · 589 posts · 251 votes5y
Always continue to learn, real estate is so vast with a lot of moving parts. This site has so many resources that you can use to avoid paying a guru. Best of luck to you.
- Asheville, NC · Member since 2020 · 36 posts · 6 votes5y
@Jonathan R.
Thanks for sharing that! It’s much appreciated! And I’m going to have to check that book out and give it a go!
- Asheville, NC · Member since 2020 · 36 posts · 6 votes5y
@Zachary Ray
Thank you so much Zachary!!
- Real Estate Broker · Fort Lauderdale, FL · Member since 2018 · 196 posts · 191 votes5y
My buyer didn't send escrow in time and the seller used that to back out and go with a higher backup offer that had just came in. In this career, you getting paid relies heavily on other peoples actions. Stay on your timelines. Keep calm. Welcome to real estate.
- 5yWale LawalBusiness MemberReal Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
@Victoria Hill The Big encouragement is YOU.
Know what you want and go for it.
Networth with people that are already doing it.
Set up your 90 days Real Estate Goal and hold yourself accountable to that goal. Don't forget to keep it simple 👌.
I work full-time as a Project Engineer, I'm also a Realtor (specialize in working with investors) and I'm also Investing Full-time.
All these are not easy if I don't have the "Personal Motivation" to keep going no matter the amount of external motivations.
I will suggest you stick to a Real Estate Niche and get great at that niche first before diversifying to other Real Estate Niches.
Goodluck and don't be a stranger.
NETWORTH BUILDERS5236 Reviews - Asheville, NC · Member since 2020 · 36 posts · 6 votes5y
@Wale Lawal
Awesome! Thank you so much! I really appreciate it!
- Real Estate Agent · Las Vegas, NV · Member since 2016 · 32 posts · 31 votes5y
@Victoria Hill
Hi Victoria! Definitely read some good books, including some already mentioned above. When I started (2002), I listened to a CD set a friend gave to me: Carleton Sheets. It was good and helped me to get started. What REALLY got me started was joining REIA clubs. I even joined one 3 hours away from where I lived. Vegas was getting overpriced, so I expanded my investing out-of-state. Ended up with 15 SFH properties. Here's some stuff I learned: 1. Never pay above-market price
2. Learn how to run the numbers. 3. Run the numbers. 4. Run the numbers again. 5. Be analytical, never emotional 6. Listen to advice, then double-check that advice 7. Be wary of some people at REIA meetings. Most are there to help; some are there to prey on you. 8. Build a spreadsheet that covers ALL of the costs of a property before and after purchase. 9. Set boundaries / requirements for each property. If it doesn't meet these requirements, move on. 10. Analysis Paralysis... it does exist. I analyzed for about 2 years before making the jump. All the above, I learned personally, by jumping in and doing. Got a lot of scratches, bruises and even bled a bit. But it made me all the wiser. Go for it!
- Chicago-Texas · Member since 2017 · 30 posts · 26 votes5y
@Gaurav Chaudhari, only sign up with company that the has rating of A to A- (confirm the rating by googling the company) , also make sure to get dp3 coverage and replacement cost and not actual value.
I usually buy properties that are not making decent profit or none at all due to below market rents, most times TLC fixes this issue(Paint, light fixture, faucets). My rent are in the middle, not the lowest or highest this way my turnover is extremely low. Make sure to analyze the rental comps. I think Ben Mallah coined this phrase: Buy a crappy property in a good area, because you can always update the property but can't do much with the area.
Lot of people will offer you to buy into their system/turnkey, I am not a fan of this idea. I like doing my own due diligence and enjoy the challenge.
Finally I like some of the content from Clayton Morris has posted, especially on heloc, leveraging credit card.... I personally have done six figure rehab projects using my credit card with zero% interest. Do not buy into his program, he is getting sued for ripping of quite a few people. I think he is still selling turnkey properties.
- Flipper/Rehabber · Pittsburgh, PA · Member since 2018 · 22 posts · 36 votes5y
@Victoria Hill I first started out in real estate part time in 2018. I was working as a commercial carpenter and my wife and I did two flips that year in our free time. Later that year, I severely injured a disc in my back and couldn't do construction anymore. My company fought my workers comp claim and I wasn't getting paid at all, so I went full steam ahead into real estate full time in January of 2019. Since then, we've flipped around 12 homes, wholesaled over 10 properties, and bought 5 rental properties. I've also done a couple million as a real estate agent since I got licensed in March of 2019. I literally had a negative net worth 2 years ago, and in about 20 months have been able to flip that to over 600k in net worth. I had no idea what we were doing when we first started, and immersed myself in as many podcasts, books, and trainings as I possibly could. I attended every single local meet up I could make it to, networked with everyone I possibly could, but most importantly just got past the fear of failing and took massive action. I absolutely love real estate and as they say if you do what you love you never work a day in your life. Anyone and everyone is totally capable of making big money in real estate and being able to do whatever you want. What really separates the people that succeed and the ones that don't is mindset and action. All the other pieces will fall together the more experience you get. I've made tons of mistakes (thankfully haven't lost money), and plenty of bad decisions. It definitely doesn't happen overnight and isn't easy, but it's 100% worth the effort. Not just the money, but the personal satisfaction of knowing you built something yourself and have succeeded, I could never go back to working a regular job. Bigger pockets is honestly where it all started for us, and everything you could possibly need to know is on this site, or in the books the members have published.
I just have to reiterate though that mindset is everything!!!! Once you get going, all the little details are actually the easy part. Best of luck!
- Asheville, NC · Member since 2020 · 36 posts · 6 votes5y
@Khalid Bryan
Wow, thank you for that! Definitely will keep that in mind!
- Asheville, NC · Member since 2020 · 36 posts · 6 votes5y
@Terri Haley
Awesome!!! I appreciate it so much Terri! Im really excited about real estate and can’t wait to see how it all goes!
- Asheville, NC · Member since 2020 · 36 posts · 6 votes5y
@Dustin Singer
That’s so great and really inspirational! Stuff like that makes me so eager to get the ball rolling! It’ll be tough but I know I’ll push through!
- Real Estate Agent · Austin, TX · Member since 2016 · 96 posts · 69 votes5y
When I started out in real estate I was 19 and reading one of the books Brandon Turner wrote. I had no money besides a little savings, living at home with my parents, and knew one day I was going to be in real estate. I did real estate school online at night after my normal job, and eventually got my license 3 months later. I started a driving for dollars mailing list and sent letters. I did that for a while, but didn't close any deals (came close though). I was also making phone calls to try and find some good deals. I figured since I was also a Realtor if I couldn't purchase their home I could offer to sell it for a commission.
Long story short I had no money, but got good at finding good deals and partnering with others. Because I was able to get deals I had multiple people offer me financing and in return I partnered with them on the deal. This was my strategy when I was ages 20 to 22.
Having the drive and finding the deals is how I was able to go from washing cars in the hot sun for money to owning a successful real estate business and working from home full time :)
Don't get caught up in the "how" stage, and instead focus on "doing" things and tracking your progress to see what works.
Good luck!
- Flipper/Rehabber · Phoenix Arizona · Member since 2020 · 1k+ posts · 686 votes5y
Keep picking everyone's brain here on BP.
Get a great Agent to work with.
Get a great contractor that is R.E savvy!
Vote right, no more Covid! No more Mask!!
Freedom.
Look at properties to get an idea of your area and prices!!!
- Asheville, NC · Member since 2020 · 36 posts · 6 votes5y
@Andrew Frowiss
Loved that story!! Thank you Andrew! There are times when I get discouraged about it but lately I’ve been more confident, especially being on BP and retaining all the information I can! I would love to keep hearing from you and about your progress!
- Asheville, NC · Member since 2020 · 36 posts · 6 votes5y
@David Avery
Alright will do! Thank you so much!
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