How to start real estate investing

Question

So I make $2,200 a month at age 22 from my day job. And have about 100k saved up from previous investments(non real estate). What’s the next move to buying first rental property and how much could I afford? Currently living in Hawaii but am not shy to buy a property in a different state if it is a better choice to start out.

Carlos Kishek · Answer

Hey @Mike Gotti so I would recommend getting in touch with an agent in the area your interested in investing. I know of a lot of real estate investors that invest Hawaii so why not stay local! But from there they will help you get prequalified and figure out how much you can afford. If you need help finding an investor specialist agent anywhere in the US I would be happy to put you in touch with one. Just reach out!

Mike Gotti · Answer

@Antonio Cucciniello goals is to create a cash flow/passive income. Buy rental properties and let tenants pay off the house while gaining income from the properties. Create wealth.

Antonio Cucciniello · Answer

@Mike Gotti

Awesome that you have that much saved!

One thing that would help me give you better advice here would be what are your goals with investing?

Not knowing that, I would recommend you find a cash flowing market around the US. Do a regular 25% down payment. Learn the process, and then use the remaining capital to BRRRR your second property so you can learn.

As to how much you can afford I think is not the best question to ask, instead I think you should be asking where can I place my money for the highest return on investment!

Aaron W. · Answer

@Mike Gotti Welcome to the community!

Before you get started, know why you want to get into real estate investing? Are you interested in cash flow or appreciation? Do you need cash flow now? What is your appetite for rehab? This is going to be your guide throughout your roller coaster journey and will keep you looking forward through the good and bad days. After you know your why, work backwards to establish short-term and long-term goals to help you accomplish your why.

Understand what to you constitutes a great deal. This is typically a personal decision and can include specific returns you want to see from a deal. This will also help you stay focused and to not give in to a make a bad deal work.

One of the most important skills of an investor is deal analysis. You will want to practice analyzing deals everyday, even if you don't plan to buy yet. This skill is invaluable and a perishable skill.

Figuring out rents are localized to every market and neighborhood. BiggerPockets has a tool to get an estimate on rents. There are also other online resources to do the same with a popular one being rentometer.com. A property manager in the market you are interested in investing in will be an excellent resource as well.

There are many ways to finance a rental property including traditional bank financing, seller financing, hard money, private money, partnerships, other investors, etc.

Continue educating yourself everyday as there is too much information to learn in a short amount of time. Know that mistakes will be made, but the great thing about real estate is that over time and if purchased right, many mistakes can be mitigated or overcome. Don't be afraid to make the leap. Analysis paralysis can and does stop many from moving forward. Some of the best learning comes from jumping in and figuring it out.

Good luck!