New Investor -- Where do I start?

Question

Hello everyone! I recently got the itch to get into real estate investing after reading Rich Dad Poor Dad (now I am reading How to Invest In Real Estate -- which brought me to this site). I am a young professional (just a couple years removed from college) with limited capital to start. In fact, I am still renting an apartment. So my question is what is the absolute first thing I should do to get the ball rolling? Should I even start investing in real estate while I rent? Thanks in advance for all the insight!

Tommy Watson · Answer

Thanks for the response, everyone. I am pretty much doing exactly what you all are doing now too. Saving more & more money each month towards a down payment. I will begin to analyze deals regularly too.

Bracken Bjorn · Answer

Tommy,

Also following this post. I am 19, a college student working 2 jobs, and discovering a passion for REI as well.

While I am still learning and raising capital for a down payment, I have found it very helpful to max out a Roth IRA each year. The plan is for this money to still be earning interest while I continue to learn about REI and get through college. When I am ready to make my first deal, the principle in the Roth will act as my 3-6 months of reserves.

Hope this helps,

Bracken

Fred Fontz · Answer

Tommy,

I'm following this post as I'm new to the idea of real estate investing as well. I can't speak as an expert, but I can tell you what my path / philosophy is. I'm reading as much as I can. I'm listening to as many podcasts as I can. I'm trying to practice the methods that I'm learning.

I found Bigger Pockets by reading The Book on Rental Property Investing. That got me listening to the podcast which obviously brought me here. What I've seen/heard over and over again is that I need to be analyzing the deals in my market. So, what I've started doing is analyzing the market as if I'm ready for my first deal. Look at the house, estimate what it would cost to get it ready- down payment, closing cost, repairs, etc. Then I look around to see what comparable houses are renting for and use that as my base for income. I lok at that for an idea of what my cashflow would be and if it's worth jumping in.

I don't have the money for a down payment at the moment, but while I'm getting my finances set up, I'm trying to push myself to analyze the market so that when I finally am ready to dive in, I'll have some level of practice in finding the right deal. The last thing I want as a new investor is to fight 'analysis paralysis' because I'm not confident in the numbers I've come up with.

Fred Fontz · Answer

Tommy,

I'm following this post as I'm new to the idea of real estate investing as well. I can't speak as an expert, but I can tell you what my path / philosophy is. I'm reading as much as I can. I'm listening to as many podcasts as I can. I'm trying to practice the methods that I'm learning.

I found Bigger Pockets by reading The Book on Rental Property Investing. That got me listening to the podcast which obviously brought me here. What I've seen/heard over and over again is that I need to be analyzing the deals in my market. So, what I've started doing is analyzing the market as if I'm ready for my first deal. Look at the house, estimate what it would cost to get it ready- down payment, closing cost, repairs, etc. Then I look around to see what comparable houses are renting for and use that as my base for income. I lok at that for an idea of what my cashflow would be and if it's worth jumping in.

I don't have the money for a down payment at the moment, but while I'm getting my finances set up, I'm trying to push myself to analyze the market so that when I finally am ready to dive in, I'll have some level of practice in finding the right deal. The last thing I want as a new investor is to fight 'analysis paralysis' because I'm not confident in the numbers I've come up with.

Michael Gib · Answer

What's up Tommy. I'm in the same boat as you, recently out of college with minimal capital. The very first thing you should do is start researching and studying. Become an expert before you spend a cent on a property and you'll never lose money. I have been learning as much as I can these last 7mons from podcasts, youtube videos, and books (Rich Dad, Poor Dad is a classic btw). So yeah, don't just jump right in, expand your knowledge.