What's going on!
First thing, THANK YOU IN ADVANCE!
I'd love some advice from anyone about which strategies I should consider for getting myself into real estate investing. I'm 28 & Married with 3 kids. I don't see many guys or galls like myself with advice for my situation, but if you do or can offer me some insight I would appreciate it very much.
Thanks for the help ☺️
@Jonathan Dunn Before getting into real estate, you should ask yourself few questions including:
- What is my why in investing in real estate?
- What goals do I need to accomplish the why?
- Am I investing for cash flow or appreciation?
- What returns am I looking for?
These questions will help you get set on the path to find properties.
Best of luck!
Learn the market in which your interested in investing so when a deal comes up you have confidence that its a good one, you can do this by looking at zillow daily in that market or getting on a realtors mls listing. Speak to a bank or like a rental property lender like Liam one capital and get all your docs in and get pre approved so your ready when a deal come along. If i was you i would also put the deal that your buying on this website with a condition like inspection or financing so you can back out if needed to get others opinions and if all looks good. Close rehab and rent( use this site to help with those topics too when your at that stage) repeat the process again once done the first and try to get some cash out of the first property towards all or some of your next property down payment
Hi @Jonathan Dunn ,
Scott and AJ both have some good advice. Here are my thoughts and questions I'd ask myself:
Do you currently own or rent?
Are you comfortable with potentially "roughing it" for 1-3 years in a property that may need a little work, but will appreciate and potentially turn into a rental property? I know you have a family of 4 others to consider, but in California depending on circumstances, it can be a challenge to get into the market. A househack might work in this situation, find a duplex with one unit that you live in and rent out the other to lower your monthly expenses. California has good appreciation, and if you find the right duplex, you could be cashflowing after the first few years, you then move out and repeat the process or just find yourself a home to live in.
Hope this helps and provides some options for you.
I'd say ask yourself how involved you want to be in real estate first. If this what you think about all the time and you're passionate about it. I'd say try to start your own business like being an agnet or wholesaling. If you want to be an investor and be hands off. I'd go with the out of state investing route and buying turnkey or at least buying properties that are managed by other firms.
@Jonathan Dunn - You are well on your way already by joining and posting on BP! few years ago this wasnt an option and people did this the more traditional ways.
Real Estate is a vast field - Lending, Development, Property Management, Fix/Flip, Consulting, Buy and Hold, Syndications etc. For someone just starting out, I would personally recommend joining a Commercial Real Estate Brokerage or a Development firm in whatever capacity you see fit. Gaining experience and networking is the key to the business. Commercial space is a lot more lucrative with huge potential. Do not get me wrong, Residential is less risky and has potential as well but it is safer and a lot smaller deals compared to the commercial.
Thanks for the insight. Asking myself those questions definitely helped me get some perspective.
Thank you for the suggestion I really appreciate it.
I definitely would like to hands off eventually, but would like to start with wholesaling so I can leave to source my own deals.
Thank you. I've considered a duplex but what I've found in my area are expensive units in not so good neighborhoods. I'll keep looking because I would take advantage of that method if I can find something.
Thank you for all the suggestions!
@Jonathan Dunn Welcome to BP! I'm a little scatterbrained, so bear with me... I just finished listening to Show 75, and they guest said "Real Estate Investing is not just one niche. Sure you can have a specialty, but the investors he knows do not stick with one thing", I said that to say, listen to the podcasts. Learn as much as you can about all facets of RE. Learn to analyze deals. Network. There are several people who will tell you that a deal was handed to them through someone they knew, who knew they were an investor. I am 35 with 3 kids and little money. I have found at least 6 deals in the 6 weeks I have been learning, that fit my criteria, but due to lack of funding, I missed my opportunities. It was suggested to me that Wholesaling would be a better route for me to raise capital as well as network. So that is my focus, but I still look at every opportunity from every angle to see what strategies could be used, how to exit, and how the numbers work. Numbers are the key to every deal. Go on zillow, redfin, realtor... pick a random property where you live and use the BP calculators to analyze it. Learn what each number means and how it affects the final outcome, and create a spreadsheet that will tell you if you should go for it or not, compare to BP calculator, then make a decision. It's not easy by any stretch of the imagination, but with dedication, you can do it!!!
Thanks for the encouragement Rob. I'll check out that episode on the podcast. Are you looking at deals in your market or out of state?
@Jonathan Dunn Mostly in state. I live in Illinois. Everything I have found so far has been off Zillow, Redfin. Or realtor.
I do analyze deals in other areas, but since I’m not necessarily interested in them, i use them to keep my chops up. As I’m new, my criteria is lower than most. I look for 6% cash on cash return, $100 per door per month among others. I over estimate expenses and use rentometer to set my rents in the lower percentile. If the numbers are close, then I know I’m golden. Hardest part for me is financing. I met a few hard money people, but the numbers don’t work most of the time because of the high interest. 10-14%. That is why I am taking a wholesale approach and hopefully within the next 60 days, will have done my first deal. Where are you looking to invest?
1. Double your renovation estimate on your first rehab
2. Double your maintenance and CapEx expenses on your first long term rental
3. Don’t take on risk you can’t afford
If the numbers still work you might be good.
I’m a few years older than you but I started investing when my kids were 4 and 6 months! One of the things I love most about the career is the flexibility it allows for family time.
I started as a flipper, and still consider that to be my main focus, though I am slowly adding rental properties to my portfolio when they don’t quite make sense as a flip.
I think this is a wonderful and flexible path for someone with a young family! I’m happy to answer any questions about how to make it work with little ones.
@Jonathan Dunn I’ve recently added a property that’s about 30 minutes away from my home to my portfolio. It’s a well maintained property and the current tenants are great, so I can check on it 2-3 times a month. However I think the most important thing is my time. I might look for a better cash flowing deal if I went further away from home for another property as this one cash flows about $100 per door after expenses.
I’m currently house hacking which I’ve always done as for 24 years I owned two bed and breakfasts. However I’ve downsized to a duplex. It has appreciated by about $120,000 in the past 2 years which no one would have predicted but you can find that some places in California too. I rent the other side to a tenant a little under market value for the peace of mind that he does not disturb me and takes care of my property. I’ve known him for years and he will likely live there forever.
There's many ways to get into real estate, house hacking is one of my favorites. If I didn't have a lot of money I'd put aside absolutely as much as possible into a high interest savings account each month and save up a down payment for a 3.5% FHA down payment on a house I could refresh a bit, but not too much in about two or three years then turn into a rental while I saved up another down payment for my next two to three year live in then turn into a rental home and keep doing it.
Or else buy 3-4 unit multis and do the same thing where the income from the leases on the units can be counted toward your income necessary to qualify for the mortgage as long as you have the down payment.