What steps to take to start real estate

18 Replies

If you're an aspiring agent: Get your license and become an assistant at a brokerage. If they're not hiring for assistants, ask about internship. That's the best way to learn, according to Graham Stephan. I'm 20 and in your shoes. Going to pull the trigger on this.

Network with other investors and figure out what others are doing in the market you want to invest in. Make sure that your market meets your goals. Do you want cash now? Invest in cash flowing markets. Let me know if you need help clearing the mud. :)

I know this isn't the most exciting of answers, but when you do decide to pull the trigger on a property it's really helpful to have your tax documents, pay stubs, and bank statements scanned and uploaded to Google Drive in advance. 

I'd start meeting with agents now and start building that relationship. I had been talking with my agent for a couple months before deciding on the house I wanted, and since she had worked with the listing agent before, she was able to get my offer priority. So make those relationships now! It could make the difference between whether or not you get the property you want.

You'll probably need more cash than you think for the first property. I was eager to start investing too, and it's easy to forget you'll also need cash for inspections, deposits, closing costs, on top of any personal life things that come up. Your car might need new tires the same day the down payment comes out of your checking account, and that's just a lot more stress than you need haha.

Best of luck!

@Crispin Wong the more you read into RE, the more you'll hear about house hacking. Don't know what you're current living situation is but if I were to go back in time when it was doable for me, I would most definitely house hack. Purchase a property, like a duplex perhaps, with a low money down FHA loan. Live in one of the units and rent out the other to try and cover as much of your living expenses as you can. By law you have to live in the property for a year before moving out and obtaining another property. This is the best way I think for someone new to get into RE investing. Good luck and good for you for being motivated to get started.

@Crispin Wong You're welcome! 

I'd say keep enough cash to last 6 months without a paycheck for personal use. 

For RE purposes, maybe an additional 5K-ish on top of the down payment for any surprises that come up. If 15-20K can cover both of those, you should be good.

Buy a property to live in first and house hack it. Much lower down payments for owner occupied property (sometimes 0% - 3%  down with certain government programs).  Rent a room or two to others, or better still, if you can buy a 2-4 unit with the same down payment, live in one unit and rent the others. 

I was in this same boat not long ago. I decided to "house hack" and quickly realized how beneficial it truly is. There are episodes on the bigger pockets podcast that can help further educate you. There is a few book and tons of youtube content as well. Educate yourself until you feel confident enough to take action. Best of luck!

@Crispin Wong

Ask questions here on BP. Listen to The BP podcasts.

Get your credit going as a younger person one of the tougher parts of qualifying for a loan for me was I didn’t have long enough credit history. There are tons of blogs and YouTube about how to get your credit established and up.

As stated above having 6 months of living expenses sabe outside of investing is a gear and safe place to start.

Get a job in whatever part of RE that interest you, save as much money as possible, learn as much as you can. 

@Crispin Wong

Definitely invest in your mind first, buy some books such as BiggerPockets "the book on rental property investing" "Managing Rental properties" " The BRRRR Method" etc. I the worst thing you can do is make a bad deal right out of the gate because you weren't educated enough on how the math works