Newbie Questions Help

2 Replies

So admittedly I'm a newbie at this, and I'm not afraid to say it but I'm not afraid to learn and roll up my sleeves.  I have a few quick questions.

1.  What is your favorite book/blog/vlog/podcast that describes the math involved with Real Estate? 

2.  How did you come up with your criteria for the first house you purchased?  This still seems magical to me, as no one has been able to give a clear precise method of making these decisions. I'm an engineer, and so I'm hoping that the answer to question 1, will help with question 2. I'm methodical and need reasons. I know its a personal decision, but I need to know what to avoid and how the math works.

3. What was your biggest fear when you first started, and how did you overcome it?

Cheers

Linda

Hey Linda,

1. The Book on Estimating Rehab Costs by J. Scott

2. Depends on your end goal... I know its not the sexiest answer but in my opinion, its the ONLY answer... Everything you do should be a piece to the puzzle that you want to complete 10,20,50 years down the road...

That being said, I think house-hacking is the best strategy for a newbie... you will gain the acquisition experience you'll need for each transaction so that you know the ins and outs of how deals get done. 

If you house-hack a multifamily property, you'll gain property management experience..

You'll gain asset and project management experience... from learning to keep track of your numbers (which you're on your way to do since thats related to your 1st question) TO managing a rehab.

3. Biggest fear was making a huge mistake and losing money (which I did anyway haha)...Best way to overcome it is to educate yourself and learning to look at fear as a good thing. If you're afraid of the next step (i.e. seeing a property, submitting an offer, evicting a tenant, etc), its probably a good thing... push passed those fears by finding a way to get things done!

You have a great community here on BP to reach out to help you throughout your journey... Also, you have all the educational tools you need on this site... Aside from BP, go to local REIA meet-ups, find local investors and pick their brain!

Best of luck to you!

-Abel 

@Linda R Harley

Welcome to BP

1: This one What Every Real Estate Investor Needs to Know about Cash Flow ...And 36 Other Key Financial Measures. I refer it probably weekly. The math isn't hard, its the rational that matters. Don't expect to being doing any Fourier transform to buy properties. Also don't underestimated the subtleties in the simple math either. Making unfounded assumptions can have out sized impacts.

2. Only you can answer that. I started with why I wanted to invest in Real Estate, set Longer Term goals to fulfill that why and reverse engineered from that. If I need x in cash flow by 20xx, then I'll need y units making $z.00 per month post tax, I need to buy 'n' properties per year on this schedule( which doesn't have to be linear).  After that its solving the problems that pop up to stay on track.

What kind units? Depends on your capital, but really your time, personality, skill set, abilities ect.  

Does it all have to be the same type of unit? I don't think so. 

3. Not buying the best deal out there and/or making a mistake. I educated myself and set my criteria. Once I found a property that fit my criteria I had to take that first step and have faith in my education and problem solving abilities. 

Good Luck!

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