Getting Started and How to Find out what direction to go in

4 Replies

Hi All,

I am a new investor and have a few questions that I would greatly appreciate having answered.

We are in a great market right now. I feel like I'm actually picking a not so opportune time to get into buy/hold investments.

my goals are $100,000 in gross rent per year in 10 years.

I plan on making 10-12 purchases and holding. I will be using much of my income to help pay off the properties as closer to that 10 year mark. I plan on having the money all at once before I pay off an individual property and then sort of snowballing into the next property.

My market is HOT. It's doing great and I get a little nervous about buying and holding.

As for now, I am thinking doing 20% down on a 30yr.

I understand the argument of "who cares if you buy now or in a recession when you are looking at holding for 10 years/15yrs/30 etc.".

What are your thoughts? Would it be better to wait for another correction? Would it be better to hedge and buy a couple per year?

Thanks for any advice!

Originally posted by @Blake C. :
Hi All,
my goals are $100,000 in gross rent per year in 10 years.Would it be better to wait for another correction? Would it be better to hedge and buy a couple per year?

Blake, if you try to time the market you may find yourself waiting indefinitely for the "right time" to invest. Tomorrow may never come.

If your local market is getting overheated (i.e. overpriced), start looking for another market that fits your investment criteria. By the way, do you have any criteria beyond gross rent?

Continue to educate yourself about real estate investing, network like crazy with other investors and join your local REIA. Soak up as much knowledge as you can and build your real estate investing team of experienced professionals. Tap into their expertise and knowledge of your real estate market to avoid making rookie mistakes.

Establish your own investment criteria. Pick a market, learn a market, do your research, run the numbers, etc. Once you have a solid foundation about what to look for, what to avoid, etc., you can then go looking for the type of real estate that will fit your criteria and help you reach your financial goal. But waiting for another correction? Nah, man, that's for the birds.

"Inaction breeds doubt and fear. Action breeds confidence and courage. If you want to conquer fear, do not sit home and think about it. Go out and get busy." - Dale Carnegie

@Eleena D.

Thanks Eleena,

I was just using Gross rent as one criteria. There are still many people buying in my market to rent it out. One of my main concerns is trying to figure out how to know a market in other markets. So I guess my two main concerns now would be, am I in the right market to invest, and if not, how do you read and determine whether a market is a good one to get into?

Thanks!

Eleena de L. .

First off, Hi Blake it's nice to see that you've found bigger pockets. Although waiting until the market drops off and housing crashes again (notice I said again because we're in a bubble from what I'm seeing) might seem like a great idea, it's going to slow you down because waiting to time the market will make you miss out on a lot of great deals right now. If you're going to be in the game for the long haul I think you need to learn how to create wealth in any business cycle the market is experiencing. I think the key is too watch what a lot of people are saying (these people are not savvy investors, but folks caught up in the euphoria of "good" times or melancholy of "bad" times) and do the opposite.

As for your acquisition strategy, I think that if you can get bank financing that's great, but don't forget about all the great cash flowing rental opportunities that can be acquired via creative transactions with motivated sellers that need help. Subject tos, seller financing, lease options (see local laws), and more! Easier said then done however!

Always remember the wise words from the oracle of Omaha: "Be FEARFUL when others are GREEDY. Be GREEDY when others are FEARFUL."

Mr. Buffett has a darn good head on those shoulders.

@Blake C.

Welcome. Time to build the foundation below Consider adding Niche or Specialized Housing as a way to generate more cashflow.

Check out the Start Here page http://www.biggerpockets.com/starthere

Check out BiggerPockets Ultimate Beginner's Guide - A fantastic free book that walks through many of the key topics of real estate investing.

Check out the free BiggerPockets Podcast - A weekly podcast with interviews and a ton of great advice. And you get the benefit of having over 70 past ones to catch up on.

Two Great reads, I bought both J. Scott The Book on Flipping Houses,The Book on Estimating ReHab Costshttp://www.biggerpockets.com/flippingbook

Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and all the cash buyers (rehabbers) you will need.

Good read The Real Estate Agent's Ultimate Guide to Working with Investors

http://www.biggerpockets.com/renewsblog/2013/08/24/real-estate-agents-working-with-investors/

You might consider Niche or Specialized Housing like student housing or vacation rentals. Rents can be 2-4 times more. Remember you don't have to own a property to control it.

Download BP’s newest book here some good due diligence in Chapter 10. Real Estate Rewind Starting over

http://www.biggerpockets.com/files/user/brandonatbp/file/real-estate-rewind-a-biggerpockets-community-book

Good luck

Paul

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