What to look for in a first investment?

Question

I am currently looking to start investing in the Atlanta area. As a recent graduate from masters program I have class room experience but no real world experience.  What would be the best place to start I am currently looking at single family homes to up to 8 unit complexes.  If any one had any advice or suggestions I would love to talk about real estate investing.

Joe Villeneuve · Answer

OK.  You're not going to like this, but that Masters degree in RE, and the "helper" in finance, isn't going to mean much in the real world of REI.  You're classroom training is going to give you a lot of basic "basics" on RE...mostly surrounding the legal aspects and the processes.  The finance part will teach you very little for REI.  Can you use any or all of what you learned?  Yes?..but, it will cover maybe 5% of what you need to know.

Here is what you need to learn...all three are equal in importance.  Treat any one of them as the "ugly stepchild", and you lose...and will never know it:

1 - How Money Works...and I can guarantee this has nothing to do with what you were taught in school.

2 - How to Analyze Markets...not properties.

3 - How to design a REI Plan, with focus on your financial goals (personal needs).  This is where that 5% mentioned above comes in...maybe.

REI is nothing at all like the stock market.  REI success is based on thinking outside the box, then increasing the size of your box.

Joe Villeneuve · Answer

Yes.  That refers to the different ways of using the different forms money can take as it moves through the deal.  Notice I said, "moves through the deal"...not "stops there".  There are many, many ways to move money...far more than the basics that are usually discussed on this (on most) discussion platforms.  All more profitable to the REI, but not all applicable to every deal...which is why you need to know as many as you can.

Derek Harris · Answer

Alex, you're at the right place. BiggerPockets has a lot of great resources. I recommend reading one of their books in order to get a primer on the different facets of REI. Additionally, I would listen to as many of BP's podcasts as you can. They have a ton of actionable advice. Also, I would join your local REIA and try to network with as many RE investors as possible.

Alex Nunner · Answer

I assumed so thats why I'm looking for a place to start. I recently have turned 21 and am looking to learn as much as I can. What do you mean when you say "How money works" is that regarding financing?

What to look for in a first investment?

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