Real Estate path to begin with?

Question

I am going to begin my real estate journey in the next month after we finalize a cash out refi on our personal property. Initially, I wanted to do buy and hold, but as I do more research I am finding that beginners should start with wholesaling and flipping. I am also concerned about the eviction moratorium being extended to September. I currently have a full time job which is not flexible so I’ll be relying on my husband to do the networking and make connections since his schedule is more flexible. I am looking for advice from experienced investors, any suggestions as to what avenue of real estate we should begin with?

Brad Hammond · Answer

Hi @Lynn Anthony.  Congrats on starting investing!  I personally don't agree that investors should start with wholesaling or flipping.  If part of your investing strategy is finding off-market deals and doing a lot of rehabs then yes, that makes sense.  If not, you should start with a small property and grow from there.

The first thing you both will want to do is analyze as many properties as you can to get an idea of returns and figure out what type of property you want.  From there, find an investor-friendly agent and leverage their knowledge and contacts (lenders, property managers, contractors, etc.). Once that is done, now it will just be a matter of finding the right property for you.

Alora Glaze · Answer

To avoid some of the ambivalent directions thrown out to beginners in real estate - your best advice should be to dive right in to make solid real-world connections with a realtor in the REI field, or even a property management company that provide referrals with references. You should be spending time doing research, but don't get stuck in thinking you only have those two options; the most practical advice is to just jump! Crunch your numbers and if the property makes sense - you got this.Get your 'team' or at least a sounding board of support ready. You don't need a home-run project every single time, and you most likely won't get that huge return on a first project either, but if it helps fund the next project - that is a win! You will gain much more knowledge and insight by practical hands-on experience.Staying stuck in 'analysis paralysis' will get you every time. Getting guidance about areas and rental laws will be invaluable in determining your criteria for properties to buy and what strategy to best use.Try joining local Facebook groups for investors or set-up your keywords here on BP where you can be alerted to those posting in your area and what challenges folks are coming up against or what companies/neighborhoods are being recommended.You'll need to be well-versed in calculating properties that work within your parameters - getting guidance may be a great option to start, but it won't take long to build up a network of trusted individuals to bounce ideas off of, or gain further insight on a project with. Sounds like you've got the right person for the job to make those connections - good luck to you both!!

Jonathan Greene · Answer

The advice "beginners should start with wholesaling and flipping" is probably the worst advice I've heard. No one should start with a flip without a background in contracting or an understanding of the entire cost basis of a flip in their area. Wholesaling is the most mismanaged expectation base in real estate. What you want to do is to make connections and attend local meetup online and get to know the players in your local market and find an investor-friendly agent who also invests to help guide you through what options you have to BRRRR.

Lynn Anthony · Answer

@Brad Hammond Thank you for the info. Sorry I should’ve been more specific about the buy and hold but we are looking at the BRRRR strategy.

Real Estate path to begin with?

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