Rockford, IL · Member since 2021 · 7 posts · 16 votes
So I am a 27 year old single dad looking to begin my lifelong journey of my passion I've always thought about going forth with it but now is the time I would like any help or advice as to where to begin I have strong skills with being able to fix anything in the house I have many years of Maintenance experience and I know I probably will have to buy and sell a few homes before I can buy then rent but I would greatly appreciate any ones advise as to where they may have started and what was successful for them or what I should not mistakenly do I have the passion and the drive I just needed a hand I am currently working with $10,000 sitting in my savings and a credit score in the 700 range PS I'm in Rockford Illinois
Real Estate Investor · Unadilla NY · Member since 2017 · 418 posts · 297 votes
5y
If I could go back to being 27 I would not have bought a big house to start. I would find a property where I could house hack - my meaning of house hack means purchase a property and rent half of it out so your cost of living / cost to have a roof over your head is very small or next to nothing. That will really help you save. Ideally this property could be one where I could "live in flip" meaning I would do the work over say a 2 to 3 year period a little at a time until finally I added more value to the home and can sell it tax free ( talk to an accountant - I am not an accountant ) and then do the same thing all over again. This will help you get money. You will need money - alot of money -to be successful in the game. Yes it can be done with little to no money down but it is very difficult to get anywhere using these types of strategies. Definitely possible, but it is infinitely easier especially in this market to have money and make purchases and repairs needed.
If you do that a few times you will only be around 35 years old and should be sitting on a pretty sizeable nest egg to invest with, where you can have an LLC and put 20% down on future properties no problem. Putting 20% down allows you to not pay for PMI which is a small leech on your income for a long time.
Where I am now for reference is I did the American Dream thing, bought a large house I have too much space for and although I have built equity over the long term by paying the mortgage I would probably be retired now if I did the live in flip process instead. Why I think this would be a great strategy for you is because you have 1) time and 2) you say your handy with fixing things.
Also like Tim mentions go to the club and meet with people that have experience who may have properties that they want to offload because they are at a different point in their life where 1000 / m isnt that exciting anymore but selling a property and traveling around the world for a couple years is. You could get a good deal that way or just listen to stories to learn things and get contacts. If you hate it you don't have to show up ever again but to not spend a couple hours to find out would be a bad investment.
Rental Property Investor · Caledonia, IL · Member since 2015 · 289 posts · 213 votes
5y
Randy welcome to the grind. My suggestion - buy a duplex and live in 1/2. Settle in / repeat. SFR way too costly at the moment, plus its a great way to add doors quickly. Also a monthly meetup at Sams on Riverside this Monday @ 6 pm. Best wishes moving forward!
Welcome to the community! You have a good head start with your maintenance background which can help you with the properties that need work.
Before you get started, know why you want to get into real estate investing? Are you interested in cash flow or appreciation? Do you need immediate cash flow or can it wait? What is your appetite for rehab? This is going to be your guide throughout your roller coaster journey and will keep you looking forward through the good and bad days. After you know your why, work backwards to establish short-term and long-term goals to help you accomplish your why.
Understand what to you constitutes a great deal. This is typically a personal decision and can include specific returns you want to see from a deal. This will also help you stay focused and to not give in to a make a bad deal work.
One of the most important skills of an investor is deal analysis. You will want to practice analyzing deals everyday, even if you don't plan to buy yet. This skill is invaluable and a perishable skill.
Continue educating yourself everyday as there is too much information to learn in a short amount of time. Know that mistakes will be made, but the great thing about real estate is that over time and if purchased right, many mistakes can be mitigated or overcome. Don't be afraid to make the leap. Analysis paralysis can and does stop many from moving forward. Some of the best learning comes from jumping in and figuring it out.
Financials don't have to hold you back. There is always financing out there if you can find the great deals.
Real Estate Investor · Unadilla NY · Member since 2017 · 418 posts · 297 votes
5y
If I could go back to being 27 I would not have bought a big house to start. I would find a property where I could house hack - my meaning of house hack means purchase a property and rent half of it out so your cost of living / cost to have a roof over your head is very small or next to nothing. That will really help you save. Ideally this property could be one where I could "live in flip" meaning I would do the work over say a 2 to 3 year period a little at a time until finally I added more value to the home and can sell it tax free ( talk to an accountant - I am not an accountant ) and then do the same thing all over again. This will help you get money. You will need money - alot of money -to be successful in the game. Yes it can be done with little to no money down but it is very difficult to get anywhere using these types of strategies. Definitely possible, but it is infinitely easier especially in this market to have money and make purchases and repairs needed.
If you do that a few times you will only be around 35 years old and should be sitting on a pretty sizeable nest egg to invest with, where you can have an LLC and put 20% down on future properties no problem. Putting 20% down allows you to not pay for PMI which is a small leech on your income for a long time.
Where I am now for reference is I did the American Dream thing, bought a large house I have too much space for and although I have built equity over the long term by paying the mortgage I would probably be retired now if I did the live in flip process instead. Why I think this would be a great strategy for you is because you have 1) time and 2) you say your handy with fixing things.
Also like Tim mentions go to the club and meet with people that have experience who may have properties that they want to offload because they are at a different point in their life where 1000 / m isnt that exciting anymore but selling a property and traveling around the world for a couple years is. You could get a good deal that way or just listen to stories to learn things and get contacts. If you hate it you don't have to show up ever again but to not spend a couple hours to find out would be a bad investment.
Hi Randy, It is good to hear a young man with goals. It is good that you are here and good you want to learn. I have a 3 sons and they all started about your age. The best advise I can give you is what i gave them, and that is to start off house hacking. That means to buy a house - preferably a 3-4 unit property- that needs work that you can buy, live in (having positive cash flow) and rehab it creating equity. You can do this as an owner occupant and have the lowest down payment with the best rate. Once that project is complete, do another the same way. This builds equity and cash flow to move you to the next phase of your business.
Rockford, IL · Member since 2021 · 7 posts · 16 votes
5y
I greatly appreciate everyone's help and advice! What mainly stuck out to me through everything is buying a multi-family home / duplex. Now I have looked on Redfin and Zillow and never seem to find any is there a back door to those types of properties an app or website or are they just that hard to find also as far as pulling a loan for something like that is that something I would be able to pull a first time home buyers Grant and stuff like that would I be able to pull a typical loan and also what is best pulling a 15 or 30 years? And for sure I will be looking into the club I didn't know there was clubs in meetings for this in my area glad I jumped on here and found this information out
Rental Property Investor · Member since 2021 · 335 posts · 193 votes
5y
@Randy Ray
Hi Randy,
Fellow investor here. I got started by just jumping into it. Probably not the best move, but i learned so much along the way. I’m up to 5 units now. I recommend picking 1-3 real estate investment books, read biggerpockets and watch real estate videos. Then just jump in once you identified your risk strategy, investment thesis, etc.
Rockford, IL · Member since 2021 · 7 posts · 16 votes
5y
@Chris Youssi
I've heard of buying duplexes being the best option what is the best way to find duplexes that are for sale I've looked on Zillow and Redfin and nothing shows up is there a back door app or website to those kinds of properties. Are there any types of special loans grants that I can pull for a property like a duplex and also since I've yet to purchase my first home would I be able to use a first-time home buyers Grant . is there another day that you guys meet at Sam's on Riverside I would love to be a part of it Monday is my one day that I would not be able to
Rockford, IL · Member since 2021 · 7 posts · 16 votes
5y
@AJ H.
I would say the reason for me getting into real estate is looking for a career / Hobby because it's what I enjoy I'm looking to do it full-time eventually and as far as my appetite I'm starving to get into investing in real estate I know I must get my feet wet before submerging myself but either way eventually I'd like to have multiple houses no longer have to work a nine-to-five and be able to know that I can pass down what I've created for my daughter for her to be able to take and make even bigger as she gets older so on and so forth.
Lender · Tucson, AZ · Member since 2016 · 20 posts · 7 votes
5y
@Randy Ray Hi Randy! Look into house hacking a small multifamily! FHA loans will bring your down payment down and if your numbers are right and your market supports the price the tenants could cover your mortgage, insurance, taxes and PMI! There's a ton of info on bigger pockets on how to do it. I'd you have any questions feel free to reach out! After you find and analyze a deal post the deal to get some extra eyes with a detailed description before you close. The community here including myself would be happy to look it over! Good luck! -Mark
Realtor · San Antonio, TX · Member since 2017 · 64 posts · 35 votes
5y
@Randy Ray I'm in Texas and I started my real estate journey by house hacking. I used owner occupied financing (3.5% down on first property, 5% conventional on the 2nd and a down payment assistant program on my 3rd. I got into each house with less than $5k out of pocket, not including rehabs). I had roommates and bought properties where I could use part of the house as a short term rental. I like the suggestions others have of buying a small multifamily. You might be able to use 3.5% down FHA on 2-4 units, so you might want to check with some lenders in your state. If you want details on any of those financing options, I'd be happy to share what I know, then verify with your lender if it'san option in your area.
Rental Property Investor · Belleville, IL · Member since 2017 · 875 posts · 529 votes
5y
Join your local REIA. That is the best bang for your buck when it comes to learning from some local mentors. In your area that is the Rockford Apartment Association run by Tim Jensen. I spoke at their club a few years ago and hope to do so again. Want to get inside and upfront? As soon as you join VOLUNTEER to help. That breaks the ice and gets the ball rolling.
Rental Property Investor · Tacoma, WA · Member since 2021 · 4 posts · 3 votes
5y
@Randy Ray Listen to the Bigger Pockets Real Estate Rookie podcast. There’s about 50+ episodes currently. And continue networking here on bigger pockets like you are. I’m sure in 1 month you will have much more clarity on what strategy will be best for you to get started.
Rental Property Investor · Canton, OH · Member since 2020 · 58 posts · 22 votes
5y
@Randy Ray buy a small multi family home live in one part. You have enough for an FHA 3.5 mortgage. Could probably get up to a 150k property with what you have which I suspect may be available in Illinois?
As far as finding a multi-family duplex where would you say is the best place to look as far as apps and or websites Etc
@Randy Ray I would have an agent set you up with a mls search once you have defined your criteria (where you want to live, unit mix, amenities) and have them do the work. I would also create a free account and set up alerts on LoopNet. You can also become a marketplace member on bigger pockets and I believe that allows you to see what people have to offer as well but I haven’t used that Avenue yet. Between these you’ll be covered enough. I’d say if you wanted to be proactive you could call a title company get a list of your criteria and send mailers or scrub lists for contact info but that’s a lot more involved. I have a W-2 job so I have to be choosy with my time but maybe you are different and can do those things. There are a lot of resources on wholesaling too if you wanted to take the second route. I would just advise you to know your market well and find an agent that will look at these properties as a cash flowing investment as opposed to a primary residence/just another purchase. The best way to do that is use bigger pockets and look for an investor agent. They are probably pretty well connected too if they have been at it for a while. Hopefully this gets your started brother! 🙏🏼
Real Estate Agent · Chicago, IL · Member since 2020 · 25 posts · 16 votes
5y
I also strongly recommend doing a house hack and getting some cashflow while living for free. It will give you great exposure to all parts of your real estate journey. If you want to jump in all the way as well, you can do a FHA 203k renovation loan in which you will get contractor experience, a good understanding of materials and labor costs, creating a scope of work, getting bids, and design experience.
This is how I jumped in with my first multi-unit property in Chicago and I may not be a pro, but Im much more experienced than simply reading and learning about it. I’m already looking to do my next one.
Message me if you do go this route and I can tell you about my deal and experience.
I've heard of buying duplexes being the best option what is the best way to find duplexes that are for sale I've looked on Zillow and Redfin and nothing shows up is there a back door app or website to those kinds of properties. Are there any types of special loans grants that I can pull for a property like a duplex and also since I've yet to purchase my first home would I be able to use a first-time home buyers Grant . is there another day that you guys meet at Sam's on Riverside I would love to be a part of it Monday is my one day that I would not be able to