(New Member) Guidance on where to start
Hi, I am a new member who is looking for some guidance on where to start. I have made 1 micro investment at about 3% ownership on a rental property in Gaithersburg at about $400k total value of the town house.
1. I would like to get my real estate license (where and how are the best ways to do this?)
2. I would like to own more properties to rent (where can I look for these?)
3. I have a very low income (how can I circumvent the high down-payments for homes in my area) (not asking for some magic pill but some investor tips or loan advice)
4. I'm 21 and want to make up for lost time (what is something I can start doing today to get me on the path to accomplish my goals)
(any tips on how to improve my posts to this forum)
Quote from @James McCloskey:
Hi, I am a new member who is looking for some guidance on where to start. I have made 1 micro investment at about 3% ownership on a rental property in Gaithersburg at about $400k total value of the town house.
1. I would like to get my real estate license (where and how are the best ways to do this?)
2. I would like to own more properties to rent (where can I look for these?)
3. I have a very low income (how can I circumvent the high down-payments for homes in my area) (not asking for some magic pill but some investor tips or loan advice)
4. I'm 21 and want to make up for lost time (what is something I can start doing today to get me on the path to accomplish my goals)
(any tips on how to improve my posts to this forum)
It takes money to make money. The idea that you can buy a lot of property without investing any money of your own is a pipe dream and a recipe for disaster. A prudent investor works hard, sacrifices, and saves up for their investments. That's not to say it's impossible. You could buy property with owner financing and maybe even find some that won't require much of a downpayment, but those are rare and it's a foolish way to invest.
Applying for a loan requires stable income for 2+ years. Even if you got your license and were successful, you would need two years of income before a bank will loan to you. nearly 90% of all agents quit within the first two years, so odds are you won't earn enough commission to invest anyway.
I recommend you build a strong foundational understanding of real estate investing and go from there.
1. Start with BiggerPockets Ultimate Beginners Guide (free). It will familiarize you with the basic terminology and benefits. Then you can read a more in-depth book like The Book On Rental Property Investing by Brandon Turneror The Unofficial Guide to Real Estate Investing by Spencer Strauss.
2. Get your finances in order. Get rid of debt, build a budget, and save. The idea that you can build wealth without putting any money into it is a recipe for disaster and the sales pitch of gurus trying to steal your money. A wise investor will not try to get rich quick with shortcuts. If you can't keep control of your personal finances, you are highly unlikely to succeed in real estate investing. Check out my personal favorite, Set For Life by Scott Trench , or The Total Money Makeover by Dave Ramsey.
3. As you read these books, watch the biggerpockets podcasts. This will help clarify and reinforce what you are reading. You can hear real-world examples of how others have built their investment portfolio and (hopefully) learn to avoid their mistakes.
4. Now you need to figure out how to find deals and pay for them. Again, the BiggerPockets store has some books for this or you can learn by watching podcasts, reading blogs, and interacting on the forum. There is a handy search bar in the upper right that makes it easy to find previous discussions, blogs, podcasts, and other resources. Biggerpockets also has a calculator you can use to analyze deals and I highly recommend you start this as soon as possible, even if you are not ready to buy. If you consistently analyze properties, it will be much easier to recognize a good deal when it shows up. Find Brandon's videos on YouTube for the "four square" method of analyzing homes and practice. It doesn't take long to learn how to spot a good deal.
5. Study the market. You can learn to do this on your own or get a rockstar REALTOR to lead the way. I highly recommend a well-qualified REALTOR that works with investors and knows how to best help you.
6. Jump in! Far too many get stuck in the "paralysis by analysis" stage, thinking they just don't know enough to get started. The truth is, you could read 100 books and still not know enough because certain things need to be learned through trial-and-error. You don't need to know everything to get started; you just need a foundation to build on and the rest will come through experience and then refining your education.
You can build a basic understanding of investing in 3-6 months. How long it takes to be financially ready is different for everyone. Once you're ready, create a goal (e.g. "I will buy at least one single-family home, duplex, triplex, or fourplex before the end of 2019") and then do it. Real estate investing is a pretty forgiving world and the average person can still make money even with some pretty big mistakes.
