New investors ready,but need guidance!

[Nicole Parry]

My husband and I are ready to invest, researched everything to death, but still need guidance from someone with experience who doesn’t want us to ‘join a program’ or ‘pay for a course.’  We are looking for alternatives to the ‘normal’ ways of investing. 
Is that possible and if so, where do we find someone like this? 

[Michael Dumler]

@Nicole Parry, your next step is to connect with and interview an investor-focused real estate agent, preferably someone that invests as well. I can only imagine an agent in the Austin market will chime in. Best of luck!

[Zane Cress]

If you're looking to invest but not be directly invested then you can research one of the many funds that pool money and invest it on behalf of all the people, managing and updating large apartment buildings and other real estate ventures across the country. Will give a decent return over a couple years if you want passive RE income. Just choose the right fund for you and vet it well. 

[Randall Alan]

@Nicole

Real estate is a great alternative to paper asset investing... usually.  However, when the Fed decides to try and slow down the economy with massive interest rate hikes the situation changes.  Right now, my advice would be to put your real estate plans on simmer.  My wife and I have a saying - which is "Do what the market tells you to do."   From at least 2016 to the beginning of 2022 Real Estate was 'the bomb!"  Your cash on cash return on rentals was at least 24%, if not more (ie. Invest 25,000, net $6,000 in yearly rent on a 2/1 rental).  We also sold properties for 3 times what we paid for them 3 years earlier multiple times!  Phenomenal Returns!

 Since the Fed stepped to the plate to combat out of control inflation though, that situation has really changed.  Most numbers I run today putting 25% down put most rentals upside down (losing money) on a monthly basis at the (ridiculous) rates sellers think their properties are still worth.  Prices have not dropped yet, because sellers haven't gotten the message yet.  They will as their properties sit idle on the market and their only real option is to either reduce their price or to sell their property later.  

As to programs and courses - My wife and I got a lot of good information from a group called "Fortune Builders".  They are one of the outfits that travels around and does seminars at hotels.  You have to realize how these types of companies work though.  It's a bit like a funnel.  First, a free seminar which is there to whet your appetite, then the big paid seminar, which is where they go in for the 'big pitch' which is 'Join our 'mentor group' by paying thousands of dollars and you'll really succeed."  My personal take was, and is - there is a lot of great information provided by these companies, but taking that last step (the paying thousands of dollars part) isn't necessary.  I'm sure that's not what they would want you to hear - but I would tell you can get just as much good education off of this forum, as you can spending the big bucks at the end of those types of seminars.  Here's the caveat though - We don't regret going to the seminar at all.  It was a 3 day seminar for about $200 for 2 seats- and we definitely felt like we learned a lot - a really good exposure to all sides of the real estate investing market.  You just have to be able to resist the constant barrage of sales pitches for the $xx,xxx "join our mentor group" and take the other knowledge they are offering and run.  

My 2 cents at the end of the day would be to ask questions in the forum - and more importantly just search these forums for answers to specific questions.  Every question you could probably ever think to ask has already been asked here, and the answer has already been provided.  That's not to say don't ask again - but just saying, "there is gold in them their archives!"

Back to today though - I can't recommend someone try to jump into real estate right now. Prices are high, money is expensive. It's just the wrong time. There just really isn't a great play like there has been in the past few years. I'm sure there are pockets where it can be pulled off... but broadly speaking - it's just the wrong time if you are looking to borrow money, or find a cheap property. Again, I say - "Do what the markets tell you to do". Right now you can make more money in a US Treasury IBond than you probably can buying a rental property. (Just under a 7% ROI) with zero risk. High interest savings accounts are paying over 4% and will continue to go up as the Fed raises their interest rates. The Fed will not lower rates until inflation comes down, and when that does happen, housing prices should have come back down some - or at least enough - that when money gets cheap again investors will have something to buy in real estate that will turn a descent profit.

I would consider this whole forum your mentor.  In addition - look around your local area for your local real estate investor group.  Every big city has one or more.  Circulating in those groups you will learn through osmosis.

The problem with anyone offering a specific direction is that many are predisposed to that direction.  Syndicators think syndication is awesome and the way to go.  Those who flip, preach flipping; those that are long term or short term rental people go those ways.  Property managers will preach property management, and self managing landlords will say that property management is over-rated.  So I would say to figure out the benefits and disadvantages of each avenue and at the end of the day, make your own decisions.  But with all of us interested in real estate -  most I think would agree that trying to buy in today's market is a challenge, at best.  

For now, I'm keeping my eyes and ears open, but not seeing any great buying opportunities in the near future in real estate.  It's a cycle though, so it will come back around.  Till then - circulate, ask questions, learn, and watch for the occasional diamonds in the rough - that are out there - but everyone is looking for.

Ask away - and All the best!

Randy

@Nicole Parryundefined

[Bryan Noth]

You can read all about how to swim, watch the videos online of swimming, even pay for a guru on how to swim but eventually you have to get in the water yourself.  

The bane and blessing of real estate investing is there are so many avenues to explore, it truly depends on your situation, your abilities, and your needs. I started my REI journey in Austin very focused on cash flow small multifamily, then moved towards appreciation with SFH LTRs, then towards value add opportunities. There does not need to be a single route and it can change.

What are your goals with investing and what strategy is most appealing to you/your situation?

@Nicole Parry

[Jordan Moorhead]

@Nicole Parry we actually have a meetup that meets twice a month where you can come learn from other investors and it's completely free! @Devin Dang is hosting one next Thursday actually

[Jordan Moorhead]

https://www.biggerpockets.com/...

[Julio Gonzalez]

Hi Nicole, welcome to the community! There is a great group of members on here to connect with. 

[Wale Lawal]

@Nicole Parry

The most successful investors were not made in a day. Learning the ins and outs of the financial world and your personality as an investor takes time and patience, not to mention trial and error. In this article, we'll lead you through the first seven steps of your expedition into investing and show you what to look out for along the way.

1. Getting Started in Investing
Successful investing is a journey, not a one-time event, and you'll need to prepare yourself as if you were going on a long trip. Begin by defining your destination, then plan your investment journey accordingly. For example, are you looking to retire in 20 years at age 55? How much money will you need to do this? You must first ask these questions. The plan that you come up with will depend on your investment goals.

2. Know What Works in the Market
Read books or take an investment course that deals with modern financial ideas. The people who came up with theories such as portfolio optimization, diversification, and market efficiency received their Nobel prizes for good reason. Investing is a combination of science (financial fundamentals) and art (qualitative factors). The scientific aspect of finance is a solid place to start and should not be ignored. If science is not your strong suit, don't fret. There are many texts, such as Stocks For The Long Run by Jeremy Siegel, that explain high-level finance ideas in a way that is easy to understand.

1. Once you know what works in the market, you can come up with simple rules that work for you. For example, Warren Buffett is one of the most successful investors ever. His simple investment style is summed up in this well-known quote: "Never invest in a business you cannot understand." It has served him well. While he missed the tech upturn, he avoided the subsequent devastating downturn of the high-tech bubble of 2000.

What kind of investor are you—an individualist, an adventurer, a guardian or a celebrity?

3. Know Your Investment Strategy
Nobody knows you and your situation better than you do. Therefore, you may be the most qualified person to do your own investing—all you need is a bit of help. Identify the personality traits that will assist you or prevent you from investing successfully, and manage them accordingly.

4. Know Your Friends and Enemies
Beware of false friends who only pretend to be on your side, such as certain unscrupulous investment professionals whose interests may conflict with yours. You must also remember that, as an investor, you are competing with large financial institutions that have more resources, including greater and faster access to information.

Bear in mind you are potentially your own worst enemy. Depending on your personality, strategy and particular circumstances, you may be sabotaging your own success. A guardian would be going against their personality type if they were to follow the latest market craze and seek short-term profits. Because you are risk-averse and a wealth preserver, you would be affected far more by large losses that can result from high-risk, high-return investments. Be honest with yourself, and identify and modify the factors preventing you from investing successfully or moving you away from your comfort zone.

5. Find the Right Investing Path
Your level of knowledge, personality and resources should determine the path you choose. Generally, investors adopt one of the following strategies:

Don't put all of your eggs in one basket. In other words, diversify.
Put all of your eggs in one basket, but watch your basket carefully.
Combine both of these strategies by making tactical bets on a core passive portfolio.
Most successful investors start with low-risk diversified portfolios and gradually learn by doing. As investors gain greater knowledge over time, they become better suited to taking a more active stance in their portfolios.

Online brokers have an abundance of tools that can help investors of all levels; we've done an extensive review and ranking of more than 70 online brokers to find the best one for you.
6. Be in It for the Long Term
Sticking with the optimal long-term strategy may not be the most exciting investing choice. However, your chances of success should increase if you stay the course without letting your emotions, or "false friends," get the upper hand.

7. Be Willing to Learn
The market is hard to predict, but one thing is certain: it will be volatile. Learning to be a successful investor is a gradual process and the investment journey is typically a long one. At times, the market will prove you wrong. Acknowledge that and learn from your mistakes.

Whether you are just getting started or want to improve your skills, check out the Investopedia Academy where we have dozens of online course for every kind of investor.

[Bob Stevens]

Quote from @Nicole Parry:

My husband and I are ready to invest, researched everything to death, but still need guidance from someone with experience who doesn’t want us to ‘join a program’ or ‘pay for a course.’  We are looking for alternatives to the ‘normal’ ways of investing. 
Is that possible and if so, where do we find someone like this? 

If you are cash simply connect with those that provide rentals 100% hands off, allow them to handle all for you 

[Jared Hottle]

Not sure what the normal ways of investing are? The best way to start is househacking. Can you rent out your basement or look to buy a duplex or build an accessory unit? Beyond that I think exploring turnkey single or multi family or doing the BRRR strategy is a good place to start.

[Drew Sygit]

Pretty vague, "alternatives"?

[Steven Foster Wilson]

Quote from @Nicole Parry:

My husband and I are ready to invest, researched everything to death, but still need guidance from someone with experience who doesn’t want us to ‘join a program’ or ‘pay for a course.’  We are looking for alternatives to the ‘normal’ ways of investing. 
Is that possible and if so, where do we find someone like this? 

Hey Nicole, welcome to BiggerPockets! This is for sure the best place for building up your network. 

It would be best if you try to attend your local REI networking groups and meetups and connect with as many real estate investors as you can.
You can also consult with lenders, brokers and ask them for suggestions on who might be a good real estate mentor, most will be able to provide one.

Try to think of different ways you can add value to that person. What are your strengths? For example are you experienced in social media marketing? Could you offer a mentor some tips? This way its not just a one way street. All the best to your real estate journey!

[David Sandvig]

Always happy to connect with other investors!  Good luck on y'all's investing journey!!

[Joe Scaparra]

@Nicole Parry  a lot of good advice here, but I know to get started it is a very hard step to take.  I tell many new investors to find them a mentor they can trust.  That will go a long way towards helping you get started.  I also tell them not to pay thousands of dollars to take a training program to kick start them.   I mentor a few people from time to time.  I enjoy doing it as I am a 67 yr old fart that enjoys giving back.  My mentoring is not cheap..............it will cost you a cup of coffee or maybe a lunch every now and then.  

However, I don't even know the least little bit about you.  I went to your profile and there is nothing.  I would encourage you to utilize your profile to tell us about you, your goals, experience and your why as to it pertains to wanting to invest in real estate.  If you are in Austin and would like a little one-on-one either on the phone or in person, inbox me with your contact info and I would be happy to help you get started.  Click on my name to read my profile, it may give you a good idea as to what to put in yours.  Cheers!

[Jordan Moorhead]

@Nicole Parry come to one of our meetups! We have them the 2nd and 4th Thursday's of the month and they're a free, no pitch environment!

[Lydia R.]

Hi Nicole! I am a fellow Austinite so I can definitely give you some insight as to what your options look like right now. You didnt give a lot of detail about the 'alternatives' you were looking for, so Im just going to throw a few things at you. Right now, flips are not where you want to start. The average DOM in a lot of areas is 60 days or more. Its taking a long time for properties to sell and the amount of inventory has increased dramatically. The few buyers who are buying have a lot more options to choose from. Rentals...well with interest rates being what they are finding a cash flowing rental right now is virtually impossible. Right now is a great time for some creative financing strategies. Sub2 is a fantastic option right now. Homeowners in distress that have 3-5% interest rates are excellent candidates for a sub2 deal. Im assuming you are familiar with what this is since your post mentioned the amount of research you and your husband have already done. Also, seller financing is a good acquisition strategy right now. If you can find a property that needs some renovation and the owner is willing to finance the purchase you could negotiate terms that would cash flow.

Another option to consider is looking at some secondary and tertiary markets beyond Austin. Places where you give up Austin levels of appreciation in exchange for cashflow. Killeen, Temple, Belton, San Marcos and other cities have much lower acquisition costs for properties which can allow you to actually cashflow, but you are giving up double digit appreciation. You decide if that makes sense. 

Mobile homes and tiny homes. Due to the high cost of living in the Austin area and the restrictively expensive real estate, mobile homes and tiny homes have become the new 'hot' asset type. People searching for affordable places to live (fixed income, seniors, single people etc) are considering these types of properties as an acceptable alternative. There is an amazing tiny home community right on the edge of the Austin city limits called Village Farm that has tapped into this increasing amount of interest. Its worth checking out. 

Last but not least there are mid-term rentals. As the STR market becomes increasingly saturated and the city of Austin increases their crackdown on illegal short term rentals, a hole is left in the market for people who need a longer stay than a weekend but a shorter stay than 12 months. For example, my neighbors filed an insurance claim when their leaky dishwasher destroyed a section of their wood floor. Unfortunately the exact flooring was no longer being manufactured and the entire floor had to be replaced. Well that put them out of their house for nearly 3 weeks and they really struggled to find an Airbnb with 3 weeks of consecutive availability. I have a very good friend who owns 9 mid term rental properties herself and manages 21 more for other investors that I can connect you with if this strategy is interesting to you.

There are plenty of options, even in this market. It all depends on what your goals are. Feel free to reach out if you have any questions. I am local so more than happy to help! 

[Ben Scarborough]

Quote from @Nicole Parry:

My husband and I are ready to invest, researched everything to death, but still need guidance from someone with experience who doesn’t want us to ‘join a program’ or ‘pay for a course.’  We are looking for alternatives to the ‘normal’ ways of investing. 
Is that possible and if so, where do we find someone like this? 

I can totally relate here as I have heavilyt seeked a genuine relationship with someone who is a few steps ahead of me in my niche, but this is certainly very difficult to find! You will get to talking to someone and feel like you have a good relationship growing with them, and then 2-3 conversations in, they tell you to sign up for their course for 10-15k, when you have spent the past 2-3x talking to them about how you only have 10-15k to invest with - in addition to the fact that it just took you 1-2 years to save up that money! Not sure if you are interested in STRs, but I would be happy to help some if you would like to reach out! I have been in your shoes before, and things aren't as far off as they may seem.

-Ben Scarborough