How did you decide what to invest in??

Question

Hey everyone. I was just wondering how did everyone decide what they wanted to start their real estate investing with? I know I'm pretty interested in flipping but I think that's only because I'm still learning about the other options. So how did you, personally, decide when you wanted to start investing and what you wanted to start investing in? And what did you start with?

Account Closed · Answer

I started with flips, by chance.  My wife went to a garage sale in our neighborhood in 2004 when real estate was zooming and the guy holding the sale said something about needing to get rid of the house, which was pretty beat up but on a big corner lot.  Fortunately she recognized the value and convinced me to go for it.  It is still, 11 years later, our biggest flip by difference between purchase and sale price (we did pretty well).

In our case it wasn't a thoughtful choice--we became real estate investors after finding an opportunity.

Jeff Joachim · Answer

I work for an investment real estate firm here in Orlando, Fl. Most of the new investors I work with typically get started with flips until they build up enough cash reserves to buy and hold.

@Sharaya Rutherford Best of luck and keep us posted on your progress!

John Thedford · Answer

I started with a buy and hold and have done so ever since. I also branched out into HML. Both have been good choices. If you are in a good market for flips and feel comfortable with that as your first strategy go for it. Over time, most people make changes or add other types of investments to their portfolio.

Bill Gulley · Answer

Good title, that's what got me here!

Where to start? Learn real estate first, not a niche!

Markets change, in just a few months, your efforts in some niche operation can change. Affordable housing inventories change, laws change or are adopted, financing requirements can change, your money partner can die or change their mind, thousands of things can happen to effect any niche that you attempt to specialize in.

Being flexible is key in RE! I made more money by accident than most niche operators do on purpose.

Knowing the basics of RE allows you to recognize opportunity. Chasing an old house to remodel is driving down a street with blinders on. Newbies need to open their eyes and understand it's opportunity that you need to look for, not just who will give me an option or a sandwich lease. You're not seeing the forest for the trees.

There are many paths through that forest, the wealth is on the other side. That forest is full of mine fields, snakes, predators and fallen trees blocking paths. Learn to recognize them before you enter!

Your survival training begins with basic training, not advanced tactics!

Niche operators might tell you to drop bread crumbs along the way, you might recall how that works out in a forest!

Skilled operators know the basics, they can turn to any strategy to profit as they recognize opportunity or dangers.

I began buying and holding, leasing properties I first lived in and moving on. Hacking along the way. Didn't make much either, not a short term retirement path. Then I took a real estate course and learned the basics. Things changed quickly as I began seeing opportunities instead of chasing a deal. Oh, there were lucky buys in the beginning. Pretty simple thinking, if I was willing to live there, chances were other were too. Not the best approach.

All paths have intersections through the forest to the other side. There is no real short cut along one path. Most intersections are marked, some are not. Your basic training will teach you how to read the signs and the possibilities of changing direction, when and how to turn onto another path.

Those with knowledge survive and succeed, those who fail to learn perish in the forest. :)

Account Closed · Answer

If there is an area you already know then start there. I started with a 4-plex as an owner occupied. I was living in one at the time as a rental and learned from the owner and from being a tenant. Then I moved to a home and turned it into a rental. Repeat a few times. My first few properties were owner occupied. Keep it simple and stick to what you know at first. Use BP, network with professionals, and avoid speculation.

Welcome! And that is a great question.

Rod F. · Answer

Hi Sharaya,

I started with a buy and hold plan.

Everyone I knew (including my realtor wife) tried to tell me the no money down program wouldn't work. I have use it close to 45 times. With up to 5 different banks.

The first one is the hardest.

I found a unique way of testing the market for rentals and convincing partners at the same time. (I ran adds for houses and put their phone number in the adds). It proved to them the market existed.

I have tried to flip a few but they seemed to end up buy and hold. I am working on one now that I may try to flip In my IRA.  I am doing a one man rehab on this one.

I wish I knew more about wholesaling, but I can see the potential in the buy and hold.  Most of my IRA rehabs will return my money in a 3 to 4 year period with the house held free and clear.

The first house was a small 2 bedroom with 1 bath in a farming community that was only nine thousand dollars. wife and a future partner said no one wanted to live down in that little town. I told them the town wasn't empty. So I ran adds in the paper. (we used them back then).

2 bedroom 1 bath home in (small town AR ) 295 month. and put his phone number in it.(partner).

His phone rang off the wall.  (Realize we didn't even own the house.) he said what do I tell them? I told him to tell them it was rented but we had another one coming up could we contact them when it was ready? and got their info.

We bought house , rehabbed it , rented it for $395 to $450. held it a few years and sold it for 25K.

We own 10 properties in the town now.

I guess what I'm telling you is. The path your looking for is there . you just have to find it and follow it. Be prepared to make changes with the market.

Partner and I have started rent to owns and lease options now with some of our properties.

Brandon Turner · Answer

Hey @Sharaya Rutherford welcome to the site! Your situation is perfectly fine! I highly suggest that you read these two ebooks that we have here for free.

http://biggerpockets.com/ubg

http://biggerpockets.com/7years

I believe those two could give you a better picture about real estate. :)

See you around the site!

How did you decide what to invest in??

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