New to Real Estate, Investing

[Ian Alvarez]

Hello Everybody, I moved to Texas from Wisconsin a year ago and finally found myself a decent job. I’ve been listening to Bigger Pockets, and am extremely interested in learning how to get some rentals and some cash flow going. Is there anyone who has the ability to show me the way? I’m eager to listen to more podcasts and read more books on the subject. I see myself wanting to do multi family, but I want to start of single family, and get some cash flow. Thank you for your time. -Ian A.

[James Call]

@Ian Alvarez,

Welcome to BP from Texas!

Do you have a real estate agent you are working with?  Have you gotten with a lender?

I suggest the following:

1. Go to your bank or credit union and tell them exactly where you are.  Don't over-exaggerate anything.  If there is a skeleton in your "financial closet, share it with them.  They will see it eventually.  

2. Go to 2 other mortgage brokers, banks, or credit unions and do the same thing:

"I have a 732 credit score, I make $65,000 per year, I owe $5k on my credit card, I have $800 in car payments, my rent is $1250 a month, etc... etc...."

3. They will give you a rough idea of the type of money you can borrow from them.  You will need to have some money for a down payment.  Usually about 20% of what they will lend you.  So if they will lend you to buy a $200,000 property, you will need 40k in cash for the down payment. 

4. Once you have some idea what they will lend you, a pre-approval letter, and the down-payment, you are good to go.  The next step is to find a real estate agent who knows investment real estate.  

I have been a full-time Realtor, and have worked with a lot of Realtors and brokers. Many of them focus on personal home purchases.  You can ask around here, or look at websites in SA to see who knows investment real estate.  

5. Start looking.  PATIENTLY.  You may have to wait a few months for a deal to come up that you like.  

I have seen too many people do this list in exactly the opposite order.  I did it when I started.  I found something I liked, went to a Realtor, they sent me to the lender, then I realized I didn't have enough down-payment.  

Good luck and let me know if I can help with anything.