How would you start?

8 Replies

Ok , I’m interested in everyone’s opinion on how they would reach the goal in this scenario. Your goal is to get 50 doors preferably a rental complex and quit your job. Your starting with 1000 dollars . You want to get the 50 doors in two to five years. You currently have a job that pays ok but it sucks up twelve hours of your day. However you live in Southern California, so you live pay check to paycheck. You can save about 100 bucks a month if you stretch things out. You have a family of 5 living with you so you can’t really move from place to place. You have a credit score around 620. How would you make that work and reach your goal? Be detailed as possible. If you haven’t guessed it that’s what I have to work with and I feel like it’s impossible to get started, but I also know that anything’s possible, so help me out guys, i need advice!

@Christopher Baldwin

If you have any equity in your current home I would sell it and take the money and move across country to somewhere that has a lot lower cost of living and find a new job and to start completely over. If you can only save a 100 bucks a month in your current situation then you are going to need to make drastic life changes if you want to have any kind of success

I listen to a variety of RE podcasts and have been spending the last half year doing my research to get started and here's what I would say is still my #1 takeaway--NETWORK. In your situation, I'd see what you can do to instead of stretching yourself thin to free up money (since that won't get you anywhere fast) I'd focus on seeing where you can free up your TIME to: 1) research, learn, became smart about what a good deal looks like 2) find a local REIA meetup and start to meet people 3) develop a vision and start to advertise what you are doing to everyone you know (this not only hold you accountable but also will start to get potential partners interested) 4) see if you can work under someone--anyone in the industry, even if its for free for a short period of time.

All of this will allow you to find partners to get yourself started, because if you have the knowledge and the hustle, you can always find someone else with the money :) 

Good Luck!

Welcome, its a great way to setup a question and get lots of advice. So you're off to a good start. 

I personally think, you need money, credit or time to hustle to get things started. So if you don't have those working for you you're missing something you need. So start there. That is ground zero, getting that credit score up, building the cash reserves and finding time to invest into this business. There isn't a way to get traction without these. Or everyone putting away $100 a week would be retiring off their 50 doors they acquired. 

Having realistic goals. Looking at the peak of the mountain as your goal could be disheartening and discourage you if you don't reach that goal. Perhaps some more realistic goals of having a 750+ credit score and some savings to put to work and a full understanding of what types of investing suit you and your families goals in the next year would be more realistic. Delayed gratification is the secret sauce, while many look like overnight successes. Its years, even decades in the making. Gradually adding up year after year. 

Sacrifice is necessary, whether that's spending less on daily items to build the cash reserves. Moving to a different area, taking on side hustles, something has to give. I hate to sound like a motivational speaker but if your current life equation of A + B = C then A + B will not equal D without something being added to the equation. It doesn't sound like currently you are able to add something different to that equation. So work on being able to. 

I wish you the best, and hope you find what you need to secure the goals you have for you and your family. 

Great suggestions above.

Much of this depends on the knowledge you have already. Getting educated is important, but you'll reach a point of diminishing returns if you aren't also out there building relationships. There's only so much a passive education (books, podcasts, blogs, etc.) can teach you. When all is said and done, this is a relationship business, and the most valuable education comes from taking action.

Time is your most valuable resource, so task #1 is finding efficiencies in your schedule.

Twelve-hour days are unsustainable for the long term.

You need to make time in your day (30-90 min) for finding and connecting with deal sources - brokers, owners, and influential third-parties. This will accomplish two goals: 1) it will build your pipeline and 2) you will gain exposure to opportunities that cost little to no money.

I don't know what you did to get the credit score you have, but it may be helpful to seek reputable counsel to help get that score up. This may take some time, but it shouldn't stop you from building a network and deal pipeline. You may have to wholesale a few deals to build up a war chest while your credit score improves. Just don't get emotionally married to any deal. Think of it like selling widgets.

Finally, I'm not a huge advocate for scrimping and saving to claw your way out of a financial rut. This contributes to a scarcity/fixed mindset at a time when you NEED an abundance/growth mindset.

Make a plan and consistently seek daily progress toward the objective. Your dream of 50 doors may not be two years away, but you could definitely reach that goal in five with the right approach.

Originally posted by @Christopher Baldwin :

Ok , I’m interested in everyone’s opinion on how they would reach the goal in this scenario. Your goal is to get 50 doors preferably a rental complex and quit your job. Your starting with 1000 dollars . You want to get the 50 doors in two to five years. You currently have a job that pays ok but it sucks up twelve hours of your day. However you live in Southern California, so you live pay check to paycheck. You can save about 100 bucks a month if you stretch things out. You have a family of 5 living with you so you can’t really move from place to place. You have a credit score around 620. How would you make that work and reach your goal? Be detailed as possible. If you haven’t guessed it that’s what I have to work with and I feel like it’s impossible to get started, but I also know that anything’s possible, so help me out guys, i need advice!

Hi Christopher,

The easy way--Marry a wealthy woman.

The reality-- You work 12 hours a day, have the responsibility of affording a wife and five kids and only have $100 left over a month ($25 a week which will get eaten up the first time the car needs new tires or etc...) and you live in rather expensive So.Cal.

You need cash money and time to work at this.

If I were you, I would do this in steps over time.

1.  Spend the free time (however little it is) learning about how to Financially Analyze apartment complexes of that size; (once that is checked off the list)

2.  Spend the free time (however little it is) learning about how to Perform a due diligence walk though on apartment complexes of that size; (once that is checked off the list)

3.  Spend the free time (however little it is) going to meetup.com (and other) real estate gatherings in your area for multifamily owners (to purchase you may need to partner with an existing owner as your deal sponsor with cash, net worth and experience to qualify for the loan).

You're not going to learn this overnight, it's a rather large body of knowledge.

Also while you're doing this hang out in this forum a lot and learn things here.

A new job where you can Earn A LOT more money would also come in handy.

In addition to that, read Rich Dad Poor Dad.

Over time, other options to make money in this business may open up for you--so be open to them also.

Good Luck!

 

@Christopher Baldwin

Quit your job and get a job in the real estate industry. This not only gets you practical, hands on knowledge, but also syncs at least part of your day with reviewing prospective properties, making financing and investment contacts and establishing a track record.

You won’t be able to go from $1000 to a situation where you’re able to live off the income of your real estate investments - in 5 years. For that you’ll need to leverage other investors money in some sort of syndication situation where you receive an equity kicker for being the sponsor. Realistically, straight investment of your own capital pared with the loans you qualify for and a marginal credit score and starting with little capital and little available time make the journey to financial freedom a very long haul.

Buying real property at the cap rates available today doesn’t lead to riches in most scenarios. And being able to obtain sustainable outsize returns requires knowledge, experience, capital access, time availability and not a little luck. Bottom line is that to create the possibility of the goal you outlined starting from where you are will entail an entre into the real estate BUSINESS as well as real estate INVESTMENT.

Here’s what NOT to do. Don’t pay $5,000 to $40,000 for a real estate guru to provide you with the same knowledge you can obtain in a mediocre 175 page real estate book, “mentor you” with your mentor contacts being people who failed as salesmen for the guru’s programs reading from scripts, and having you believe that their special, unique, one of a kind strategy will bring you riches that somehow defy the returns available in the industry.

Originally posted by @Mark Fries :

@Christopher Baldwin

If you have any equity in your current home I would sell it and take the money and move across country to somewhere that has a lot lower cost of living and find a new job and to start completely over. If you can only save a 100 bucks a month in your current situation then you are going to need to make drastic life changes if you want to have any kind of success

 The OP should read the last line of this post. Though blunt, couldn't be more accurate.