I'd like to know where should I begin?

Question

I've recently started reading books on real estate investing and I am intrigued at how it has changed the lives of so many people. I am a complete beginner and I'd like to know where to get started.

Caleb Brown · Answer

I would do a house hack. That can be a 2-4 unit. Live in one unit rent the rest. Those can be more expensive but reduces your living costs and will be cash flowing when you move out. Another route is a single family. Renting room by room or doing a live in flip are doable options.

Aaron Zimmerman · Answer

I would also recommend house hacking. In expensive markets like New York area, this is the most cost effective way to get into properties and ideally reduce your housing expenses.

While house hacking, you're going to learn a lot about property management, rental property finances, and how to be resourceful.

i would encourage you to go to real estate meetups and go into local Facebook groups to expand your network.

Izaiah Barba · Answer

Hey Brook, I was in a similar position when I first started. There’s so much information and so many different paths in real estate. I would be curious of what specifically interests you in the real estate world? That would help me guide you in the right direction.Once you identify that, pick one lane and go all in on it. Real estate is full of shiny objects, and focus is what really helps you gain traction.Some directions you could explore include:Lending or raising capital to fund projects (the financing side)Finding deals through wholesaling, which I have experience inBuying and flipping propertiesBuying and holding for long-term cash flow

You’ll also want to decide on the asset class that fits your goals, whether that’s single-family homes, land, or commercial properties, etc. So I would start with interests you, what strategy would you like to pursue and then pick an asset class and pair it.

Justin Bul · Answer

As a relative newbie myself, I would say that the last word in your sentence is the answer. Begin. Just begin. As many on here have stated time and time again, analysis paralysis will keep you from starting the journey. There are assuredly more cost-efficient times to start your portfolio, but there's no right time per se.

Start somewhere, somehow, someway. That may mean months of self-education or mentoring. That may mean liquidating assets (a second car, collectible Pokemon cards, motorcycles), whatever can generate some capital to eventually leverage into a down payment. That may mean keeping yourself mentally motivated until capital/financing options exist to allow you to jump in.

Personally in the beginning I'd recommend looking into DSCR loans. They're often talked about on here, but at the premise, you qualify based on the actual or projected income from the property. It's not about your personal taxes or your W-2 earnings. There's a bit of nuance here as several DSCR lenders won't lend to first time home buyers, but there are some that will. It's finding the lender that matches your circumstances that'll take a little legwork.

Also, I'd resist the temptation to buy turnkey once you get to the point of making offers and closing a sale. I wouldn't suggest to start with a gut to the studs type remodel, but be willing to put sweat equity into painting, updating light fixtures, updating hardware, ie making things more current/timeless. The caveat is even if you're diy'ing improvements, it has to be of quality both in material and workmanship. Your renters will notice, and they will tend to treat your property in kind to the attention you put into it yourself.

Figure out who you are as an investor. Are you looking to rent to anyone on a yearly lease, or are you looking to go more specific and get into the short-term or mid-term space? Your strategy will shift depending on your targeted client. The different renter types have some unique needs and expectations, and if you aren't aware of them, they'll surely let you know and your occupancy/reviews may face challenges.

Don't let your education stop. Work hard to maintain objectivity. Lock in on standards and processes that prove successful, but don't get so blind to your own way that you stop looking at/for better mechanisms. With efficiency comes cash flow, and with cash flow comes the long term ability to continue your growth.

Last, have a talk with yourself. Go for a walk, go have a cold one on a barstool, go work out and get lost in music. While doing the task you enjoy, iterate to your mind that you can do this. You have thousands of resources (BiggerPockets, investment books, credentialed YouTube creators, etc). You have the desire. You have the power of the internet to research markets you may be interested in. You can use resources to look at median rentals or nightly STR projections. There has to be a mindshift that this isn't a passive or casual hobby, it is a life replacement. Once you scale, you don't have to work for "corporate" or someone else ever again. You work for yourself and for your family, whoever those individuals may be.

The first step to beginning is to, well, begin.

Brook Carroll · Answer

I'm working on purchasing a multifamily house, so I can use the house hacking method.

Brook Carroll · Answer

Thanks, for the advice. Do you have any suggestions on who, or what groups I should follow on FB?

Michael Smythe · Answer

What part of real estate investing interests you? Wholesaling, Flipping or Landlording?

Brook Carroll · Answer

Thank you, I appreciate the help.

Nicholas L. · Answer

@Brook Carroll

welcome.  i recommend starting with a house hack if you can.

House Hacking: What Is It, How to Start, and Strategies for Success

I'd like to know where should I begin?

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