What was your first step in real estate?

Question

I plan on investing in real estate when I get out of the military next year, what is the first step you took when starting off? I have a little bit of money saved up but not enough for a 20% down payment.

Kyle Penland · Answer

I had several first steps...Before I even looked on the mls, I went to the bank and talked to my loan officer and got educated on what he wants and needs to finance.  My next stop was to a pm office who is now my pm.  we spent several hours driving around and I bought my first two houses from he and his partner.

Arnell Enriquez · Answer

Paul Padilla

Definitely, my first step is getting education on real estate thru books, blogs, forums, podcasts, webinars and networking. The next step is ACTION.

Jerry Padilla · Answer

Paul Padilla You can start now with a VA loan and a owner occupied multi-family residence .......... With no money down and asking for up to 4% in Sellers concessions towards down payment. Here is some info on financing with your VA loan. For VA home loan purposes, a veteran is a person who has served or is currently serving on active duty in the United States Military or Coast Guard and who was discharged or released from active duty under conditions other than dishonorable. Un-remarried surviving spouses of an eligible service member who died as a result of service or service-related injuries may also be eligible. ELIGIBLE PROPERTY TYPES 1 – 4-unit single family detached homes PUDs Townhouses Condominiums—per VA guidelines INCOME In order to be considered for approval of a VA home loan, income stability is a mandatory requirement Veterans recently separated from the service must have a minimum 2 year work history in the same line of work that he/she did in the service. The veteran should be in his/her most recent job for at least 12 months. W-2s for the last two years Signed Federal tax returns for the past 2 years for self-employed borrowers and rental income/loss MAXIMUM FINANCED PROPERTIES The maximum number of financed properties that the borrower(s) can have is four (4). However, the borrower must still have remaining VA eligibility for a VA loan. GIFTS A gift letter, source of funds and evidence of transfer of gift funds is required. MAXIMUM LTV 100% for Purchase transactions90% for Refinance transactions100% for IRRRL Refinance transactions MINIMUM CREDIT SCORE For loan amounts $417,000, the minimum FICO score required is 700. MINIMUM LOAN AMOUNT There is no minimum loan amount. OCCUPANCY Owner-occupied, primary residences are allowed. Second homes or investment properties are not allowed. RESERVE REQUIREMENTS If the loan amount is $417,000 or less and the borrower is not qualified with rental income, there are no requirements for cash reserves. If the borrower uses rental income to qualify or if the loan amount is greater than $417,000, six (6) months of reserves must be documented. SELLER CONCESSIONS Seller concessions include, but are not limited to, the following: Payment of the buyer’s VA funding fee Prepayment of the buyer’s property taxes and insurance Gifts such as a television set or microwave oven Payment of extra points to provide permanent interest rate buydowns Provision of escrowed funds to provide temporary interest rate buydowns, Payoff of credit balances or judgments on behalf of the buyer Seller concessions do not include payment of the buyer’s closing costs or payment of points as appropriate to the market. Any seller concession or combination of concessions which exceeds 4% of the established reasonable value of the property is considered excessive, and unacceptable for VA guaranteed loans.

Michael Woodward · Answer

Paul Padilla Get your "Master's Degree" (education) first!!  Read everything you can BEFORE you spend any money.  Read "The Millionaire Real Estate Investor" by Gary Keller and many hours of BiggerPockets.  Listen to all the Podcasts.  Don't short-cut your education!  You'll regret it if you do!!

John McConnell · Answer

also did you run into many roadblocks when purchasing? Are you planning on staying there forever? Do you self manage or have a PM?

John McConnell · Answer

is it possible to put the properties separately in under each of your names...as well as separate va loans? That would essentially double your lending power right?

Kerry Baird · Answer

We bought our first live-in fixer in the UK while stationed in England.  We fixed it up slowly while there and sold when we PCSd.  We bought another owner occupied to live in.  It was too big and we rented it out to owner-occupy another live-in fixer.  We bought our first rental with money we cashed out of mutual funds.  And we kept going...bought another live in fixer in England while there again.  Living in a live-in fixer now; we used our first VA loan this year.  Both of us were active duty so we have another VA entitlement to use in the future.  We determined that five houses, paid for, will complement military retirement.

John McConnell · Answer

Completely agree with everything you said except for the masters degree.  I feel the only thing you gain additional value add from a masters degree (besides a nice plaque to put on the wall for office cred) is the pure social aspect of it.  Degrees are great and college is great, don't get me wrong, but it is not everyone's cup of tea.  I factor in opportunity cost depending on where you are in your career.  For someone just starting out in life and very early in their career it may be beneficial (and also depending if you are planning on staying in said field as you progress through life).  For someone with 20+ years of military service who has been working in said field and plans on leveraging that experience for future "jobs" the only reason for a degree at that point would be job requirement.  Not to mention that you can take most ivy league college courses online for free minus any book you may purchase to go along with the course.  A lot of time and money for slight return on investment (ROI) doesn't make sense from a business standpoint.  There are things you will have to learn through some type of specialized education program (ie. Real Estate Agent/Broker, Certified Financial Planner, Accountant or CPA) and I feel specific focus learning makes sense dollar wise and time wise.  To put it in perspective, you are not going to put granite countertops in a $600 a month rental unit (maybe you will maybe you won't) because the cost doesn't justify the ROI.  Same goes for education.  I for sure am not spending upwards of 6 figures and 4-6 years of my life just so I can understand how to be a business owner in theory.  I have personally learned more this year reading upwards of 90+ books not just on real estate but business, psychology, history, sociology, philosophy, math, finance and other real world topics that I can apply to my life right now in real time. Listening to not just all of the BP podcasts but other relevant podcasts and recordings reinforcing most of what I have read.  I look for the patterns between topics and where those topics meet is where the real knowledge is learned.  Even Kiyosaki says that you have to seek out both sides of the coin, the thesis and the antithesis, and then look for the true answer where the two sides meet.. on the edge of the coin.  So I would completely agree with devouring every bit of knowledge you can from books (make sure they are good books from people who know what they are talking about).  Devour as much info you can from the podcasts.  Ask as many questions as you can on here to get specific help with what you are doing.  Take notes.  Don't just listen but take notes and regurgitate what you have learned so that it sticks.  Lastly take action.  Don't just try to do something, do it.  Like @Michael Woodward said don't short-cut your education. Oh yeah, get out to some local real estate working groups and meet the local players in your market.  Wealth of knowledge in just a single meeting (mentors).

Elizabeth Colegrove · Answer

Our first step was using the VA loan to buy our first home. If we hadn't been transferred almost as soon as we finished the fixing the house out. We had planned on saving up for the next donwpaymetn through house hacking. We did the o% down and used our savings to buy a pure investment once we were comfortable with the first house. Off we grew! we are buy and hold investors.

What was your first step in real estate?

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