Wanting to get into Real Estate! Any Tips? Do's And Dont's

[Isaiah Blacksmith]

Hey guys! 

I am very eager about getting my foot into real estate and purchasing properties within the next 6 months. Any tips that anyone could give me would be great. Eager to learn the game! Thanks ahead of time! 

[Jason Wray]

Depending on your area and price range I would suggest getting into a Multifamily 2-4 unit first if possible. If you do not own a primary home its easier because you can claim any 2-4 unit as primary and only have to put down 3.5% for FHA, 5% for Fannie Mae or No money down 100% of you are a Military Veteran.

Live in the home for 12 months refinance pull some cash out and move on to the next property to buy. The cash out does depend on a few things like neighborhood appreciation with strong sales or renovate and refinance on the ARV (After renovation value).

When you buy a 2-4 unit you get to use the rents of the other doors as income to help you qualify. The only time you cannot is if you live rent free with a family member and you are 'not" on the lease or mortgage. Quick way to get around that is to get your name added to the rental agreement or lease.

If you do not have money for down payment you can opt to use a DPA - Down Payment Assistance program.

[Nathan Gesner]

Quote from @Isaiah Blacksmith:

Hey guys! 

I am very eager about getting my foot into real estate and purchasing properties within the next 6 months. Any tips that anyone could give me would be great. Eager to learn the game! Thanks ahead of time! 

1. Start with BiggerPockets Ultimate Beginners Guide (free). It will familiarize you with the basic terminology and benefits. Then you can read a more in-depth book like The Book On Rental Property Investing by Brandon Turner or The Unofficial Guide to Real Estate Investing by Spencer Strauss.

2. Prioritize your financial stability. Eliminate debt, establish a budget, and save. Remember, the notion of amassing wealth without investing is a dangerous myth perpetuated by self-proclaimed experts. A prudent investor doesn't seek quick riches through shortcuts. To thrive in real estate investing, you must maintain a firm grip on your finances. Explore my personal favorites, Set For Life by Scott Trench or The Total Money Makeover by Dave Ramsey, for invaluable financial insights.

3. As you read these books, watch the BiggerPockets podcasts. This will clarify and reinforce what you are reading. You can hear real-world examples of how others have built their investment portfolio and (hopefully) learn to avoid their mistakes.

4. NETWORK!!! Get out of your comfort zone. Stop hanging out with your deadbeat buddies who spend all day drinking, talking sports, and otherwise wasting away. Go to BUILD YOUR TEAM at the top of the screen and look for local investors or meetups in your area. You can also find real estate investing groups through meetup.com, Facebook, or a Google search. Birds of a feather flock together!

5. Now, you need to figure out how to find deals and pay for them. Again, the BiggerPockets store has some books on this topic, or you can learn about it by watching podcasts, reading blogs, and interacting on the forum. A handy search bar in the upper right makes it easy to find previous discussions, blogs, podcasts, and other resources. BiggerPockets also has a calculator to analyze deals, and I highly recommend you start this as soon as possible, even if you are not ready to buy. If you consistently analyze properties, recognizing a good deal will be much easier when it shows up. Find Brandon's videos on YouTube for the "four square" method of analyzing homes and practice. It doesn't take long to learn how to spot a good deal.

6. Study the market. You can learn to do this independently or get a rockstar REALTOR to lead the way. I highly recommend a well-qualified REALTOR who works with investors and knows how to help you best.

7. Jump in! Far too many get stuck in the "paralysis by analysis" stage, thinking they just don't know enough to get started. You could read 100 books and still need to learn more because certain things must be learned through trial and error. You don't need to know everything to get started; you need a foundation to build on, and the rest will come through experience and then refining your education.

You can build a basic understanding of investing in 3-6 months. How long it takes to be financially ready is different for everyone. Once you're ready, create a goal (e.g., "I will buy at least one single-family home, duplex, triplex, or fourplex before the end of 2019") and then do it. Real estate investing is forgiving; the average person can still make money even with some big mistakes.

[John Williams]

Run your numbers and don't hesitate to dive in! Real estate is a very forgiving industry in the long run (usually). There is a lot of value in gaining experience and getting your feet wet. Get that first deal... and it will snowball!

Cheers!

[Madri Koppe]

Once you find an opportunity that makes sense, go for it! You’ll learn so much by doing and will build your confidence!