All Forum Posts by: Shawn Parsh

David,

There are many ways to make money in real estate the trick is to find what works for you and the people you interact with. It's difficult to give advice when I don't know any details about your situation. For example, do you own a home now, do you have disposable income each month, what are your skills? 

I like buying properties that need work, in your case just starting out I would say cosmetically distressed properties. Do the rehab work and build quick equity. I like what Jaron suggested. Many people have started their investing career the same way. What I will say is that if you have an income to pay a mortgage or lease payment I would get started investing sooner than later. 

Joshua,

You have got a lot of solid advice so far and as it has been said multiple times BP is a great place to ask questions and learn from others. I like the suggestions that said to buy a place for yourself whether that is a single family, a duplex or fourplex. I would also suggest that you find a property that is cosmetically distressed. Something that is out dated, maybe needs new paint, carpet, landscaping and so on, but nothing major. If it is a multi-unit you should be able to up the rents after the rehab. In either case if you buy one that needs a little work you should be able to create some quick equity. 

You could also consider lease options which may help with your fear. I would continue to read books and learn as much as you can, but you need to actually take action. I would connect with those local who have offered to help in the post above and then set a goal to obtain your firsts property within a certain time period. Good luck. 

Thanks for the input Carlos, it is much appreciated. 

Hnu,

  Congratulations on your plan to become an investor, make sure it doesn't just stay a plan. Take Action. I agree with Timur, I would recommend you start investing in your local market. In my opinion things get more complicated if you try to invest from a distance when you are first starting out. A house hack or duplex to fourplex are solid plans as well, but I will add another one to consider. 

I would also look into lease options. In particular I like to find cosmetically distressed properties that I can get at a steep discount. I then rehab the property and finance it or sell it. A lot depends on your particular situation. I prefer to find distressed properties, rehab them and then rent them out for positive cash flow. However, if you need the money you can always fix it and flip it. You can then use the profit to invest in your next property with more options. Good luck. Let me know if I can be of assistance. 

 I agree Bruce, people have been able to become successful in different locations and different time periods regardless of what was going on around them. 

 Agreed, I see the same thing in my area. Plus I see numerous storage unit facilities so people can store all of their have to have items that won't fit in their homes.

Elad,

Congratulations on saving that amount especially in these economic times. What is your plan with the 90,000? Are you looking to buy the house cash and pay for the holding cost and rehab cost out of that 90,000? Do you have a day job and if so do you have disposable income each month to cover some carrying cost while you complete your rehab? 

     I understand wanting to invest in a lower cost market, but I prefer investing local. For a new investor I think investing local is better as well. Having said that I will say that in my market in NE TN I can do projects for about what you have. For example, my current project is a 2 bed/1 bath that I purchased for 65,000. I'm still a couple weeks from finishing the rehab, but it will end up costing around 30,000-35,000. The house right before this one I purchased for 55,000, put 42,000 in rehab costs, and sold it for 157,000. 

As far as building a team I think it will be more difficult to try to build a team in a market you do not live in. It will be hard enough to get contractors, who are any good, to show up in a timely manner to do your job. In my area good builders are booked for over a year, my electrician is booked for six months, my HVAC guy is out a couple months and so on. Because I do so much business with my contractors they squeeze my projects into their schedule. That loyalty takes time to build. 

You may want to look into a lease option on a cosmetically distressed property in your market. Find a property that you can sign a lease on with the option to buy at an agreed upon price sometime in the next two years. If it is ugly enough you should be able to sign that lease with either no deposit or a very low deposit because of the condition of the property. Then rehab the property and finance the property or sell it. 

I agree with the others on the importance of getting the work down in a timely manner. When I close on a house my team is already parked at the property. When I finish signing the paperwork I text them and they go in to start the work. Too  many investors buy properties and then bring in their team to figure out what needs to be done and to schedule the work. I figure those things out before the closing, get estimates and schedule the work before I close. Good luck on the project. Let me know if I can be of any help. 

Robert,

Congratulations on the success so far and the solid plan for the future. I also like buying the properties that need work, rehab them, and rent them for profit. As you said it is a great way to build quick equity and to keep your cost basis down. I too can do most of the remodeling myself and did for the first few years, but now I try to hire the work out. A long time ago a successful investor told me that every time I work on one of my properties I am working for the same hourly rate that I could have paid someone else to do the work. It made me change the way I do business. 

I now focus on overseeing the projects, and finding and negotiating the next deal. By doing so I do more deals and make more money. I may make a little less on each deal with the costs of paying others, but I do more deals and can better keep track of the projects. It also allows me more time to network and build my team. 

There are differences in investing in different markets and each investor has their own strengths and weaknesses so do what works for you. If doing business with friends and family works for you than keep at it, just make sure you always assess the deal as a business. I know it is different for everyone, but I prefer to invest in my local market where I can directly oversee the properties or at least keep a close eye on them. I would be more inclined to invest in distant locations if I wasn't having any luck in my local market. Good luck, let me know if I can help in any way.

Theresa,

  I appreciate the input and you are 100% correct. My thesis for my Masters Degree involved the risks involved with the U.S. electric grid, but part of that research looked into the amount of electric required by the average American. My research highlighted how the average size of a home in the U.S. went way up over the years. I'm not sure what changed that meant we needed so much more space, but it is the new reality for most. 

I've always found that preparation, hard work, and most importantly taking Action are the keys to luck. Opportunities are all around we just have to be ready to act on them when they present themselves. I've often heard that preparation (education) meeting opportunity equals success, but I disagree. I think it just results in smart people watching things happen. It takes action to be successful.