Advice? What should I do? Help.

General Real Estate Investing
1

Hello,

I need advice for my real estate career. My problem is I see possibilities in a few different areas and haven’t decided one to give it my all, another weakness of mine is I read and research a lot, and need to DO more (paralysis by analysis, I know reading and researching is good, but I need to DO more action). Which area should I focus in on and start doing?

Here is my background and options:

I am 28, full time in real estate, I live in CA, graduated from a top 25 university, have my real estate brokers license, have work experience as a loan officer and realtor, have about $70k in cash (but I also have plenty of student loans), have knowledge of both commercial and residential real estate, I am very interested in the opportunities with REO’s.

Option:

  1. I can find someone (kind of like a mentor) or a company to work to help me succeed in either:
    A. Commercial real estate lending (I like and have knowledge in this area, and some people say this is the best option to make the most money in the long term).
    B. Listing residential REO’s as a realtor (I am VERY interested, have knowledge, and I hear this can be a HUGE opportunity for the next couple of years, but I lack experience and contacts).
    C. Investing in REO’s (BIG opportunity, but I don’t know where I would be able to get the cash or investors to be successful).
    D. Residential Lending (have most experience with this area, can probably find a Fortune 500 company to work for and move up the ladder in the long term).

  2. I can attempt to grow my own brokerage/company in any of these A-D options. This route may range from possible to very tough considering I have most of the knowledge, but not enough experience in some of these areas.

Any advice and recommendations is greatly appreciated. I feel at times I research and keep all these options open as a way to make an excuse for not focusing and succeeding in one of them. I really want to succeed. Please help.

2

Amir - as you stated you have a number of options. What excites you? When I started thinking about real estate, I thought I wanted to flip houses. Then after reading more about real estate and the different options/opportunities/experiences I found that I really want to be a landlord. This is what excites me. So my suggestion for you is to find what excites you and go after it. In my case I had to read about other people’s experiences. This may or may not work for you.

And to leave you with some food for thought - it seems that whatever you are doing now is generating enough money that allowed you to save $70k in cash. $70k is a very good start. I am going on a limb here - but I believe most of the successful investors here probably started with less than that.

Good luck!

3

It sounds kinda crazy to me that you would ask a group of unknowns what direction you should head with your life and career.

If money were not an issue which one of these things would you pursue, or would you not pursue any of them. I would recommend trying to make a career out of whatever it is that you would do if money were not an issue.

Yes that seems far fetched to many people out there, but whether you think you can, or you can’t, your right.

Best of luck.

PM you email and I will send you my RE workbook that might help you come to a conclusion for what you should be doing

4

Amir,
What do you love doing? When you go to work are you counting the hours until you go home, or are you enjoying the challenge of work so much that you forget the time?

Now is the time to really think about YOURSELF. Whatever your path is, make it the right one for you.

Furnishedowner

5

Amir, it certainly sound like you’ve given this a lot of thought. Too much perhaps :biggrin. What exactly are you doing in RE full time right now? From your post it doesn’t sound as if you’re interested in being a landlord. If you decide to purchase REO’s, you’ll need to determine what your plans are fro the property. Are you going to Rehab & rent? Rehab & sell? I personally like the idea of purchasing distressed properties at a BIG discount and renting them out for continous cashflow. Sometimes to get to that point, you may want to “flip” some properties to generate money for purchasing properties. I would think that REO’s are the easiest area for you to get into. You can focus your efforts on listing REO’s to get started. Look to generate the necessary network of contacts that deal with REO’s. Once you’re “in the loop”, you’ll have access to some pretty good deals. I hope this helps. Good luck.

6

Amir,

I agree with other statements to pursue a job you love to make money,
then deal with obtaining property, whatever type you like. I had a job
out of college (age 29 in 1982). Married with one child, then 2 more by 1985. Bought a fixer for 50K…tore off the roof, put on trusses, added another addition (Seattle) worked for 5 yrs on it. Everything from concrete forms to roof. My wife and I read building books and were highly motivated. Then I wanted to change careers so I worked part-time at it until I made the total transition. I’m 56 now and have never looked back. It was the smartest thing I ever did.

I’m always looking for property. We buy property we want to live in, as opposed to flips or investment real estate (lots). I have a cabin in the Cascades of Washington that fulfilled my desire to have a small place by the river. It’s off the grid, but close to transportation. We don’t rent it, but the yearly taxes are so low, it’s worth holding.

In 2003 we took all equity out of the fixer house, and purchased a farm in N. Calif with an owner carry. I think owner contracts offer the most flexibility. We’ve bought 3 pieces like that. Low fees and good-will
instead of doing the 3rd degree from banks for a loan.

We’re buying a place in Portland and going through traditional loan process. ING and WAMU wouldn’t offer my terms, so I’m paying a few more points with a brokerage. Why? Cause we need to move to the city again to make money. Work is your most important asset. Don’t ever forget that. The rents are the cream.

Good Luck…keep a good attitude!!

7

Terrific post, Maddiac! Welcome to the REI Club.

Amir, You are getting a ton of great advice. It looks like you are at a crossroads. What makes these posting boards so interesting is that everyone is dealing with real estate, but in many different ways.

Maddiac is owner occupying purchase after purchase, propertymanager is doing a ton of lower income rental units, others are real estate agents and mortgage brokers. fdjake fixes and flips houses, I rent out fully-furnished homes. You can get a snapshot of somebody’s life in real estate by reading their posts.

Let us know what you decide you’d like to try. You’ll find plenty of well-meant tips here.

Furnishedowner

8

This is great! I thank you all for your responses. To answer some questions,
I ask a group of people I don’t really know because I know they share my passion for real estate.

Another reason I ask is because an older friend who is in residential real estate and finance said all these areas have some differences, but to do commercial real estate because it is more money in the long run. And he said I would thank him for that advice in the future. Agree?

The ? what I am doing now: I am a full-time real estate broker. I started in real estate doing residential mortgages, and now do real estate and loans for some commercial, but mostly residential properties, I’ve bought and resold an owner occupied property during the previous boom in real estate and have a strong interest in further investing in real estate.

Right now, I think I agree the most with phlemboy’s idea/thinking, so I would do option B (Listing residential REO’s as a realtor, even though I lack experience and contacts now). This would be great and would be a good route to option C (Investing in REO’s, by myself or with investors) .

And the big question, what excites me/what would I do out of these options if money was not an issue/what do I love to do? I’d buy a portfolio of properties, land, some commercial, but mostly residential, and get as much cashflow as I can, and flip when it makes sense. This is technically the closest to option C of the options I listed, but I’m not sure that is picking one of my options because I will need to find deals and thus be “in the loop” on REO’s so option B (listing REO’s and developing contacts to sell to investors) can make sense and there are still some reasons option A can make sense too. I guess I’m still confused.

A problem I have with any of these options is, as furnishedowner says, I am at a crossroads and want to get focused on one of these options and I know I will probably get really into it and get more and more interested and passionate that I don’t give the other one a shot even if in reality it turns out to be better suited to me, I would actually like it more, and I could be more successful in that one. I guess that’s why I need to do so much analysis to find the right one.

Would you guys recommend finding a mentor or company route OR trying to go about it on my own and learn as I go along?

Thanks again, and I look forward to hearing your responses/advice.

9

Amir - my suggestion (it worked for me). Read the posts on this site (try to read all of them) and join your local REIA. Go to the meetings. As you read and talk with investors you will learn new things and maybe you will find something that is really appealing to you. I have 2 or 3 investors from my local REIA that I consider as my mentors. I didn’t have to go to them and asked them to mentor me. I simply started interacting with them. Today I can ask them questions and they share their own experience. This is the best mentoring you can get - at least in my opinion. These guys know my local market. They are doing things I want to do. And they are successful in doing those things. I don’t think any of them think of me as a competitor.

I hope this helps. Good luck!