My wife and I are eager to get started in some area of real estate investing; however, we are not sure which route to go. My wife just graduated college and I am coming up on my last semester. We have about $6000 saved, decent credit and a bundle of foreclosed properties in our city. Can anyone give me some advice as to where we should start? I have seen posts about wholesaling, contracts, flipping, etc. I just need to know where I can realistically start.
What college degree do you both have? What types of jobs/income will you recieve. I think you’ll need to have a source of stated income in order to have financing options. There will be many RE options for you for a while. Take this time to earn/save as much as you can. You should also get familiar with the various properties for sale in your market. You’ll need to be an expert in your market. Go and check out as many properties as possible to learn about it. There are some good books available also.
“The Millionare Real Estate Investor” by Gary Keller.
" 1 Minute to Rental Propert ERiches" by Mike Rossi. (a.k.a Propertymanager)
“Find it, Fix it, Sell it”
" Rich Dad Poor Dad" and the other “Rich Dad” series of books.
These books are relatively cheap and contain some really good info. You can also go on ebay and buy the Carlton Sheets course ( $70 - $80). Get the most recent one they have. The one with the DVD’s and CD’s are decent. There’s also a “toolkit” that comes with it. Be sure its included. The basic idea here is to get educated, save money and improve your credit BEFORE investing any money in a property. Stay away from expensive seminars and courses. They don’t offer any better info you can obtain for little or no cost. Good luck.
What areas of REI interest you? Do you want to be a landlord or does the thought of dealing w/ tenants repulse you? What are home prices like in your area? You may be able to get into an investment property for 15% down. If home prices are cheap enough there, maybe your savings will be enough to get you started on your first small home. What skills do you have? Can you rehab/repair? The more you can do for yourself the more money you can save.
Here’s what I’m in the process of doing with a 4 family house-
Do you already own a house? If you don’t, and don’t mind being a landlord, buying a 2-4 family house with FHA financing could get you in for as little as 3% down or soon to be 3.5% down. If the house needs fix-up you could do a Streamlined 203K loan if repairs are under $35K or a regular 203K if the repairs are over $35K. The regular 203K for amounts of $35K requires that you hire an FHA project manager. The 203K repair money is financed as part of the mortgage.
At the moment, your circumstances limit your options. You have no income, and not enough cash on hand to buy, hold, or rehab property. This eliminates buying foreclosures, flipping, wholesaling, landlording, subject to, and lease option techniques. All require cash on hand and ability to get financing.
Another limiting factor is knowledge. You have no experience in real estate and no clear goals. You don’t know your market, nor do you know what works right now and what doesn’t. You need to start in a niche that requires no cash, no credit, and no risk, while you learn more about this business and get your bearings.
This suggests “birddogging” as your entry level. Join your local real estate investors club, meet successful investors, learn what deals they are looking for, then become a birddog. Scout out potential deals and bring them to the investors for a finders fee, $500 to $1000 per deal. Look over the investor’s shoulder, observe how to structure a deal, learn how contracts work.
Once you get more familiar with your market. build an investor buyers list, and gain knowledge and confidence. you can start putting the really good deals under contract, then assign your contract to one of your investor buyers for an assignment fee of $2500 to $6000 per deal.
Start slow, learn your market, learn what works in your market, amass investment capital, then start buying in your own name.