Georgia appraiser wanting to get started in REI...

General Real Estate Investing
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Hey everyone. I hope all is well.

I’ve been reading as much as I can (which isn’t as much as I’d like, but school comes first) here on the boards, and I’ve learned a good bit in that time. I would like to outline my basic plan for getting into real estate on this board. Hopefully, some of you seasoned veterans will either affirm my strategy or critique my methods.

I’m a 20 year old real estate appraiser, working for my dad. I’ve been in college for two-and-a-half years so far, but I’ve switched my major so many times that I still have 2-3 years left no matter what I choose. However, since I’ve gotten into real estate appraisal (I’ve been on my own for about 6 months), I’ve come to realize that I love the real estate industry. This realization helped me finally to decide to transfer to West Georgia University and pursue a degree in real estate. My current college doesn’t offer a real estate degree, and I seem to have developed a subconscious hatred for this campus… I guess my years of confusion and indecision here have caused me to associate this school with hell.

Anyway, I have to take one accounting class before I can get into my real estate-related coursework. Once I get two RE classes out of the way, I’ll be eligible to take the Real Estate Licensing test. Once I have my RE license, I hope to continue appraising. Hopefully by this time, I will have met an established REI that is willing to “take me under their wing”, and teach me the ways of the millionaire.

Within the next three or four years, I hope to have enough saved up to buy my first deal (I want to have a large down payment available, so the loan-to-value ratio will be that much smaller). Initially, I would just like to buy a rehab house and rent it out. My first deal will be more about the experience than the profit itself, though more profit will obviously be welcome.

Sorry for such a long post, but I just wanted to get the basics of my plan out there for you all to read. Being a 20 year old college student, I don’t have a lot of money and no credit to my name with which to get into the game as of yet. However, I do have something that lots of newbie investors don’t have: time.

Please leave comments with any critiques you may have, as well as additional advice that you may want to give. Thanks a lot ahead of time!

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Within the next three or four years, I hope to have enough saved up to buy my first deal (I want to have a large down payment available, so the loan-to-value ratio will be that much smaller). Initially, I would just like to buy a rehab house and rent it out. My first deal will be more about the experience than the profit itself, though more profit will obviously be welcome.

I have two thoughts for you.

  1. Don’t associate having a large downpayment with a low loan to value. I have bought many properties with no money down and still only have a LTV of 50% to 70%. That is possible because I bought at a BIG discount. Buying at a big discount is infinitely preferrable to putting down a bunch of your own money. Additionally, if you have to put down 20% on every purchase, how many rentals will you be able to buy?

  2. Your first deal should be about the profit, not about experience. Doing a loser for a first deal just means you’ll have to do several other deals just to make the whole thing break even. You’ve got time, you should do whatever it takes to learn this business before you buy a property.

Good Luck,

Mike

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Mike, thank you for the informative post. To be honest with you, this introduction was a copy from another board that I recently began posting at. Since I first wrote it, I’ve done some research and am leaning towards buying a house and rehabbing it, especially for my first one.

As a 20 year old, I have no credit built up. The thought of borrowing money has always made me nervous, especially that much for a house. I’ve never done it, of course, so I’m sure that fear will go away once I actually do it. Did you do many deals before your first no-money-down one?