Getting started

Financing, Hard Money Lenders, Private Money
1

Hey y’all.

Like many, I’ve been pulled into the relative REI gravity the last year or so, and am very interested in starting out.

However, when I begin reading some of these forums, I get really confused by all the terms and techniques. I obviously don’t want to blunder into some deal just to be into something, but at the same time, don’t want paralysis by analysis.

So, I thought I’d pose this to y’all and see what response you’ll give.

Knowing what you know, what would you do if you were just starting out now? I’m in my early 40’s, don’t have much, (any) savings, and realize I need to participate in some form of investing if I’m going to have any hope of retirement. I’ve been foolish and impatient for much of my financial life, but am beginning to see the light. (Gary Keller’s “Million Dollar Investor” has really helped my mindset quite a bit.)

I realize there are a lot of options to acquire properties with little to no money down, but I also realize there are plenty of ways to get confused and quickly get into something akin to a horror story. (Don’t want that.)

Here are my goals:

To retire in 20 years with $4-6k per month in passive income. (Perhaps more, if COL increases.)
To be financially secure past that for life.

I have a wife and 5 children. College is not a strong suit with me, and if my kids want to go, their grandparents have already prepaid for 2 years.

I know “the sky’s the limit” with investing, but I’m just not interested in making absolutely as much as I can; always being on the lookout for the next deal, etc. I want to participate in a very good investment medium, (RE,) and work with it until it produces what I need. That’s about it.

I don’t want to get super fancy. I get confused fast with tricky details and “creative” financing. If there are solid programs available, I want them.

So what say you? Can you give me a simple roadmap I can work that will bring me what I need, according to my tolerance level and past financial challenges?

I do appreciate your help!

2

Short answer: focus on one area of investing for the time being. If you try to learn everything about every type of real estate technique, you’ll only serve to confuse yourself and get discouraged. Any beginner will best be served by getting good first, then worry about getting big. The best way to begin, I believe, is via lease options and options. Safe and simple. Best wishes!

3

:cool I agree with AJ 290 find one way that you know you can work and work it do not try and be it all !!! YOU can add other ways to your real estate doings as you go KEEP in mind this as well not every way to get real estate is going to work every where the same

BUT do do your program that works for you and your area /// it may turn out to be a little of more then one type of real estate

THINGS like options and birgdoging , note brokering in some way all are low money needed to do and will get you started with some cash comming in

GOOD luck and if i can be of any more help just ask !!! :beer

4

Excellent responses. I really appreciate the perspective. Indeed, the little I’ve read has been confusing for exactly the reason you describe: its too much to handle at once for a novice.

I would like to keep my eyes on excellent deals, and not waste my time with marginal ones. I think that’s a good way of going out. Only looking for outstanding deals is what I’m after. I won’t find them every day or every week, but I do believe if I keep looking, I’ll run across one or two a year, and that can go a long way towards my goals.

Question: How do I finance those great deals with little to no money down? I’ve heard and read a lot, but I’d rather get the opinions of people who actually do these deals.

Thanks again!

5

:cool IF there is 1 there is 100 ways it all comes to how much cash you do or do not have

YOU could buy sub2 you could owner finance // with a simultaneous close YOU could lease option and there is more just as i said falls in to how much funds you have to work with //// and what the sellre is will to do

6

I agree with RE 001, it certainly helps the deal when there’s cash to put in.

In the absence of cash, you may want to seek out a local investor who can show you the ropes and help get you involved in some of their projects. Check your local paper in the RE section or classifieds for investors.

You may want to offer your services or expertise in trade.

Good luck.

Craig

7
Can you give me a simple roadmap I can work that will bring me what I need, according to my tolerance level and past financial challenges?

no such “simple roadmap”. there are many that have been written. i’d say follow one of those. buy one of Shemin’s books. do what he says and see what happens, but you’ve got to do it.

are you a hard worker? i mean, are you willing/able to work 6 or 7 days a week?

8

What does sub2 mean?

9

It means you take over their payments. Lenders sometimes have a ‘due on sale’ clause that tries to prevent those other than the original borrowers taking over payments. But they really don’t care as long as the payment is being made. Many mortgages are sold in the secondary market anyway and it’s all about the numbers. You probably won’t get the BEST deals if you can’t offer all cash. But I know a few investors that got started with owner financing, subject to, and lease options. It definitely happens…

10

Thanks for the info. I did have another question…if we used a hard money lender and upon the end of the term (which is typically 1 year, is that correct?) what happens if the property doesn’t sell?