Getting Started


I have just recently turned 18 and am looking at becoming a real estate investor. My interest is in commercial properties such as apartments. I am looking to buy and rent. I have been doing extensive research and have a few materials that I have been studying. I have some materials from Rich Dad’s Advisors that I have been studying.

I am eager to get started and eager to learn. At this point, I’m looking for direction: What do I need to do first to get things moving?

Anything and everything helps. Thanks for your time.

Welcome to this forum! I recommend that you spend a couple of hours reading through all the “getting started” sites. Then sign on again and tell us what your plans are. Good luck. You are not too young to begin.


Your question is such an open ended and too general of a question to be answered. How much money do you have? do you have the paperwork in place? do you know how to evalate a commercial property? do you qualify to buy one? how do you plan on managing it? if it needs repairs, can you evaluate the repairs? if it is not in top performing shape, can you make it perform better than previous owner? why was it not performing in the first place!

What I’m looking for is, how do I set up?

  • What are the things I need to do so that people will take me seriously?

  • As you stated, how do I evaluate a property?- I know I need to check out the taxes of the last twelve months, find out the occupancy,cost of maintenance,etc. But I know there’s so much more to it.

  • To start out, I’m looking at managing the property myself - until I can establish contacts and am able to hire some one to manage the property for me.

  • As far as money, I have none. I don’t know any 18 year olds who do. But from what I’ve been told, you can buy without any out-of-pocket expenses.

  • Basically, I’m starting from ground zero. No, I’m not looking to get rich quick. I want to learn the business and need guidance - maybe even a mentor.

The only thing I can say is - you must commit to this - with no reservations. Do not go into this with any thought that there is a way out. Picture yourself on the high diving board and you go all the way to the top - and the ONLY way down is to jump off.

these are only words and there is a higher probability that you will drop off in interest and not commit - prove me wrong!

:biggrinThanks for the encouraging words…

I know it wont be easy.
I plan on sticking it out.

Fabian, I think your starting point is education. With the proper education, you can devise a gameplan. Reading books is agreat way to get started. Here’s some recommendations.

  1. “1 Minute to Rental Property Riches” by Mike Rossi (Propertymanger)

  2. “The Millionare Real Estate Investor” by Gary Keller.

  3. “The ABC’s of Real Estate Investing” by Ken Mkelroy.

  4. “The Millionare Next Door”

You can also purchase the Carleton Sheets course on ebay for about $60. Be sure to get the most updated one with the DVD’s and the “toolkit”. Its a good basic course at a good price.
You’ll also need to work on building and maintaining good credit. You also need to work your butt off to buld up personal and investing reserves. There’s a lot to do but you have a lot of time & energy. Just focus those resources % education to developing goals and plans.
This site is filled with a lot of good people willing to share their knowledge. Welcome and good luck. :beer

Thanks for the resources!

I actually am listening to the audio version of The ABC’s of Real Estate Investing at the moment.

I’ll definitely pick up the others as well.

Fabian. The “Rich Dad” books are good and cheap. But I’d stay away from any expensive seminars. Regardless of who it is. The education you need is not expensive. I think I’ve spent about $250 on books. If you spend $20 on a book and learn ONE concept or strategy that makes you a few thousand (or more), its worth it. I got the most out of the ones I mentioned but I’ve also picked a few tips here and there from others.

I suggest you spend as much time as you need reading EVERY post in most of these forums. When I found this site, I started with the oldest posts and read from there up to modern posts in: Beginners, Carlton Sheets / Rehabbing, Landlording / Financing, Hard Money / Asset Protection, Legal / Commercial, Mobile Homes.
It will take you many many hours, but you’ll learn a ton. You’ll get to the point where you can read something and tell if someone’s giving the correct answer to a question. Usually if someone is wrong, another member will post below them and correct them.
Understand >4 units in a property will be regarded as commercial and will probably mean you have to come up with a larger down payment than for smaller properties or single family homes (SFH). You are young. Resist that urge to buy the most expensive car you can at this point. If you want to buy properties, that other stuff can come later. Don’t saddle yourself with debt. Be a good steward of your money and pay your bills on time. Open a couple credit accounts if you don’t have any already. Don’t close them. The older the trade lines on your credit become; the more they will help you.
Your education and bank account will help you to be taken seriously. If you learn and understand the buying process (evaluating properties for your needs, due diligence, etc), have the necessary money to put down, and income to support the property you’re seeking; you will be taken more seriously than if you have none of that in place.
Do a search (using the search button at the top of your screen) on here for the “50% rule.” There are tons of posts where people put up the numbers for a property for others on here to evaluate. There is so much more involved besides what you’ve listed. There’s also stuff you can’t account for because you don’t know how many evictions you’ll have, how much tenant damage you’ll have, etc. That’s why we use the 50% rule. It’s a good approximation for both the known and unknown expenses. You should personally verify any and all numbers the seller give you. I can almost guarantee the maintenance expenses will be lower than they ought to be. Many LLs don’t spend the money on their properties they should.
You’re going to need to get your paperwork in place to manage the property yourself. At a minimum, you’ll want a good lease that addresses as many points as possible and is legal for your state. You should also have a move in/out inspection form and rental application as well. You’ll have to decide what criteria you will use to screen potential tenants. Make PROCESSES. When I get an application for rental, I’m going to do #1, #2, #3 and so on. If I approve them, I’m going to require the security deposit up front and a full month’s rent. I’m going to require they have the utilities switched to their name before they get the keys. I’ll provide a receipt for the security deposit and put it in an account where I won’t touch it. You get the idea here.
If you write out your policies and processes, it becomes an automatic system that is both easy for you to follow and also fairly applied to all tenants (don’t want to violate Fair Housing Act laws). IF you’re able to manage the property yourself, why would you want to hire someone else to do it? It will cost you more money and NO ONE will be more concerned about your property than YOU.
Real Estate is not like you see on those late night infomercials. You need good credit and at least some money to do this.
Find some examples of properties for sale in your area that interest you. Talk to a couple banks and see what it will take to get you in that property (amount down, approximate closing costs, etc). You can figure approximate monthly payments on any amount using a simple PMT formula in MS Excel. This will at least give you a rough idea of your saving goal. If you’re looking at a 20 unit complex for $500,000 and the bank wants 25% down, that’s probably not a good place to start because of the length of time it would take for you to get the money for the down payment.
Most people will tell you to start with SFHs for several reasons:

  • You’ll be dealing with one tenant instead of several
  • It will almost always be cheaper to get into a single house than anything else
  • If you decide Landlording isn’t for you, you should be able to sell the house easier than a multi-family property (not everyone wants to be a landlord, so that limits your market somewhat for selling).

There are some benefits that go along with multi-unti properties:

  • You have economies of scale - One vacancy out of 10 won’t hurt you as much as having that SFH vacant where you’re stuck paying all the bills.
  • You have one structure to care for (instead of 10 different structures for your 10 SFHs).

There are plenty more things to each side. They both have their pros and cons. My wife and I started with a small multi-unit property and do not regret it. I didn’t find this website until after we started, so I’ve learned a lot since I’ve been on here.
If you want to do this, start educating yourself but also set realistic goals. So many people sit on the sidelines because they’re afraid to jump in. It’s not for everyone. Read the horror stories, but also understand not everyone will be a nightmare tenant. Many times you’ll see mistakes were made along the way that helped a LL get in a bad situation. Maybe they just threw anyone in their property just to get rent. Maybe that tenant had a history of domestic violence and now they’ve got holes in their walls.
If you have a goal of owning a property 6 months from now, find out what it takes and budget it out. You can start learning your state’s Landlord/Tenant laws, developing your rental paperwork, and developing your processes now as you educate yourself. Don’t re-invent the wheel. There are people out there who are successfully doing what you aspire to do. Take bits and pieces of what you like from different people and develop your method.
It takes a lot of work up front educating yourself and developing the things I’ve described. Once you have that in place, you just have to tweak things here and there.
I wish you luck. If you have some more specific questions, be sure to post them.

It looks like you’re getting all the right information here. Be sure to look for a site that was headed “100 will Try, But Only 1 Will Do It” or something to that effect. That was an excellent educational post for someone starting out.
Good Luck to You, and work hard.