I have an extremely low budget right now, but maybe in several years I will have a more comfortable baseline to work from. ( I don’t know all the terms yet ) What I mean by low is that my budget is under $5,000.
I definitly cannot afford to higher attornies, appraisors or lendors. My mother is a retired real estate agent so she can help me on that end. Plus the city I currently live in now has steadily gone up in population the last couple of decades and the market here is incredibly low compared to 2006-2008. I know I can spend this time educating myself and I plan to read What Every Real Estate Investor Needs to Know About Cash Flow… And 36 Other Key Financial Measures by Frank Gallinelli and The Intelligent Investor: A Book of Practical Counsel by Benjamin Graham.
I understand it’s wise to start small and if I take on debt make sure other people pay that debt. I don’t want to hold on to houses for more than 5 years tops each and I want to achieve wealth by the time I’m 35. I have not written down these goals yet on paper nor have I started making calculations on how much cash i would have to make a year to achieve wealth status. I live a simple lifestyle so I think if I don’t change my habits saving money as well as making money will help me in the long run.
I also want to be able to use this money gained and immediatly begin in investing more property and with each deal make more and more money. How can I decide what kind of property to invest in with my kind of budget… or if I can ask for suggestions. I hope that’s not the same thing as asking for recommendations. It would be good to have some quick turnaround with some good profit so I can build up some capitol. I was reading in another thread about trailor park homes… hmmm
You’re going to receive many replies, each telling you what you should do. So let me start with my two cents on the matter.
I’m of the mindset the best way to break into real estate is with lease options, with wholesaling distant second. Depending upon the deal and if you know what you’re doing, lease options are safe, relatively easy to understand and get deals, have little cash requirements, and no need for attorneys and banks. In short, they seem to fit your needs perfectly, like that of many new investors.
Take a look over at The Naked Investor for some ideas about this strategy.
Since money is a problem for you, I would recommend looking at mobile home notes (search for books by Lonnie Scruggs), becoming a licensed real estate agent & simultaneously learning how to become good at sales OR getting into the wholesaling. All can be very profitable.
This is my experience getting started and it might help you see a way you can go.
I have a full time job so money is not a “problem” per say. The problem is I also have a family and spending my earned money on real estate investing would not go over well with my wife. So I set out trying to spend as little money as possible with as little risk of losing money. Oh and because of my full time job, I don’t have a lot of time to invest, maybe 10 hours a week MAX.
The key to my success so far has been persistence and patience. It takes me a month what some full time investors can do in a week, but that doesn’t bother me.
I first started going to meetings (small meetings are best) and networking. Just showing up consistently I got to know people.
I found someone who would be willing to coach me as a trade off for me developing some websites for him.
Seeing that my main problem was not being able to answer phone calls and see properties because of my 9to5 job, my coach and I came to the conclusion that I needed a partner. Was lucky enough that another newbie member of the rei group did not have a job, so he had time but no money for marketing.
Now I’m in charge of all marketing and spend roughly $200 to $400 a month on direct mail. When the calls come in my partner handles them. We discuss and formulate our offers together.
We have a 35% 65% split on the profits when we wholesale our deals by assignment.
There is really minimal risk in our setup and it has worked great so far. We have closed our first two deals in the last 10 months and are really gaining momentum.
I’m not saying this is the way to go, but it has worked great for me!