New investor, age 24, looking for advice!

General Real Estate Investing
1

What’s up everyone? My name is Sal and I currently work in Kuwait as a contractor. When I return home I want to make near perfect REI decsions. I have been soaking up as much as I can get my eyes on, as far as REI information. From what I can gather I think my first purchase should be a foreclosed property (SFH, townhouse, condo) to live in until I can get it paid off. Once its paid off, then I can buy another property and so on…

Im still not sold on apartment complexes. If I did do it I’d want a property manager to do all the work so I had more time to make money. My main question is this: If you were me, with say 100-200k to invest, knowing what you know now… WHAT WOULD YOU DO?

I appreciate your time and advice,

Sal

2

Everyone’s strategy is different, but most of the successful investors leverage themselves. I would suggest leveraging the money you have to invest in more than one property, don’t use it all to pay cash for something you are going to hang on to.

3

Although I am a beginner myself I would have to agree with reiauctions…you have the first part somewhat right. Foreclosures can be tricky, if it’s not foreclosED. A property that is in the forclusure process could still have liens on them and more tricky a mechanics lien, they don’t always show up till later. You don’t necessarily have to buy a foreclosed property to find a good deal. I would buy a fixer, fix it up, live in it for 2 years to avoid property gains then sell it, and repeat the process till you have enough equity to buy a house cash. This is for the properties you live in. Investment properties, being properties you don’t live in, I would say, form an LLC, buy a fixer, fix it up and hold on to it for passive income. Experts please feel free to correct me if I’m wrong.

4

Those don’t exist. And frankly you are just jumping into analysis paralysis. Find what you want to do, learn the BASICS. Jump in. Ask anyone here who has been in REI for more than 40 years, and I guarantee they are still learning. There is no way you will be able to know everything or make “perfect decisions” before you get started.

Good luck and have fun out there!

5

Thanks for the advice guys. I am definately over analyzing things!! I have alot of time to think out here in Kuwait and it drives me MAD with all the possibilities.

I’m assuming that the more money you have to invest with initially, the more leverage and better off you will be. So using this logic, I’m thinking about extending my contract in Kuwait and staying for another year or so.

Would you guys cosign that notion? More start up capital = faster snowballing of real estate leverage and profits?

6

Personally, I think that as long as you have a few, hopefully closer to ten, thousand, you will have more than enough.

How much is marketing? You could have a very nicemarketing system in place for a few thousand, IF you dont want to do anything yourself. Do it all yourself and you are looking at supplies. I have nothing better to do this summer other than answer the occasional phone call, so I will enjoy the weather and pass out my own fliers. I printed them free at school this past year. My bandit signs were 200.

You might want money for repair costs if you are going that route I guess. This isnt necessary though. If you are thinking you need 20-30k to put down on a house I think you should do some more reading and researching before you jump in. There are so many ways to do a deal for nothing but maybe movey money for the folks.

To be honest, I would do what I am doing and get into wholesaling first. I dont need the struggle of going beyond gettign the deal at this point in my career. Once I get this part down pat I will maybe go onto flips with the help of my step father, then maybe rentals. No time soon though.

From the way you talk I would be willing to bet you are good savings wise. You dont come across as flat broke and desperate.

Whatever you do, I would not suggest using “I need more money” as an excuse to stay in Kuwait and try and study more. I did this last semester in college. I used the fact that I was 2 hours away from my target area as an excuse to not get started and to just keep on reading. Only you know if that is the situation though.

A vet might bust my chops and say I am wrong because I could be, but I do not think you should be as focused on profit from leverage this early. More money does not mean more leverage, it just means more houses. More leverage would mean over the same amount of money you buy more houses.

Therefore based on my last statemnet, this notion is wrong. In my opinion you are too “gotta go put 10 down.” Get the deal first, then decide what the best option is. You might find that instead of looking for that deal to get 10 down on, you will be more successful finding what each specific deal needs to succeed.

7

Woa woa I jsut caught this. So youre only going to buy another house every 15-30 years?
Maybe I am misreading

8

LOL, yea that sounded bad. I definately would not. I just dont want to get in over my head. Education and experience will fix that though. I understand the concept of taking out loans against equity in existing properties.

I think I’m going to buy the Carlton Sheets “0 money down” program to learn more about aquiring properties on the cheap. Thanks for the reply guys!!

9

everyone wants advise but no one ever say where they are. The advise I give may be completly irrelevant to you and your market. If you want advise on your local market please state your location so an experienced REI may assist you properly.If you are looking for the key to success in REI, you are holding it between your ears. The knowledge you recieve will open your door to success.

10

Great post Cambellgroup! That is exactly what I"m doing… learning anything and everything I can. Once I get a broad idea of the game I will focus on something that I think will work for me.

I will be moving to CHICAGO, ILLINOIS when I’m done with Kuwait. I will be in the city itself, or the close surrounding areas. I will get my agent license and switch careers to real estate sales. Im very excited and cant wait for it to happen!

Sal :biggrin

11

Good luck Sal and dont forget about the little people when you make it big in the Windy City.