Hi Im somewhat of a newb to realestate but my mother use to be a realestate agent.
Anyway, I have 30,000 cash I want to invest and I would like some pros advice. I live in auburn hills michigan but looking at properties in Pontiac MI.
Thankyou!
Welcome Tec…pull up a chair for a spell and read! When you’re tired of readinng, do so more…this site is a true wealth of knowledge and there are a ton of folks here to help you…
A few things:
(1) Don’t use all of your available capital – use “leverage” or OPM (“Other People’s Money”)…always keep some reserve.
(2) Once you start reading, you’ll find that REI is a multi-faceted gem. There are lots of ways to go. Find the one(s) that interest you and then research that area.
(3) How’s your credit? If not so hot, start working a credit improvement strategy to get you numbers up. Make sure your financial house is in order…REI can make you or break you. Make sure you build on a good foundation. It’s a lot easier!
Now…let the reading begin!
Keith
That was some excellent adive, I am a newb also and am trying to read as much as i can to try and at least get familiar with things before making any moves. i have a rehab lined up that i think i will be able to purchase for 250 and resell for about 350, it needs everything to be done, am i being realistic in thinking a one family 2 bedroom home can be fixed for about 40K
TH…here’s a few thoughts.
Start slow and simple. First go out and LOOK at a lot (say 20-30 even 50 houses for sale) of property. You must know your market; know what selling what’s not. IN end, good deal go fast so you must know one when you see it. Go find ONE really good deal and execute it (whther it a buy-n-rent, rehab or a flip). See if you like doing RE investments. It can be very rewarding and fun, but also a pain in the neck and stressful.
Second talk to lots of people. Also realize some fraction of what people tell is wrong or contains errors. By having a good support team of folks (realtor, loan officer, friends with REI experience) this should be able to keep you making mistake which cost you money and time
Hello, Both aak5454 and kdhastedt make good points. Keith mentioned reading and OPM. An education and having cash reserves is important. aak5454 mentioned knowing your market, this is also important. My suggestion to you is to join a local REI club and to network with people in your area. You will learn your market area and be educated at the same time.
TecHunter,
Keith and Chris pretty much told you how to get started READ!!!.
I have gained about 90% of my knowledge here on this site by asking questions after questions. I credit Robb (reoconsultants), Tedjr, Keith, and $Cash$, just to name a few. THANKS GUYS!!!
I’m also a newbi but, I have purchased 4 homes since Aug 30. I ONLY came out of pocket $1,000 total for these homes. I did what Keith told you and I used “leverage” or OPM (“Other People’s Money”)… . I would not use all of your 30k to buy homes with, there are to many deals out there to buy and don’t have to use your money.
So pull up a chair and start reading until your eyes start to burn and then take a 5 minute break and get back to it!!! That’s what I’ve done and I’ve learned tons!!!
Good Luck,
JOhn
I probably have several investments that would interest you, but instead, here are a few things that may help you leverage your $30,000:
- Learn to buy well below market with as little of your money as possible.
- Create an entity for the purpose of investing. Probably an LLC, but you should discuss it with an attorney or CPA and figure out what your exact needs are.
- Take your money and put it into a CD and use it as security for a loan in the name of your entity in order to establish business credit.
- Use the money simply to pay back the money.
- As I stated in one of my other posts, your goal (IMHO of course) should not be to become a real estate investor. Your aim should be to build a business that invests in real estate.
These ideas are a little “slow”, if you will-- but they help lay a foundation for growth so that you don’t stall later on. Remember, this is a marathon-- not a sprint. You can be quick out of the gate, or you can be here years from now, still running strong.
I hope these suggestions help.
Just like everyone else I’ll recommend that you read books on investing. plan to buy 1 or 2 houses in the
next 12-24 months. After that, as you mature as an investor and gain knowledge and a good network you’ll be able to buy several houses.
this is my 4rd year of actual investing i spent 1 and half years just reading. i should’ve started sooner but I was scared and I didnt have any money either!. i’ve bought 1 houses in the middle of the 2nd year and another one 6 months later.
another 8 months later I bought 2 more and since then I’ve closed 7 houses in the past 7 months and am in escrow on several more. Now its a lot easier. I can find people to put up the credit and the cash if I need too. I prefer to use my
cash for short term 2nd trust deeds that pay out 18-24% on average so thats another thing you might want to look into.
Just don’t rush into it. As Paul mentioned, its not a sprint but a marathon.
here’s a list of my favorite books
http://topbooklists.blogspot.com
couple additional thoughts.
as you can see on this board, there are many way to go about investing in RE. There is no single “right” way, but rather many ways to go about. In order to determine what is best for you, you should consider what your goal is in REI. Are you saving for retirement? trying to make it a career, trying make some cash to pay off bills. Each of these goal can make one or more methods of RE invest more suitable (or not). Likewise, different methods will also carry different risk levels and you should understand those prior to diving in. With respect to risk, if you go about REI in a reasonable disciplined manner, the down-side risk can be pretty minimal; especially compared to other forms of investments, however, it is not risk-free. You should steer clear of folks claims to have “bullet-proff techniques” or “risk-free strategies” (IMHO).
Happy Investing
Thanks for all your input fellow members.
I have a lot of friends who do invest, maybe ill try sitting down with them and gain some knowledge. I also have the Carlton Sheets program that I have had since 1999.
My goal is to make realestate my primary source of income, since I work in the Auto Industry (General Motors) :-, and with all the cutbacks going on I dont think ill have a job really soon. Also, I plan to help my mother who was forced to retire when she couldnt afford to, also due to cutbacks.
Im really looking forward too this and I know their are risks, but I we deal with trisks everyday. Thank you everyone!
good luck.
remember “A journey of a thousand miles begins with a single step”.
plan your time wisely. set deadlines to acquire the knowledge and take some action.