newbie here

I am new to investing, so please indulge me for a moment.

I will be receiving an inheritance by the end of the year. I would like to purchase some residential real estate and get into the market. However, I am new to investing. Can anyone advise me as to how to get into the market with minimal risk. I will have a good amount of capital to work with but I dont want to risk it…Is flipping better then holding? I am not sure I want to be a landlord. Also when purchasing, should I use my cash or finance it? I am not sure I want to tie up precious capital. Perhaps use it only as the down payment. Should I partner with a mentor or go at it alone? Any thoughts would be very helpful! thanks angela


First, before beginning, you should decide which niche of investing suits you best/intersts you most. You will be one step ahead having some capital to use.

I personally buy outright for the lowest amount I can get the property for, rehab as necessary, get a new appraisal, and then refi to get my capital back out – then, as the shampoo bottle says, “rinse and repeat”…I still work full time at a ‘grown-up job’…

If you are really new, I would suggest NOT using large amounts of your capital. Use OPM (other people’s money) to the maximum extent that you can and fill the gap with your capital.

As a beginner, you might try bird dogging, graduate to flipping, and then decide where you want to go.

If you can find a solid mentor, by ALL MEANS get one! I would suggest the local REI club if there is one in your area…if not try to network with other investors.

My two cents (before taxes, of course),


Hi Angela! If I were you I would consider doing some private money deals. Since you have capital you can finance short term deals. You can finance downpayments, flips, wholesale deals, and the like.

Thanks for the helpful replies!

I do have some experience in rehabs, being an interior designer. My plan is to buy single family homes and rehab them with my husband and a small crew of workers, either flip them or hold them. Labor is very cheap in this town thankfully.

I live in El Paso, Tx and it has a large miltary base here. In fact, we will be getting 3,500 troops and their families this year and I know demand and prices for homes will be going up, property is still pretty affordable here.

My plan is to partner with an agent that has experience with small investors. What kind of comission rate does an investor noramlly pay to an agent? I certainly dont want to pay the going rate. Thanks again



If you are buying, you should pay your realtor exactly 0%…his/her commission will come from the seller.

When you start re-selling the standard is 6%. If you build a good relationship and do any kind of volume, you might get him/her to down to 5% but I would cross that bridge when I come to it. Trust me, a GOOD, hardworking, honest. loyal agent that you can depend on is worth the extra 1%!!!

Once you build a relationship with a realtor that “gets it”, he/she will bring you potential properties.

I’m retired from the Army and LOVE the military market. We have an AFB here and there is always a ready supply of renters that are being paid a monthly, tax-free allowance just for housing. If they don’t pay, they can get in big trouble! Most are very trustworthy and dependable.


OK explain this to me so I understand how the seller pays the commission or where did the money originate from to pay the realtor?

Seller wants $106K for their property I offer $106K… The realtor gets a 6% commission. Seller accepts my offer and the realtor gets $6k since I paid the full $106K, so it sure looks to me like I paid the realtors commission out of what I paid for the property not the seller?

The seller took my money I paid for the property and paid the realtor out of my money, anyway you look at it my money was involved in paying the realtor albeit just saying the seller pays the realtor, of course they did with my money.

So in reality you are paying your realtor.

John $Cash$ Locke


I understand this ‘twist’ and have seen it before…if an owner lists a house with a realtor, yes, technically the buyer pays because that’s where the $$$ come from, but it is the owner that has a contract with the realtor (probably for 6%) and the realtor has a fiduciary responsibility to the seller, not to the buyer.

If I am a buyer and I have a realtor working for me, my realtor’s proceeds come from the seller’s side of the HUD-1…

No disrespect intended, but you’re muddying the water with the abstract…as a buyer, I give a seller what I believe to be a fair price for a property (or else I wouldn’t sign on the line)…when the transaction happens, the money is HIS and no longer mine. What he does with the money is his business – but I’m going to guess, he is going to honor his contract (the ‘listing’) and pay the real estate firm (in fact, I can guess that the title company is going to INSIST upon it!). The firm, in turn, is going to pay the listing agent and give the ‘split’ to the other real estate firm who will, again in turn, pay my representing agent…

Normally, I (as a buyer) have very little leverage against the contract between the seller his/her real estate firm such that I could actually insist on a different percentage.

Now, FSBOs are a horse of a different color…

My two cents.



I did not mean to muddy the water, just thought I would tell the truth so a buyer would not get confused as to where the money really came from to pay the realtor.

Don’t believe that what I said was not the truth, just thought it is a shady way of saying the seller pays the realtor to get around where the money really came from, something about realtors being held to a higher standard, more ethics, etc.

Something like “the money your are paying for this property has a 6% realtors commission built in and so 6% of the selling price is used by the seller to pay the realtors commission per their contractual agreement.” To me this would be full disclosure, I believe realtors are required to give full disclosure.

I have heard this line so many times being used I wondered if any buyer really thought they were not “bottom line” paying the commission.

John $Cash$ Locke

Ahhh…I see.

I was going to use an example of “what if the transaction was a ‘loser’ and the seller had to bring money to the table to close…” For sure, the seller is paying then!

Have a great weekend!



You have a great one also, just having some fun with how someone presents their case when selling.

Just like asking if a used car has air-conditioning, and the salesperson sticks his head through the window, looks and says yes, wonder how many people ask if it works.

John $Cash$ Locke

Hi Angela,

Where are you from?

In the meantime, look to the left. There are plenty of great references from people who have made millions in real estate. Let’s not reinvent the wheel, rather find a proven approach that you are comfortable with. What works for me, may not be righgt for you.

Be careful. Much success,


$cash$ is 100% correct BUYER PAYS THE 6% lets say I needed to net 100k from the sell and I knew this so I would add 6% to this to cover the realtor fees if a realtor was not involved I would sell the same house for 100k so I as the buyer paid the realtor in a round about kinda direct way.

Howdy All:

I do not care who pays the commission. I just bought a duplex for $12,900. You figure the commission and who cares.

I also bought a house for $24,000 and spent $70,000 on rehab and sold it for $165,000. Here again who cares. I made $60,000 and the Realtor will get paid 3% and my listing agent will get $400. I could not have sold this property perhaps without the Realtor and MLS.

Amen Ted!!

Hi all,another complete newbie here, about to close our first deal, and seemed to have made a bunch of mistakes already. We are planning to move in the next 4-6 years and have contracts on 4 parcels of land in Tn. Since an auto accident prevented me from working ‘on my feet’, as before we decided to use settlement proceeds and home eguity to invest for income. We’d already fallen in love with the land , but the carrying costs till we sell our home here would be a struggle. We found a triplex in the area and we are set to close hopefully by the end of the month. Hasn’t been easy and there have been some unexpected costs, but the cash flow should be there. We are also looking at a 6 yr old manufactured home in great condition on a nice piece of land to rent out for income too.
Nervous jitters? You bet, and we realize we should LIVE where we invest, but…here we go.

Cardinal rule of investing, never fall in love with any particular investment or property. Don’t break this rule! The cash flow will be there if you researched it out, if it’s not there during research, it won’t be there when you buy it.