Newbie Questions - Starting from the Ground floor!

General Real Estate Investing
1

Hey folks,

I am new to this type of investing. To give you some of my background, I am currently renting an apt. (for about a year) - have moved to new area due to family in this locale. I’m 56 and single - 1 child out of home now. - No real constraints, but my financial situation has changed over the past 2 years. Basically, lost everything financially and starting over. My credit has hit rock bottom over the financial pitfalls I encountered within past 2-3 years. My retirement fund is tied up legally so I can’t utilize that. Have used my savings over past 2 years and now find myself starting over.

I want to believe REI is possible - but want to stay realistic. I understand there are challenges ahead but am willing to make the necessary adjustments to make this happen.

I am in the midst of reading and absorbing the concepts - just want some advice from those who have been in the game so to speak.

Where do I start - not much money and my credit has been damaged. They say you can purchase homes/property - etc. with no money down and hold for a period of time and then cash out and go back and do the same with other property.

I feel like I don’t have a lot of time to waste here - due to age and energy!

Your suggestions would be greatly appreciated.

2

You should never feel you have to get started right away. No matter what your situation. If you jump in without knowing the concepts of what it takes, you could find yourself in worse shape than before. The hard truth is, there are no short cuts and none of it is easy. For starters, you have to fix your credit. That will take a few yrs of on time payments. During that time, you need to save as much money as you can. Take this time to get educated about REI. Read as much as you can. Be a sponge! . Getting your finances, credit and education in order is most important. From there you’ll have the education and resources to form a plan. A book I’ve found helpful is “The Millionare Real Estate Investor” by Gary Keller. It’s not a get rich quick book. It has solid advice and explains the required concepts very well. This site has a lot of useful information also. Good luck.

              Mike
3

Welcome…spend some time reading through this awesome forum to see which strategies appeal to you. Attend your local REIA meeting(s) and network with others. Anyone with the right mindset (and action to back that up) can succeed in this or any other business.

Chris

4

I’d suggest these activities to get you going:

Start reading everything you can. Read the posts here, as well as at www.flippinghomes.com. At both sites are also lots of free articles and ebooks. As you get some money, consider getting 1-2 courses, but not until you have determined from your other research which ones might match the way you want to go.

Start doing what you can to improve your credit situation. Sacrifice what you have to. REI can be done with no money and bad credit (I have done it) but it is so much easier and profitable when you have money and good credit, especially in today’s market.

Get to know your market. Check out listings. Drive around neighborhoods. Go to the county courthouse - online if available, in person if not on Internet - and familarize yourself with how tax records and court records are accessed.

With no money and no credit, your best bet to start is to birddog. Start contacting real estate investors - landlords, rehabbers, flippers, wholesalers and the like. Do this by calling the “I By Houses” bandit signs and ads in the papers, For Rent signs, and start attending any local REI Clubs in the area.

Ask them if they will pay you a referal fee if you bring them deals. Ask them what kind of deals and in what kind of areas they like. Then go out and find deals that meet their criteria. You pass the lead to them. If they buy it, they pay you the referal fee. You get to earn cash while you learn the market and see first hand how the business works.

WHen you have enough contacts and a bit more cash and experience, start wholesaling properties. Before long, you’ll be buying houses yourself.

Good luck

5

Rei2sell, if your credit and finances were OK before the divorce, you have a head start upon many other beginners, because you already know how to manage yoour finances and you have already experienced how to make money.

It’s probably no longer possible to buy a house for zero down, hold it for awhile, and resell it for a profit. The lenders have tightened up and they are being stingy about giving money out. They rarely give zero down loans anymore, and not to people with bad credit. Prices are not going up like they have been, so the buy to sell later is risky, since it relies upon appreciation. (buy to hold is different, but you must have funds and credit to do that)

However, this is a very good market to make money in. You make the most money, the easiest, by getting super bargains when you purchase. In many parts of the country, there are foreclosures and sellers who are getting desperate to sell, and willing to let the house go cheap. So it’s possible to learn how to buy for a great price reduction.

If you have no money and no credit, there is a limit to what you can do. Bird dogging, sandwich leases, and wholesale are about it (unless you have some special job skills). But you can parlay those activities into some cash that will allow you to participate in other real estate activities.

Hang around for awhile and read, and that will help you decide what questions to ask. A general “how do I do it” is the subject for an entire library of books, so you will get better answers if you can reduce your questions to small bites.

If you want to invest in real estate, your credit is your most valuable asset. We do a lot of our deals with borrowed money, and in today’s market, you need your good credit to borrow. So as you get back up on your feet, put repairing your credit on the high priority list.

I’m about your age, and the thought of starting over from zero gives me screaming nightmares, so I am feeling a lot of sympathy. But the truth is, I know how to do it, so I could do it if I had to. You can learn how to do it, so you can do it, because your options are limited: either get back on the horse, or claim your shopping cart.

6

To all of you who have responded … Thanks.

I appreciate your “No Non-sense” answers. Sometimes the medicine is hard to swallow - but I’ve been around long enough to know that dreams don’t necessarily happen overnight. Just knowing that there are people out there who won’t pull any punches and give me straight facts is refreshing.

Sometimes people simply want to hear what they want to hear. I don’t have time in my life right now to do that - I want to hear what I need to hear. It makes for an easier transition at this stage in life. Success only comes to those who diligently seek it and then only to those up to meeting the challenges they encounter with sober decisions.

Thanks again to you all.

I will keep you posted for the future. … til then, I will focus on credit and savings and education.

Best to you all in your RE endeavors.

REI2sell4U