As well as for the long time professionals.
After you are done reading some of the over-view books and materials how did you go about deciding which way through REI you wanted to go (ie. Foreclosures, Lease Options, Rehab, etc.)?
Just looking to get a thread going on “How I decided to make my money!”
I’m new so I’ll take this one. It really depends on two things - how much money you have to start with and what do you know. For example you can read a book on foreclosures but you don’t really know anything until you go to one. This is why I think buy and hold for rent is the easiest way to get started. Now that I’ve started I’ve met others who have done more and learn from their experience.
Gil
For me and my partner, we are going the flipping route. We still need to talk to a title company so that we can find REO and pre-foreclosure properties that we can buy below market value, spend very little money in clean-up or get the seller/tenant to take care of it , then turn around and sell at market value.
We’re still trying to figure out how we can do this with nothing down and no credit check ( I have a Bankruptcy ). But we are doing it this way so we can make a comfortable amount of money to start our business together.
If any veterans are reading this, does this sound like a good plan? We think it is, but don’t want to get crushed… 
:o
I am a frustrated carpenter, so I like doing “fix and hold”…I get a great sense of satisfaction from taking a run-down property and fixing it up and hearing people say they like it…better yet, saying that they want to live there!
Keith
Does everyone just specialize in one aspect of REI though? I don’t know if it would get too confusing or time consuming to be an all around type of investor. My vision is to end up with Rental Properties but I can see buying and flipping a few homes to get the capital/investment to turn around and do foreclosures or (highly motivated sellers) on the court steps where I can take my pick of properties to then fix up and rent out for a good cash flow.
From what I’ve read so far each investment method has its Pro’s and Cons.
A lot of folks start with bird-dogging (to build funds), graduate to flipping and/or wholesaling, and then move to buy-and-hold. I personally see this as a very natural progression. I was fortunate in that we sold a home in the DC-area (and made a bit of money) and moved here where you can actually afford to invest in buy-and-hold.
It is also natural as a “buy-and-hold” strategy to find bargains in the REO/HUD/VA world as a way to leverage lower cost investment properties.
You’re right, all investments and investment strategies have pros and cons! I think that the advantages of buy and hold outweigh the cons. You have capital appreciation, principal reduction, income stream, and tax advantages all working for you and you do it with OPM!!!
Keith
Most of the time it involves a lot of variables. Do you have access to a mentor or not? Do you have cash reserves or not? Do you have outstanding credit or not? Do you have a good-paying job or not? And many more. These variables will usually dictate which path to follow at the beginning. As Keith said, the usual route begins with birddogging. I managed to skip that step due to good credit and a decent job, and go right into buy-and-hold, but I would have definately done it if my circumstances were different just so I could get my foot in the door. When your network evolves, your assets grow, and you become more knowledgeable, you can start picking your poison, so-to-speak.
Moving on to Mentors… I read in previous posts that joining a local REI club is essential (to find what banks do good financing… to find what appraisers and “handymen” are reputable and who should be missed) would people say it is best to have a local mentor as well, someone who can sit and have lunch with or is distance not a huge issue with todays phone/e-mail to find a great mentor that is in a different state compared to having an alright mentor that is local?
I would think a local mentor could have great benefits over a “remote” mentor. However, I think the most important part of this answer would be that it depends on how well you and the mentor mesh. I think a local mentor can have great advantage in that they know the local market. Also, they may be more accessible. It is difficult to go look at a fixer-upper with your mentor if they are on the left coast and you are on the right coast.
Just my 2 cents. (Please adjust for inflation which is in check if you remove all items that are not such as the essentials.)
Two problems:
1.) The local investment club that I was under the impression could help is apparently not open to “outside” people. What ever that means.
2.) We have found a mentor, but he is pretty tight lipped when you ask more questions than he is comfortable with answering. ( See previous post about credit checking )
Ok ok ok I have to ask this … bird dogging? Is that where I go and find homes for someone else? How do I get started there?
I hate this sort of answer but since I don’t know directly I have to defer to people that do in the “Bird Dogs, Wholesaling” section of this site.
My thoughts are that you would still need to get into that exclusive investment club to meet other investors (PLEASE ANYONE that sees flaws in my poor plan here give some feedback so all us newbies have good info). From what I’ve read you need to find the investors and find what kind they are looking for. I would say that start with 1 person, find what kind they like to invest in and start searching as if you were doing it for you… drive around, look online, etc.
Once you find an investor what it seems like is you get a relationship (which I would classify almost a mentoring style) and learn the ropes from them so when you start for yourself you have the experience while someone else is making the real profits but taking the real risks.
For my two cents I would think a Mentor is a little like a friend who is helping you learn while you are helping him/her find and get good property. A tight lipped person wouldn’t be my ideal mentor and I would look for others. I would think someone tight lipped is thinking he will tell you the “secrets” and you will steal his bargains.
Just my rantings.