I am a young professional looking to get my feet wet in REInvesting. I have background in it in that I worked as an analyst for a commercial lender for a few years and have always been interested in construction/development/etc. So, I am not completely new to the industry.
What would be your recommendation for starting off? Get a real estate license? Get more reading material (I’ve read books off and on over the years)?
I am more interested in commercial real estate rather than residential. Before jumping into commercial, do you all recommend starting off with the less complicated residential, first?
Any tidbits would be welcome!
Thanks!
F
You don’t need a license to invest. I’d only get one if you plan to start selling too.
You don’t need a realtor’s license.
Commercial property is notmore complicated…just different than residential.
The only reason why I would say to start in residential, if you don’t have any money. Commercial is not the place to start if all you can do is no money down deals.
Regards,
Patti Porter
Patti,
Couldnt one use HML for down payment provided the numbers worked?
Yes you can use hard money if the numbers work. However, what do you do for reserves? There are also other “little” things such as lawyers fees, marketing, etc that can cost some money.
Patti Porter
I’m looking to get started with RE investing too. I was wondering how I could locate equity partners. They would put the money for the down payment and I would manage the investment in exchange for an equity. Any ideas will be appreciated!
What you’re looking for are private investors. There are some lenders that will take a stake in the equity and loan you the money.
Of course this depends on the property and your experience level. If this is your 1st deal, I would start looking for private investors in your local area. Try the newspaper and local REIA meeting.
Patti
Getting a real estate license is not a bad idea. Yeah I know you don’t need it but with it you get a 2-3% discount on all your purchases if you buy off the MLS.
When I first started in the business I got an appraisers license. The course work was intensive and it gave me a firm foundation of how to value both residential and income properties. Depending on your states regulations, you may be able to start doing appraisals immediately after you get licensed.
This is a great way to network with lenders, realtors and private investors!
Thanks Patti and Guru. I know getting a broker’s license would automatically open up a lot of opportunities and help build a good network. Unfortunately, that seems difficult because I’m doing full time job. It pays well, so cannot think of quitting it.
I think like Patti suggested, it would be a good idea to start with the local news papers and the local REIA meetings.
Do you folks think that the cap rates will go higher? The cap rates here in SoCal are anywhere from 3-6%.
Also, historically have the cap rates been higher than the interest rates?
Cap rates in California are brutal. It will be hard finding a property where you’re getting a positive cash flow. Most investors that buy in California are banking on appreciation versus cash flow.
Just look at the numbers and see if it makes sense for you.
Patti Porter
Patti,
You are right. It’s overpriced here in CA. I m planning to get a commercial property and come up with multi-businesses ready to lip flop in order to pay for the operating cost . I am also look into rent it out. The starting point is always hard and sweaty 
Do you folks know of any area which is good for investing right now?