I am currently working as a full time nurse and have the desire for something more. I would like to make more money (surprise, surprise), but do not want to be tied down to a 9-5 weekend job. Real estate struck my fancy, however, I am completely puzzled as to where I should begin.
Well, the average person my age searches Google for answers and what do ya know, that’s exactly where I went. Horrible idea that was!! I think I was more confused after reading through the countless websites then before.
I am also looking to purchase a home within the next couple of years. I am currently renting and attempting the minimize my debt as much as possible before buying something. I know I have a long road ahead of me, but I would greatly appreciate any ideas, suggestions, guidance or experiences that I can learn from.
Briel, one of the common problems for the new investor is information overload. . .much like you just described. Too much info, much of it conflicting and erroneous. We call it the Paralysis of Analysis. Simplify things and you’ll progress much more quickly.
For most beginners, the best approach is either with lease options or wholesaling. They are generally safe and don’t require much in the way of start up capital. That’s where I suggest you begin to narrow done your choices.
For lease options I recommend Michael Carbonare over at The Naked Investor.
For wholesaling, try Steve Cook.
Whatever you decide, do yourself a favor and don’t try and know everything from day one. In other words, put down the reading material and start taking action. Market, speak with homeowners, make offers, etc. That’s how you progress. Good luck!
I think the best thing for a new investor who currently rents is to buy a 2-4 unit.
Take advantage of all the owner- occipied financing and tax-breaks.
Get your spending under control, but don’t worry about eliminating debt before investing: Really depends on what kind of debt.
I had a friend who wants to buy a house and has a minimum wage job and 9K in credit card debt.
I have another friend who wants to rent the same apartment for 7 yrs to give him time to pay off his student loans before buying.
Both these friends are wrong in my opinoin.
I agree with HPM above - there are some great opportunities out there for new investors, with owner occupied financing, seller financing and tax breaks.
If you are new in real estate, wholesale flipping (selling or assigning properties without actually buying them), would help you build a cash reserve. Then you could move into buying some properties to hold for a portfolio (cash flow and appreciation.)
Find someone (an experienced and down-to-earth real estate agent) or an investor-mentor to help you get started and avoid costly mistakes, which could scare you away from the business.
we are also newbies to the business and would love to hear from any who can help us get started…have not gotten our feet wet yet but are doing lots of homework and need to know what should be our first step to get going
I would start by finding your first property and would surround myself with others that know your specific market well. If you’re still renting, there’s never been a better time to buy so why not start there by owning your first home.
You can start by finding a home that needs some repairs and later, can rent it out as an investment property as you move onto your next one or sell it when the market is better and use the proceeds to move on to your next one… or refinance it after owning for a year or two and use those proceeds for another investment! There are many possibilities of what to do with the property after owning for a while…
But first, just get out there and start looking at properties. After a while, you’ll find out which are the good deals and which aren’t. And along the way, network with others investors, agents and real estate professionals in your area and learn as much as you can from them
Yes, learn your market,there might be an area that looks the same, but homes on one side of a street go to ‘x high school, homes on the otherside go to "y high school’,that can make a big difference, one school might be considered a lot better than the other (even being in the same school district)
Most of my renters have kids, to what schools they will go to is a big thing,also if your looking at a particular house go to the central appraisal district’s site and look at the mailing address for the homes in the area, is it the same address as the home, or is it somewhere else meaning its a rental property,sounds funny but I stay away from areas with many rentals
First off, I commend you Briel for taking action and doing something. That is a HUGE step and one that is critically important.
Now, there is a TON of information here on this forum and I’d start reading through here. You mentioned that you are a nurse by profession. My mother has been teaching nursing as her career my whole life I’ve been around a lot of nurses and I know that if you’re a nurse then you’re more than capable to study and learn this real estate business. You can do it.
Many folks here recommend the following:
Wholesaling - which is basically finding sellers that need or want to sell and are willing to trade equity for a solution to the challenge you are helping to solve. You control the property (usually with an assignable agreement to purchase the property or an assignable option to purchase the property) and then you sell your right to buy the property to another investor or owner occupant who ultimately will buy the property. The difference between what you agree to buy the property from the seller for and the price your buyer agrees to pay for it (minus your marketing and business overhead expenses) is your profit.
Lease Options - you find a seller that is willing to lease the property to you and also give you the option to buy the property at some point in the future. In many cases, you will then find a tenant buyer who is interested in leasing from you and who ultimately wants to buy it from you in the future. In some cases, you may work with the seller to have them work directly with the tenant buyer you find. You often make a profit between what you pay each month to your seller on your lease and what you collect from your tenant buyer with their lease. You should also intend to profit on the price you are buying it for and the price you are selling it for (some of which you may get as a down payment from your buyer when they begin leasing).
This is an oversimplification of these strategies but should give you a big picture overview if you’ve never heard of them before.
A third option, which many people group into wholesaling that you might consider is what I refer to as bird dogging. Many other people consider bird dogging and wholesaling to be the same thing. I don’t. Bird dogs are more an administrative (less face to face sales) role where you seek out and find properties and then turn the property over to a wholesaler or real estate investor to do the actual negotiating, buying and selling. It may allow you to work closely with a few local wholesalers/investors and begin to learn the business with them while you earn a little money. Bird dogging does not usually pay nearly as well as wholesaling.
If we can help in any way, post on the forum. There are some great folks here that are givers and are more than willing to share.
Please do keep me posted on how you’re doing. I am routing for you; you can do it.