Hi guys (and gals),
I need a little advice on how to get the ball rolling with REI. I’m partial to flipping houses to start but I am a tad apprehensive to just jump in and get started since I have no experience.
I don’t know if I should concentrate on creative financing, traditional bank loans, etc…
My wife and I have pretty good credit scores (mine 650 and hers 700), she brings in about $60K and I am just about to start a new career as a pilot, looking at around $25K to start (I know, don’t laugh ). It seems to me that we would do very well but we have zero money to put down and have no real estate experience. Any advice?
Hi guys (and gals),
I will assume that you don’t own a home now, since you have “zero real estate experience”. My advice is to go to a mortgage broker and get prequalified to buy a house as a primary residence. That is the easiest way to get 100% financing. Shop for a great deal. Don’t buy something because you like the curtains or the yard or the paint colors. Buy something that is a little bit ugly but can be improved.
In other words, buy house for your primary residence but buy it using a logical process that you would apply to an investment.
Good advice Steve. I would add to always keep in mind that, on this first deal and probably the first few, it is an investment first and then it’s your home. Do the fix up with the eyes of the buyer but keep to a modest budget. You don’t need gold plated faucets in this first investment. There’s lots of great looking functional stuff coming in from China that’s real inexpensive to buy.
And make sure you have an exit strategy and a time frame. If this is to be the beginning of your real estate investing career, you don’t want it to end where it began.
Once you take yourself through your first purchase on a single family, usually the easiest transaction, and then through the sale, you’ll have tons of experience under your belt and then you can branch out. And hopefully you’ll have the cash to be a little more selective.
And hey, we’d never laugh at your salary. We all started somewhere and what matters is that you have the desire to go beyond having ‘jobs’ to creating financial freedom for yourselves. You’re to be congratulatad! 8)
Good luck. Keep us posted.
Thanks for the advise guys. It all really helps. I feel a bit handcuffed right now since I won’t find out where I’m stationed for another 4 months. My plan is to use these next few months to educated myself on forums such as this so I can hit the ground running once I move.
I also forgot to ask…how am I to go about learning what to look for in a rehab home? I mean, obviously I know to look for places that basically all that is needed is a facelift or some minor structural work. More importantly is how will I know if a property has major structural damage that may be hidden without having a costly professional look at it? Since I am a real newbie I have no idea what clues might exist to let me know to pass due to structural damage. :-\
get in contact with a real estate inspector. Explain what you are trying to do and develop a relationship.
If you are going to be successful in REI you need to build up a team.
Your team would consist of;
Real Estate Inspector, Real estate Agents, Mortgage Brokers, Title Companies, etc.