Real Estate
Sponsored by

First time getting into Real Estate

2,708 Views | 20 Replies | Last: 3 yr ago by jagvocate
AGinNB
How long do you want to ignore this user?
AG
How's it going Aggie Family?

I've never posted on Real Estate forum before but figured there are plenty of Aggies with a wealth of knowledge in this realm. I'm not looking for any handholds or free tickets, just some advice. I'm 27 years old living in Nashville finishing up my master's degree in December. I am getting my degree in Mental Health Counseling and want/plan on working with Veterans that suffer from PTSD. I obviously didn't get into this field for money, but I want to diversify my income and create multiple streams to be able to provide for my family. I've always wanted to get into real estate and so I ask, what do you think is the best way to start out? Any websites or books I can read that will help guide me? I would also like to eventually get into commercial real estate one day, but want to take it one step at a time.

Anyway, apologies for the long spiel, and thank you to anyone who can provide some insight. Gig'em!
evestor1
How long do you want to ignore this user?
Learn how to make your own financial models

Do not partner with anyone

Start small

Start quickly so you can earn the tax benefits of being a pro



And stay out of houston. I dont need any more folks running up on my game!


Red Pear Realty
How long do you want to ignore this user?
Sponsor
AG
Biggest thing I could tell someone in your shoes is to go do a deal. 95% of the people you meet don't have the drive or the guts to go buy a single rent house, let alone grow an investment portfolio that allows them to quit their day job, do the things you want to do, and create a legacy. That includes the people with fancy business degrees and people working in the industry.

Next, learn to learn. Don't read one book on real estateread them all. Find a mentor, humble yourself, and listen to their experiences. Read Bigger Pockets. Listen to podcasts and watch YouTube videos. My favorite real estate investing book is The Millionaire Real Estate Investor by Gary Keller, who is a billionaire.

Work with a good agent to help you find deals. 80% of deals are brokered by 20% of agents, which means 80% of agents are useless. Whittle it down further by finding an agent that's an investor also.

Learn how to use leverage.

Set goals for yourself and try to beat them, AND, continually expand your purchases. Something like...Do 1 deal in year 1, 2 deals in year 2, 3 deals in year 3, etc. There is no reason you can't be a millionaire in 5 years. Go do it.
Sponsor Message: We Split Commissions. Full Service Agents in Austin, Bryan-College Station, Dallas-Fort Worth, Houston and San Antonio. Red Pear Realty
hopeandrealchange
How long do you want to ignore this user?
Red Pear Realty said:

Biggest thing I could tell someone in your shoes is to go do a deal. 95% of the people you meet don't have the drive or the guts to go buy a single rent house, let alone grow an investment portfolio that allows them to quit their day job, do the things you want to do, and create a legacy. That includes the people with fancy business degrees and people working in the industry.

Next, learn to learn. Don't read one book on real estateread them all. Find a mentor, humble yourself, and listen to their experiences. Read Bigger Pockets. Listen to podcasts and watch YouTube videos. My favorite real estate investing book is The Millionaire Real Estate Investor by Gary Keller, who is a billionaire.

Work with a good agent to help you find deals. 80% of deals are brokered by 20% of agents, which means 80% of agents are useless. Whittle it down further by finding an agent that's an investor also.

Learn how to use leverage.

Set goals for yourself and try to beat them, AND, continually expand your purchases. Something like...Do 1 deal in year 1, 2 deals in year 2, 3 deals in year 3, etc. There is no reason you can't be a millionaire in 5 years. Go do it.


This is great advice.

I know so many that talk a deal to death. Just buy something and understand failure is not an option. Each one gets easier. In three years you will not remember what you paid for your first property so don't let a few grand kill a deal. Ownership is power. Many are expecting inflation to skyrocket so buy sooner than later.
Jevertson
How long do you want to ignore this user?
AG
Agree on the going and doing a deal but would add that you must buy at the right price. Don't overpay just for the sake of doing a deal.
hopeandrealchange
How long do you want to ignore this user?
Jevertson said:

Agree on the going and doing a deal but would add that you must buy at the right price. Don't overpay just for the sake of doing a deal.


I disagree. I would rather close a deal and spend a few years recouping the cost than to have never done a deal at all. I have seen so many young people talk about getting into real estate but let a few thousand kill every deal. Buy something.
AggieT12
How long do you want to ignore this user?
AG
Agree with emerging yourself with BiggerPockets and YouTube. So much free info out there. BiggerPockets has a fairly new podcast called the Real Estate Rookie podcast as well as their normal one. Tons of free information out there to learn all different strategies but won't fully understand until you get started on your first deal. Analysis paralysis is a real thing and don't expect to get rich on your first deal but learn from it.
Tex_Ag_2017
How long do you want to ignore this user?
AG
I am 25 years old. Been working now for almost 3 years as a real adult. I have acquired 1 rental property over the last few months. While looking, I looked for over a year and got hung up too many times trying to do a 2% rule meaning that you want to get 2% of what you paid for the home in rent each month. It seemed so doable until I actually started to find a house cheap enough to make it work. You can still cash flow and build good equity doing a 1% rule. I found that in my area most houses grow in value of 6% a year on the conservative side. I looked at 40 or 50 houses until I finally found the one I liked. I made many offers following what Bigger Pockets people have said to do. It really can't hurt you to make offers, even well below asking price. You don't know the people selling the house and it won't hurt your reputation low balling until someone takes an offer from you.

Make sure and line up financing before buying. I've spent 100s of hours on the phone with banks and mortgage companies. Local banks are my favorite. I found one who would require 15% of asking price to fund a house that needed work done to it. You want to build a good relationship with a lending officer so down the road you can use equity of your houses you own to buy more houses without having any money down. In my opinion, I would rather leverage myself and use 100k to buy 4 or 5 houses instead of buying 1 house with cash.
MAS444
How long do you want to ignore this user?
AG
2% sounds crazy to me. So you want to get $5,000 rent on a 250,000 property? 1% even sounds high to me. I've got a small commercial property that's overstuffed with tenants paying market rent and I'm not quite at 1%.

Are you only using the financed number when making that calculation?
Martin Q. Blank
How long do you want to ignore this user?
MAS444 said:

2% sounds crazy to me. So you want to get $5,000 rent on a 250,000 property? 1% even sounds high to me. I've got a small commercial property that's overstuffed with tenants paying market rent and I'm not quite at 1%.

Are you only using the financed number when making that calculation?
You'd only be able to achieve it with lower income properties. You buy a $40k house and charge $800/mo in rent. You're dealing with those types of tenants though.
schwack schwack
How long do you want to ignore this user?
AG
Do you have a family now? If I could go back to 27 and single or just the 2 of us, I'd buy a duplex & live in half - hoping to get the mortgage payment - or most of it - from the tenant. I'd stay for a while & save up money for the next down payment & go from there.

Your goals & strategy can always shift, just keep looking forward & adapting to changes in your market.

Starting out in 2015 in small town East TX, we purchased a 4-plex figuring that that the chances of it ever being totally empty with no income would be rare & that has proven true. All are 1/1 units and we do have a lot of movement - but never all empty at once. We then bought a duplex - same strategy. Then another duplex. Fast forward a year or 2 & our city gave a bunch of abatements to a "big city" developer that has come in with 138 "luxury" apartments - and another complex on the way. Our apartments are very nice and in charming historic buildings/neighborhoods - theirs have granite countertops, pools & weight rooms. After we lost our first tenant to them - I'll admit, it hurt my feelings - we knew we needed to change our focus.

We have since shifted to small, single family & have 7. So far, no one has moved out since moving in. It's a pretty amazing non-turn-over rate on those. Currently, our multis are all rented. We are still below what the new place charges & realize that we might eventually have to lower some rents - but never our standards - with the added, newer competition, but by the time that happens, I think we will have just about recouped the purchase price & renos on all of them, so we'll still be OK.

We will have every dime put into the 4-plex recouped next month. We are able to buy fixer uppers & do a lot of work ourselves. We try to get our money back in 5-7 years per property.

Good luck on your life's journey. We got into this late to supplement our retirement - wish we'd started at 27!





schwack schwack
How long do you want to ignore this user?
AG
Quote:

You'd only be able to achieve it with lower income properties. You buy a $40k house and charge $800/mo in rent. You're dealing with those types of tenants though

Depends on your market. It's getting harder to find them, but in a small town it's still possible to buy a fixer upper in a great neighborhood & get great tenants.

Example: We had driven by a small, empty house in a cute neighborhood for years. We contacted the owner & amazingly he was ready to sell (from the neighbors we heard that people had been trying to get the house for years - it had been empty since 2005). We bought it for $27K and put about $30K in it. It's a 2/1, craftsman type & we rented it for $925. We could have gotten a little more, but the tenant was a previous tenant of ours (from a duplex we have) that had moved back to the area & we know we have no worries with her. Perfect tenant - young schoolteacher. & that's what she could afford. We expect her to stay for a few years.

We have another one bought the same way that we haven't started on yet. Purchase price $50K - needs at least $20K but maybe more once we tear in - GREAT house. We expect to get $1100-1200 when finished.

So, it's still possible - but, I agree, not in a bigger urban area. I think the key is research, off market & being able to do a lot of the work yourself.
COSciAG
How long do you want to ignore this user?
Read Rich Dad, Poor Dad. Not necessarily a real estate book, but a mindset book that will be a huge inspiration. Also many Rich Dad books more specifically about real estate.

Find someone that's already doing what you want to do and see what you can do to provide value to them. Don't just approach asking to be mentored. Try to find deals for them or anything else that might need. Amount of knowledge you will gain along the way is worth more than they can/would pay you.

Good luck!
MAS444
How long do you want to ignore this user?
AG
Yeah I'm just most familiar with my local very urban market. Hell, I'm strongly considering buying the home next to me for basically lot value just to keep someone from building a huge house on top of us. I'd be doing very good to get .5% purchase price in rent. Probably a dumb move financially...but we should always be able to flip it to a builder/developer for profit later if we wanted to.
Diggity
How long do you want to ignore this user?
AG
those kind of deals only happen when land value is essentially zero.

in hot urban markets, land is so valuable that cash flowing is tough.
Tex_Ag_2017
How long do you want to ignore this user?
AG
2% is definitely achievable but you probably sacrifice some growth over time on the price of your property. Look at Chicago and Detroit. I dont invest there but it is fun to look at and research. Could get really great cash flow in those cities like that. They have a lower income bracket of people but a good many of them work in manufacturing and will continue to have jobs unless some of those companies go overseas but with Trump he seems to try and keep/get back American jobs.
Tex_Ag_2017
How long do you want to ignore this user?
AG
Schwack schwack, would you mind connecting and emailing about real estate investing? I really want to get into multifamily but I haven't found any good deals in my area but maybe I dont know what to look for. I've found great properties for single family that would do great on the BRRRR strategy but nothing for multi. My email is in my profile. Looking forward to hearing from you.
BMach
How long do you want to ignore this user?
AG
Bigger Pockets Podcast. Listen to it.
Hendrix
How long do you want to ignore this user?
AG
BMach said:

Bigger Pockets Podcast. Listen to it.
I'd agree with this. Tons of books on tactics/strategies. Start by buying what will be a rental and live in a couple of years. or buy a nice duplex and rent the other side. That's the easiest way to fall into real estate. Just leave rent houses behind you every couple of years and you'll find your way. Best way to learn is to do it and make a few mistakes along the way and learn. A good property manager is a hard thing to find.
scrap
How long do you want to ignore this user?
AG
For those new to investment real estate, BiggerPockets.com is the site for you to learn. I am a duplex junkie!!! My answer to most questions concerning where to start is buy a duplex. But the real answer is to understand your goal and your Why!

Your why will lead you to the type property you should buy. If you're looking to build equity in the short term to fund more deals later, you might be looking for properties that you can force appreciate and sell for a quick profit. Properties that you can flip for an easy profit after some rehab. If you're looking for cash flow you might realize that the properties with more than one unit will cash flow better than say a single family home SFH. You could consider yourself a buy and hold investor. Your ease of management may become a factor. For me a duplex was an easy compromise from a management perspective between a SFH and a 4 plex or small apartment complex. Many duplex investors go on to higher number of units per property once they get some experience. For me I am content with staying with duplexes.

My Why.......To generate predicable and sustainable income to fund a robust financially independent lifestyle which will exceed financial requirements throughout my life expectancy. My WHY led me to investing in duplexes which has done me very well. Other type properties could work as well, they all have their pros and cons. Cheers.
schwack schwack
How long do you want to ignore this user?
AG
Hi Scrap -

Sound advice.I agree with your strategy & our Why is the same - income. I wish there were more duplexes in my town - we have 2 and they are super stable, but there just aren't many & they almost never hit the market. We were kind of forced into the single family arena for that reason and that has paid off in our area where there aren't many nice houses for rent. We have all of our original tenants in those - no move-outs so far.

The pesky new "luxury" apartments have hurt our 1/1 4-plex units a bit, but they are full now. It's the first time we've had all dudes in there - I guess the girls like the granite, pool, etc. in the new place.
jagvocate
How long do you want to ignore this user?
AG
You think you're getting into real estate, but to find really good deals you're getting into marketing. Direct mail, pay per click, whatever. When you talk to a motivated seller you'll never question the 2% rule. I bought one yesterday where the seller brought $7k to close. Are they common? No. Do "gurus" account for the time and postage necessary to get such a deal? No. But they are worth it to me.

As far as straightforward investing advice, I'm a big fan John Schaub. There's a million folks standing in line to take your money, so beware. There's no easy button, but you can get some good systems and approaches from others. Bigger Pockets is a fine place if you can avoid shiny object syndrome.

Let's talk about how to ruin your endeavors before you get started:

1. Do something illegal and go to jail.
2. Do shady things and get a bad reputation.
3. Wholesale in a way that makes the TREC get on you for brokering without a license.

Avoid these and you'll be ahead of a lot of people.

As far as what to do, it all depends on your access to capital. I can say this: the long term goal is to do something Once and get paid many times. So once you can deploy your capital into long term cash-flowing real estate, you're on your way when you rinse, wash, and repeat. In the meantime just do smart deals and save some profits for these long term investments.

Refresh
Page 1 of 1
 
×
subscribe Verify your student status
See Subscription Benefits
Trial only available to users who have never subscribed or participated in a previous trial.