Beginner - what helped you start?

Question

Hello All,

I recently heard of BiggerPockets reading a book. My Wife and I currently own one single family property that we have rented out for a few years.

I really started taking my learning in real estate investing about 6 months ago. Our first property just sort of happened. We lived in it, I was offered a role in a different state with my company and we chose to keep the home and rent it out.

The goal long term is to create a net cash flow that matches my primary take home while also owning long term as part of our retirement.

I don't really have anyone within my friends or family who invest in real estate so I've taken the learning on myself.

Short-term, my goal is to learn as much as I can and add to our real estate portfolio by year's end. I'm interested in multi-family, preferably a duplex or triplex. The area I live in is not ideal due to cost, so I have been checking out other areas of the country to see what is out there.

My primary question is, how did you get started? What was your situation like? We have expendable income, but not a ton of liquid capital to put down. We have no debt besides our primary residence and one rental property, although we have two kids in multiple sports 🤣.

Looking forward to hearing your story and possible suggestions.

Respectfully,

Christian

Michael Paling · Answer

I'm under contract for my first property, so you're a little ahead of me, but I'll be house hacking this property. It's a duplex, so I'll have half rented out and the unit I'll be living in is a 3 bed and 1.5 bath, which is way more space than I need, so I'm considering getting a roommate too. With this method, I could have put down 5% since it's owner occupied, but I decided to put down 20% so I didn't have to pay PMI and it cashflows better. The current owner has been selling many of their rentals in this area and I'm going to bet they'll be selling more, so I might pick up additional ones in the future.

Nathan Gesner · Answer

Welcome to BP!

The first thing you should do is try to find a local investor group to start networking with like-minded people. You can learn a lot at meetings and networking, plus you may even stumble across some deals. Go to NETWORK at the top of your screen and you can search for other investors and investment groups in your area. You can also check meetup.com or search facebook for real estate investment groups, clubs, or meetings in your area.

Next, you need to educate yourself. You stumbled onto a rental and it's working well, but that's not the norm. Educating yourself and being deliberate will increase your likelihood of success and accelerate building wealth. Start by reading books and listening to podcasts. It will motivate you and lay a firm foundation of how to invest in real estate. Watch the YouTube videos from BiggerPockets to learn how to evaluate a property for cash flow and practice! After doing 15 - 20 of them, you'll be ready to go shopping.

Here's some generic advice I share with beginners. Maybe some of it will be useful:

1. Start with BiggerPockets Ultimate Beginners Guide (free). It will familiarize you with the basic terminology and benefits. Then you can read a more in-depth book like The Book On Rental Property Investing by Brandon Turneror The Unofficial Guide to Real Estate Investing by Spencer Strauss.

2. Get your finances in order. Get rid of debt, build a budget, and save. The idea that you can build wealth without putting any money into it is a recipe for disaster and the sales pitch of gurus trying to steal your money. A wise investor will not try to get rich quick with shortcuts. If you can't keep control of your personal finances, you are highly unlikely to succeed in real estate investing. Check out my personal favorite, Set For Life by Scott Trench , or The Total Money Makeover by Dave Ramsey.

3. As you read these books, watch the biggerpockets podcasts. This will help clarify and reinforce what you are reading. You can hear real-world examples of how others have built their investment portfolio and (hopefully) learn to avoid their mistakes.

4. Now you need to figure out how to find deals and pay for them. Again, the BiggerPockets store has some books for this or you can learn by watching podcasts, reading blogs, and interacting on the forum. There is a handy search bar in the upper right that makes it easy to find previous discussions, blogs, podcasts, and other resources. Biggerpockets also has a calculator you can use to analyze deals and I highly recommend you start this as soon as possible, even if you are not ready to buy. If you consistently analyze properties, it will be much easier to recognize a good deal when it shows up. Find Brandon's videos on YouTube for the "four square" method of analyzing homes and practice. It doesn't take long to learn how to spot a good deal.

5. Study the market. You can learn to do this on your own or get a rockstar REALTOR to lead the way. I highly recommend a well-qualified REALTOR that works with investors and knows how to best help you.

6. Jump in! Far too many get stuck in the "paralysis by analysis" stage, thinking they just don't know enough to get started. The truth is, you could read 100 books and still not know enough because certain things need to be learned through trial-and-error. You don't need to know everything to get started; you just need a foundation to build on and the rest will come through experience and then refining your education.

You can build a basic understanding of investing in 3-6 months. How long it takes to be financially ready is different for everyone. Once you're ready, create a goal (e.g. "I will buy at least one single-family home, duplex, triplex, or fourplex before the end of 2019") and then do it. Real estate investing is a pretty forgiving world and the average person can still make money even with some pretty big mistakes.

Zierry Eme Carl T. Tagbas · Answer

Welcome to BP, Christian! You have come to the right place for sure! Multi family is such a boom here in Spokane. To answer you questions... About 12 months ago, I purchased my first multifamily property (duplex) and doing some house hacking. I am living in one side while renting out the other side, the downside since I used FHA - I have live in it for a year so I am not cash flowing but once I leave the unit... I will be cash flowing with nice amount. I am planning of doing the BRRRR method down the road.

If you have any questions, please feel free to connect with me and I'd be happy answer your questions

Ty Ash · Answer

Hi @Christian Saastad!

Just like others here in the thread, I also got my start with house hacking, specifically in a duplex. Then my girlfriend and I did the same but with a single family where we were going to wall off a portion an AirBNB (but COVID). We stayed there for about a year then rented it out long terms and now are in our first live in flip that really just needs an updated kitchen and flooring. We'll likely stay here for a few years and then either sell if the market maintains its momentum or rent it out as the numbers work for that as well.

There are so many options to invest in real estate outside of just the traditional buy and hold. Using you owner occupancy abilities is one of the best ways to keep on growing your net worth and equity that you will be able to tap into in the future. Otherwise, keep listening to the podcast, focus on building your relationships in the market you'd like to invest in, and take daily action to move towards your next deal.

Best of luck!

Bradley Dosch · Answer

Hey Christian, I got started somewhat similarly to you. Just bought a house to live in, rented the rooms out, moved out and kept it as a rental and have been repeating ever since. I think this is a super accessible way of investing in real estate for many people!

Joshua Janus · Answer

Welcome to BP! There are plenty of investor friendly realtors and investors here that you can connect with. There should be local meetups available in your area as well. Read through the old forum posts here as there is plenty of value and wisdom in the old posts!

Beginner - what helped you start?

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