Where to start/any advice helps

Question

Hello everyone, I’m a 21 year old from the Northern California area. Just getting started out in real estate and trying to get myself pointed in the right direction. Investing and real estate has always been a goal of mine, so I’m reaching out in hopes of a little advice.

I’ve grown up around construction as my father and uncle both own company’s. With that I feel like my strong suit would be flipping houses, again just not sure if that’s the right place to start. I’ve been working and saving for a good down payment on a house or buy cash, just hesitant to do so.

What do you recommend would be a good first step? Thank you!!

Alex Breshears · Answer

I'm going to be a bit different here and saying the place to start is asking yourself questions. You say you always wanted to invest in real estate, and I agree that is a wonderful thing, but what is it you want from investing? Are you looking for passive income? Want to build a large sum of money to buy another business or even your father's business? Real estate is a vehicle to your own goals, not THE goal. There are a ton of ways to invest in real estate, much more than flipping houses and being a landlord. Like TONS more. So here are some examples of what I would really spend some time with pen to paper and think about.1. What is my personal goal? How will I know when I have achieved it?2. What do you want your life to look like while investing? (Various methods require different amounts of time on your part in order to continue moving forward, flipping houses falls into one of the most time intensive options). Do you want time freedom? Geographical freedom?3. Who else would you want on this journey with you? No man (or woman) is an island. Figuring out who you need with you to accomplish the goal can help you be on the lookout for when those opportunities arise.4. What's your timeline to get to the goal? Real estate is not a sprint, it's a marathon! How quickly you want to get to a goal or need to get to a goal will eliminate some options and bring others to the forefront.5. How do you see your life once you have hit your goal? Yes, owning 20 single family homes as rentals sounds great in podcast titles, but I know plenty of landlords that are just tired. They worked for years to build and buy rentals, only to find out they spend a larger portion of their time fixing issues or doing book keeping, or the sundry number of things involved with owning rentals. Yes you can hire property managers, but you often still have to manage the manager, plus keep the books for tax time, plus have capital reserves for surprise repairs or unit turn overs. It's a lot to manage. So knowing what your expectations are after you have hit your goal can also help eliminate some options. Think of the long term plan first, and then work backwards! Good luck!

Nathan Gesner · Answer

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 Turner or 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 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.

Ricardo Hidalgo · Answer

I think flipping homes would be a great start especially if your family has a background and the connections to properly do the homes. Flipping homes is the quickest way to growing your capital in the short term if you know how to calculate your margin!

Aj Parikh · Answer

Hi Blake, One of the easiest strategies to get started in today's market would be to invest in turnkey properties in a midwest state and stay passive in your journey. Feel free to reach out if you want to discuss.

Drew Sygit · Answer

what are your long term goals?Flipping is just another job. Investing in rentals or syndications generates more passive-type income.

Ty Ash · Answer

Hi @Blake Johnson!I'd recommend that you keep/start learning! Podcasts, Books, and Mentors you find by networking. I'd pick up a copy of Set for Life by Scott Trench as it has a good framework for financial independence, especially for a newer investor. Real Estate is just a part of your total financial picture so don't become too focused on just real estate. You'll want to learn more ways to increase your income now and in the future, keep your expenses low, and take the difference to invest into assets, real estate/business. It hasn't been mentioned yet but a house hack will probably be one of the best strategies for you to get started and take action while giving you a great return because of the low % down needed to get started. Once you get to this point, make sure to run your numbers for both while living in the house hack (lowering your living expense to less than what it would be to rent in your area) and post move out where you need to be at least break even after accounting for your monthly payment + maintenance, capex, vacancy, property management. Here's a great resource right here on BP: https://www.biggerpockets.com/real-estate-investing/house-hacking-strategy This gives you a great foundation to take more risk from in the future wether it be Flips or BRRRR's. Best of luck getting started! Here for you with any questions you have along the way!

Eliott Elias · Answer

Talk to as many realtors, investors, brokers, wholesalers as possible. Youtube videos won't give you a good grasp on your market, connecting with others will

Paul De Luca · Answer

@Blake JohnsonRead The Book on Flipping Houses by J Scott to see if flipping makes sense for you. I think you should also read the other BP books to explore other strategies before deciding which direction to go.