DEAL ANALYZING 1ST HOUSE HACK

[Azaleia Sinclair]

Hello my BP friends,

About 6 months back my interest in starting my real estate journey had peaked and I could not stop thinking about it, so I decided to jump in. At start, my credit and debit were the problems, and I have diligently worked on getting my credit score corrected and now have about 6k saved up. I am aiming to have my first property by mid-year (May-July) hopefully. I wanted to add that my first hack will be a multifamily property, in the Ft Lauderdale/Miami area using my VA loan. I am aiming for 3+ units but I will take 2 if the deal is good.

You guys have helped me tremendously in my short time and I have hit another roadblock and I wanted to ask for advice. It may seem silly of me to ask this, but I am a novice and I love to learn from other people before making my own decisions.

How do you analyze and find deals? What numbers do you look at to make the determination point that you have a good deal? What are the considering factors? I know it may be a lot to explain so if you have any book suggestions, online readings or podcast that can explain in simple terms I would love to hear those as well. Hope to hear from you guys soon!

Thank you BP Fam!

[Nathan Gesner]

Quote from @Azaleia Sinclair:

I recommend you start by reading some books. They give a better foundational understanding of the entire picture and can be referenced easily. Then listen to podcasts or interact on the forum to refine your education of specific topics.

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 (my favorite, but you may have to buy it used).

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.