If u had to start with nothing?

Question

If you had to start from nothing how would you go about beggining in real-estate rentals?

Ran Iarovich · Answer

I would say:

1) Get your dream team together. Mentor is most important (a community like this is perfect to find one), an agent that is knowledgable in the area, lenders, management companies, and a contractor if anything significant breaks.

2) I would start reading and absorbing as much knowledge as possible about real estate rentals in my area. This includes audio books, precepts, and reading as much as possible while putting it into action. In this step you'll understand which strategy works best for you. Out of month to month, short term, long term, out of state, etc. which makes the most sense for you based on your dreams and goals?

3) Get preapproved by a lender and see what you can afford. After getting your criteria, start comparing properties that are on market and off-market - your agent and lender will be your star players in this step!

4) After you find some properties that you are comfortable with, start analyzing them and seeing if the numbers make sense. Make sure that your mentor is giving you constant feedback based on what you think is a good or bad deal. There is never a point where you're asking too many questions!

***ALWAYS MAKE SURE THAT RENT FULFILLS DEBT SERVICE AND MORE! If you are starting out I would never make an offer on a property if you are not making cash flow on it. That is, cold hard cash after interest, taxes, and other expenses are paid for. Everyone will tell you that appreciation is important but in the beginning stages, you can't afford to have a massive overhead cost come out of the blue and ruin your entire plan.***

6) Repeat, Scale, and Teach others!

Hope this helps,

Mazal,

Ran

Joe Norman · Answer

Probably not a popular answer, but I would get a good paying W2 job and start saving. You'll need the cash for downpayment/closing costs/renovations, and you'll need the paystubs for financing.

G Pyros · Answer

Agreed. A W2 income is very powerful when it comes to loans.

Chris Seveney · Answer

@Christoper William Owen

That’s what most of us start with

So what I did was buy a primary residence. Then save a boatload of money to be able to afford a rental. Then rinse and repeat - not sexy, not exciting but over time - works really really well

Travis Biziorek · Answer

You aren't including enough information for anyone to properly answer this question.

What exactly is nothing? No job, no savings, debt? Do you have any marketable skills? What is your capacity to earn an income (minimum wage or six-figures)?

Is there a partner or spouse involved? Kids?

The actual situation/details here are going to guide the strategy.

If you make $150k, work in tech, have zero savings, and are renting in a HCOL area that's very different than someone that's homeless, has no marketable skills, etc.

Brayden Hrycko · Answer

Hello @Christoper William Owens,

I would recommend starting with one of the easier routes which would be to go FHA with 3.5% down into a 2-4 unit. It would be your quickest/lowest money down way of getting into a property.

As others mentioned, educate yourself by reading/listening to podcasts and get out into the community and meet realtors, lenders, investors, etc. They will play a big part in your success as well.

Good luck to you!!

Scott Mac · Answer

Spend zero dollars and earn as much as you can, as quickly as you can.

Keep those earning in a FDIC insured savings account (and eat the loss in value due to inflation) as they say K.I.S.S.

Work two jobs, one for at least 2 years (stable employment with health insurance), the other could be temp jobs, or a side job working overnight in a pool room in a decent neighborhood (or something like that).

Pay for sack lunches, homemade dinner and breakfast, car insurance, an inexpensive car with a good A/C and heat, holiday gifts for favorite relatives, and stay with parents for free (or a very small charge).

Parents hate you and say you can't live there, get a cheap room in a nice neighborhood with similar aged people.

Bankroll up your cash reserves as much as you can.

Read Rich Dad Poor Dad.

Keep at this until you have enough to buy (based on current market costs, and the lender requirements) and also have some cash reserves....at least 6 months of payments in reserve is better than 3 months, but that is up to you where you set this figure.

You also need good credit, and a DTI score acceptable to your intended lender.

After this (Buckling down/Boot Strapping) process, find the place you want.

Cash is King---

Good Luck!

Eliott Elias · Answer

I would do exactly what I did to get started. Cold Call as many people as possible and knock on as many doors as possible to find a property to wholesale.

If u had to start with nothing?

Most Popular Reply