Do you have advice for a newbie?

Question

Hi! I've been studying real estate since 2020 off and on and I think I'm finally ready to actually do something. I've been reading books and listening to podcasts. My main concern is that I don't know what I don't know. Did you have a mentor when you first started? Or is it enough to just teach yourself and then go out and do it?

Account Closed · Answer

I think starting out it's really hard to know where to begin. Having someone help you focus and get a path going toward your goal is a big plus. Yu may not even clearly understand your goal and how to get thhere at this point.For instance, what I do isn't for everyone but if you don't know about it, how can you decide? There are many way to travel real estate.

I favor finding properties "Off Market" doing “Subject To” and selling on “Lease Option” for great cash flow and nice profits. Such as:

Buy using Subject To and sell on Lease Option which I explain at https://www.biggerpockets.com/forums/311/topics/1141313-subject-to-why-you-need-money-to-buy-using-subject-to-subto-safely-legally

Nicholas L. · Answer

@Tiffany J.

i'll be direct.

there is too much focus on mindset and not enough on money.

do you have funds to invest?  if you don't... save up funds to invest.

Becca F. · Answer

@Tiffany J.

My mentors were two investor friends, both who built up enough of a portfolio to quit/retire early from W2 jobs. I learned a lot about property management from them (I self manage one SFH) and local landlord-tenant laws.

If you can connect at local RE meetups with experienced investors, that would be another way to see what they're doing. I found it helpful to do a local renovation and walk throughs with a contractor - I knew nothing about construction before. You can also run some practice deals with rehab costs, monthly expenses, projected rent, etc. Sometimes you just have to take action instead of reading more books (I've read one book) but be cautious and always do your due diligence when considering making an offer .

As Nicholas commented, make sure you have the funds to invest. The social media gurus say "get started with no money, use other people's money." If someone is down to their last $20,000 or has an unstable job, that's a terrible idea to invest in real estate. If you're doing conventional loans, lenders love people with stable W2 jobs. I like to have 6 months of reserves for each property and another $10,000 for each property.

Alecia Loveless · Answer

@Tiffany J. Hi Tiffany I have owned bed and breakfasts for 25 years but technically got into real estate investing 26 years ago 1 year after I bought the first B&B. We bought two small commercial apartment buildings with a partner who eventually bought us out (my wife and I) after the friendship ended. Then we bought a few other SFHs but after the first 7 years we stopped investing and sold everything and I’m kicking myself now!

I got serious about investing again 4 years ago and while I don’t really have a mentor I’ve built a very good team. My contractor has been doing construction for about 38 years and has been doing some property management for local people off and on for about 25 years now so he’s been a big help.

I’d recommend networking at real estate meet ups if you can find any, even if you occasionally have to drive an hour or so to get to one it’s well worth it. Also find a good realtor or two depending on how big of an area you’re looking to invest in. Contact some banks and start getting on their radar and building a relationship with their lending department. If you find one that you feel is a good fit it might not hurt to open an account there if it’s local. I’ve been doing my loans with the bank I’ve been with for 27 years and they’ve been bending over backwards for my business.

Peter Vekselman · Answer

@Tiffany J.        big problem with real estate is that mistakes cost time and money.  and no one has unlimited of either.  and usually at the beginning we tend to have less of both.

it is difficult to know everything there is to know when you are a newbie.

so having someone by your side you trust and someone who knows what they are doing in my opinion is the best option.

one way to get this done is to connect with some successful investors in your area and see how you can help them in their businesses in return for some solid hand holding on your first few deals.

Kerry Noble Jr · Answer

Find a mentor and take massive amounts of action.

Yu Liu · Answer

Hey Tiffany, I was there with you and completely understand where you are coming from. I started studying real estate in 2019 and didnt pull the trigger until 2021.

What I can say is you learn so much from the experience of doing! You might change your strategies as you go through the motions of doing so my best advice is to just start.

How I started was I did a house hack on a duplex for my first property in a market where the properties were about $300K. This meant about $50K down payment. Not sure how much you're willing to spend or what your strategy is but I will say you probably know more than you think you know.

Go ahead and go through the process and hopefully you have some friends you can hit up and ask some questions when you're not sure. Happy to be that friend if you don't have any!

Best of luck!

Josh Young · Answer

@Tiffany J. I like buying a new primary residence and keeping the previous as a rental, this helps keep the down payment manageable (around 5% or less), it helps me better understand the condition of the property when I turn it into a rental (I fix/update some stuff while I live in the house and prepare for it to become a rental), and it helps make sure I always buy in a good area that my family will want to live which is good for appreciation.

It is important to learn as much as you can and a mentor can help answer questions you might have, these forums are also good for that, but the truth is I learned more by doing it than I could have ever learned from a book/podcast or mentor.

My suggestion would be, save to have more reserves than you think you might need and go for it, the extra cash savings will help offset a lot of the risk of not knowing what you don't know.

Here is what I did: https://www.biggerpockets.com/forums/61/topics/1096979-how-i...

Do you have advice for a newbie?

Most Popular Reply