How much preparation and learning before buying my first property?

Philadelphia, Pennsylvania
Starting Out
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How much preparation and learning before buying my first property?

Peter Martinson
New to Real Estate · Greater Philadelphia · Member since 2023 · 19 posts · 10 votes

First, thank you for taking the time to read this.  The Bigger Pockets community is very impressive.

I read Kiyosaki's "Rich Dad Poor Dad" book over the past two weeks, and very much identified with his poor dad.  People may see Kiyosaki as a scammer or grifter, but he really put a fire under my butt.  So now I'm looking for ways to build up my currently empty asset column, and started reading Dorkin and Turner's "How to Invest in Real Estate", since I know nothing about the topic.  I'm open to other ways of making money, but Real Estate seems like a pretty good place to start.

My situation: I'm in my mid-40s, married with two kids.  We're barely break even with my and my wife's jobs, and some help from the family.  No retirement or savings to speak of, though I have started socking away some money at each paycheck before paying bills.  We have mortgage and student loan debt, as well as some consumer debt.  But, I am working to have the consumer debt paid off early next year.  I also don't think I know anyone currently involved with RE investing, except the agent who helped me find my current house.

The big question is, how much prep work/studying should I do before jumping in and trying to buy a house?  I don't want to keep preparing until I'm dead, but also don't want to suddenly find myself with an investment property that I don't know how to handle.  But a lot of advice I'm hearing is "Just buy something RIGHT NOW with creative financing!"

Thanks for your time!


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Ron Brady
Rental Property Investor · Burlington County, NJ · Member since 2019 · 540 posts · 771 votes
2y

My wife and I live in Burlington County, NJ. We started at age 51, in 2019.

We researched 1-2 months and started searching for properties. We made lots of rejected offers based on our single family home rental investment criteria. It took us 6 months of searching and offers to get an offer accepted.  

We recommend that you set your criteria and begin actively looking after a few months of research. The process of actively looking amounts to real learning time, we found. 

Best wishes to you. 

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  • Doug Smith
    Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes
    2y

    I was chatting with a friend in the industry this week at a Bigger Pockets meet up in Tampa. We both commented that most of the people that attend are studying and preparing, but most industry people that tell you that there is a big difference between thinking about it and taking action. I would be studying as much as financially preparing. Determine what you plan on doing...flipping? purchasing turn-key rentals? etc. How much down payment do you need? What will the closing costs be? How must cash in reserve must you have for the lender to be satisfied? Do you have a friend/mentor that you can turn to with questions? Do you have the right team...property manager, contractor, real estate agent, etc. to help? Take stock of where you are...point A... and where you want to be (point B). Then, create a map from Point A to Point B and set a hard time line to achieve it. Many desire to own real estate, but few take action. Don't let that happen to you to study forever and never pull the trigger. I don't think "buy right now" by going off half-cocked is a good idea. You need to truly be prepared, but creating a detailed plan with hard time lines will get you there. 

    2Reply
  • Jaron WallingPro Member
    Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
    2y

    @Peter Martinson It sounds like you're on track, learning, but lacking a strong network. My advice to you is to budget, discuss strategy with the wife, and meet like minded people. If she's not on board you'll run into all the speed bumps. If she doesn't understand most of the numbers, strategy, and reasoning behind effort what's the point? Does that mean she's remodeling a kitchen? No. It simply means she understands the value and ROI.

    My wife and I remodeled a property together. Before doing so I was sprinkling in knowledge about REI (I had experience with other properties). It was a great relationship building exercise. I encourage anyone starting out to do the same.

    1Reply
  • Peter Martinson
    OP
    New to Real Estate · Greater Philadelphia · Member since 2023 · 19 posts · 10 votes
    2y
    Quote from @Doug Smith:

    I was chatting with a friend in the industry this week at a Bigger Pockets meet up in Tampa. We both commented that most of the people that attend are studying and preparing, but most industry people that tell you that there is a big difference between thinking about it and taking action. I would be studying as much as financially preparing. Determine what you plan on doing...flipping? purchasing turn-key rentals? etc. How much down payment do you need? What will the closing costs be? How must cash in reserve must you have for the lender to be satisfied? Do you have a friend/mentor that you can turn to with questions? Do you have the right team...property manager, contractor, real estate agent, etc. to help? Take stock of where you are...point A... and where you want to be (point B). Then, create a map from Point A to Point B and set a hard time line to achieve it. Many desire to own real estate, but few take action. Don't let that happen to you to study forever and never pull the trigger. I don't think "buy right now" by going off half-cocked is a good idea. You need to truly be prepared, but creating a detailed plan with hard time lines will get you there. 


     Learn and prepare a detailed plan, with a HARD DEADLINE.  Thank you for this advice, Doug!

    0Reply
  • Peter Martinson
    OP
    New to Real Estate · Greater Philadelphia · Member since 2023 · 19 posts · 10 votes
    2y
    Quote from @Jaron Walling:

    @Peter Martinson It sounds like you're on track, learning, but lacking a strong network. My advice to you is to budget, discuss strategy with the wife, and meet like minded people. If she's not on board you'll run into all the speed bumps. If she doesn't understand most of the numbers, strategy, and reasoning behind effort what's the point? Does that mean she's remodeling a kitchen? No. It simply means she understands the value and ROI.

    My wife and I remodeled a property together. Before doing so I was sprinkling in knowledge about REI (I had experience with other properties). It was a great relationship building exercise. I encourage anyone starting out to do the same.


    Thank you for this advice, Jason.  I'll look for some locals that invest - I'm pretty sure there's an active community around Philly.  And I'll start filling in my wife.  She's not too excited hearing about Kiyosaki's pep talks ("more action, less talk!"), but will probably be a good sanity check once things start getting focused.

    1Reply
  • Ron Brady
    Rental Property Investor · Burlington County, NJ · Member since 2019 · 540 posts · 771 votes
    2y

    My wife and I live in Burlington County, NJ. We started at age 51, in 2019.

    We researched 1-2 months and started searching for properties. We made lots of rejected offers based on our single family home rental investment criteria. It took us 6 months of searching and offers to get an offer accepted.  

    We recommend that you set your criteria and begin actively looking after a few months of research. The process of actively looking amounts to real learning time, we found. 

    Best wishes to you. 

    3Reply
  • Jaron WallingPro Member
    Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
    2y

    @Ron Brady said it best. Once you're financially set and completed the necessary market research the real challenge begins. Finding property that fit your buy [box]. So many properties won't in today's market. Be patient and expect a long game.

    2Reply
  • Alecia LovelessPro Member
    Member since 2019 · 3k+ posts · 2k+ votes
    2y

    @Peter Martinson You make your money when you buy for the most part so once you have researched enough, likely a few months if you’re diligent, set a firm but realistic criteria for the property type you’re looking for and start looking and making offers.

    Be sure to make sure it will cash flow if it's a buy and hold or will have a high enough ARV to be able to refinance if it's a BRRRR or to be able to sell for a profit if it's a flip.

    However sometimes just breaking even or just making a small profit and having learned a lot is the best thing about your first deal.

    1Reply
  • Eric Gerakos
    Investor · Costa Mesa, CA · Member since 2016 · 1k+ posts · 1k+ votes
    2y

    Buying something “right now” just to be buying something is a terrible idea. Not every property is a good investment. Be patient and buy when the numbers make sense and you have a clear plan and adequate reserves.

    2Reply
  • Alan AsriantsBusiness Member
    Real Estate Agent · Philadelphia, PA · Member since 2019 · 1k+ posts · 1k+ votes
    2y
    Quote from @Peter Martinson:
    Quote from @Jaron Walling:

    @Peter Martinson It sounds like you're on track, learning, but lacking a strong network. My advice to you is to budget, discuss strategy with the wife, and meet like minded people. If she's not on board you'll run into all the speed bumps. If she doesn't understand most of the numbers, strategy, and reasoning behind effort what's the point? Does that mean she's remodeling a kitchen? No. It simply means she understands the value and ROI.

    My wife and I remodeled a property together. Before doing so I was sprinkling in knowledge about REI (I had experience with other properties). It was a great relationship building exercise. I encourage anyone starting out to do the same.


    Thank you for this advice, Jason.  I'll look for some locals that invest - I'm pretty sure there's an active community around Philly.  And I'll start filling in my wife.  She's not too excited hearing about Kiyosaki's pep talks ("more action, less talk!"), but will probably be a good sanity check once things start getting focused.

     Hey Peter! I am an agent and investor in the area and I host friendly investor happy hours with @Gaetano Ciambriello for people of all levels. I think it would be great for you to network and see what others are doing. 

    Reach out anytime and I'd be happy to share the details of the next event!

    [email protected]267-767-0111
    Alan Asriants - New Century Real Estate 590 Reviews
    View Page
    1Reply
  • Michael Haynes
    Member since 2019 · 54 posts · 9 votes
    2y

    Hello Peter Martinson in Philadelphia. This is what drives me crazy about BP and Newbie's thinking that they can Buy a Single Family Home and make Money. You can't! Especially, with a family and two working and owing DEBT. If, you have never owned a Home then you need to read the IRS rules for First Time Home Buyer. You can Buy your first Home and live in it for 2 out of 5 years to Sell for up to $250,000 Tax-free. What are you going to do? Rent your Residence and Buy an Investment nightmare with "Tenants?" That's putting the Cart ahead of the Horse = Smart people doing Stupid things. The easiest and safest way to start in Real Estate is to buy your first Home. Then, you find a fixer-upper house to Rent. When you Sell your Residence Tax-free, you move into your Rental and do it again. Now, you were impressed by Robert Kiyosaki and "Rich Dad, Poor Dad." Do you know he made it up? There never was a "Rich Dad." Robert's Method is to encourage you to go deeply into Debt by using "Other's Peoples Money" to invest in Real Estate. If you wanted to try to do that, the first lesson is to talk to your Banker and see if you can qualify for a Loan. The second step is to watch Grant Cardone's youtube video, "The Worst Investment You'll Ever Make." From what you described as your situation you need to start your study with David Ramsey! Google "David Ramsey's 7 Baby Steps." I had Rentals in S. Tampa, Florida for 30 years. I prepared to buy my Portfolio of Rentals to retire off of Oil Tankers for ten years. I traded Mutual Funds with some of the money off the ships and made $100,000. I sold my four Commercial lots in S. Tampa four years ago and paid all Cash for my Townhome in Valrico, outside of Tampa, to get away from the mess and crime. It took me a year to find the perfect property with Searches on Zillow etc. I bought just before the Covid and in one year my $175,000 went up in value to $320,000. But, I am experienced and studied and familiar with my State. I know how to use the computer to Search for my own Deals and Google Map to save me the time to drive over to inspect the neighborhood and outside conditions of the property etc. Do your know how to play Monopoly? Try to learn with that game and realize that Real Estate Investing is really a big game of Monopoly. You buy Single Family Houses. Sell them to Buy Duplexes, Triplexes or Quads. Then, you move up to Commercial Investing and do small or large Apartment buildings etc. It is a long and not so easy JOB if you are a single Investor. You need a Team. What's that? Can you support a Business with ten guys to work for you? How big do you want to get? I don't see this in your situation. Be very careful. The minute you say you have enough Down Payment Money to buy a house, you will have every Real Estate Agent on BP offering to help you spend your money. 

    2Reply
  • Troy Sheets
    Developer · Philadelphia, PA · Member since 2013 · 1k+ posts · 902 votes
    2y
    Quote from @Peter Martinson:

    First, thank you for taking the time to read this.  The Bigger Pockets community is very impressive.

    I read Kiyosaki's "Rich Dad Poor Dad" book over the past two weeks, and very much identified with his poor dad.  People may see Kiyosaki as a scammer or grifter, but he really put a fire under my butt.  So now I'm looking for ways to build up my currently empty asset column, and started reading Dorkin and Turner's "How to Invest in Real Estate", since I know nothing about the topic.  I'm open to other ways of making money, but Real Estate seems like a pretty good place to start.

    My situation: I'm in my mid-40s, married with two kids.  We're barely break even with my and my wife's jobs, and some help from the family.  No retirement or savings to speak of, though I have started socking away some money at each paycheck before paying bills.  We have mortgage and student loan debt, as well as some consumer debt.  But, I am working to have the consumer debt paid off early next year.  I also don't think I know anyone currently involved with RE investing, except the agent who helped me find my current house.

    The big question is, how much prep work/studying should I do before jumping in and trying to buy a house?  I don't want to keep preparing until I'm dead, but also don't want to suddenly find myself with an investment property that I don't know how to handle.  But a lot of advice I'm hearing is "Just buy something RIGHT NOW with creative financing!"

    Thanks for your time!



    I'm in Philadelphia, reach out any time. I read RDPD probably 20 years ago and it lit a fire for me as well, doesn't matter if it's 100% fiction, the mindset shift is what matters. My first home AND investment here was a quadplex I house hacked using an FHA loan with 3.5% down. If you can find something you can afford in an area you like I highly recommend house hacking a 2-4 unit MFH for your first investment using an FHA loan.

    1Reply
  • Peter Vekselman
    Real Estate Professional · Atlanta GA · Member since 2015 · 615 posts · 225 votes
    2y

    @Peter Martinson

    There is no easy answer for this question.  And many times it really depends on the situation.  

    Having said that my advice would be to connect with some successful local investors and see if you can get into helping them acquire deals.

    This is a HUGE skillset to develop.  And if you can learn from someone who knows what they are doing its a win win.  They win because they will make money on the deals you bring them.  You win because you wont have anything to risk, especially financially.  You also will probably make some commission money.  But most importantly you will learn the key component of being a successful real estate investor.  Once you learn how to find good deals, many doors will open up for you.  Including the ability to find them for yourself.

    Hope that helps...  

    1Reply
  • Peter Martinson
    OP
    New to Real Estate · Greater Philadelphia · Member since 2023 · 19 posts · 10 votes
    2y
    Quote from @Ron Brady:

    My wife and I live in Burlington County, NJ. We started at age 51, in 2019.

    We researched 1-2 months and started searching for properties. We made lots of rejected offers based on our single family home rental investment criteria. It took us 6 months of searching and offers to get an offer accepted.  

    We recommend that you set your criteria and begin actively looking after a few months of research. The process of actively looking amounts to real learning time, we found. 

    Best wishes to you. 


     Thanks for the perspective, Ron.  Good luck on your journey!

    1Reply
  • Peter Martinson
    OP
    New to Real Estate · Greater Philadelphia · Member since 2023 · 19 posts · 10 votes
    2y
    Quote from @Alecia Loveless:

    @Peter Martinson You make your money when you buy for the most part so once you have researched enough, likely a few months if you’re diligent, set a firm but realistic criteria for the property type you’re looking for and start looking and making offers.

    Be sure to make sure it will cash flow if it's a buy and hold or will have a high enough ARV to be able to refinance if it's a BRRRR or to be able to sell for a profit if it's a flip.

    However sometimes just breaking even or just making a small profit and having learned a lot is the best thing about your first deal.


     Thank you for the advice, Alecia.  I'm sure I'll figure this out with more studying, but how do you make money when you buy?  Doesn't Buying stick you with debt?

    I (IT guy) recently started a job in finance, and a lot of the profits still seem to me like someone pulled a fast one somewhere.

    0Reply
  • Peter Martinson
    OP
    New to Real Estate · Greater Philadelphia · Member since 2023 · 19 posts · 10 votes
    2y
    Quote from @Eric Gerakos:

    Buying something “right now” just to be buying something is a terrible idea. Not every property is a good investment. Be patient and buy when the numbers make sense and you have a clear plan and adequate reserves.


     Thank you for this advice, Eric.  Grounding like this makes me optimistic, while the "Buy Now!" stuff does the opposite.

    1Reply
  • Peter Martinson
    OP
    New to Real Estate · Greater Philadelphia · Member since 2023 · 19 posts · 10 votes
    2y
    Quote from @Alan Asriants:
    Quote from @Peter Martinson:
    Quote from @Jaron Walling:

    @Peter Martinson It sounds like you're on track, learning, but lacking a strong network. My advice to you is to budget, discuss strategy with the wife, and meet like minded people. If she's not on board you'll run into all the speed bumps. If she doesn't understand most of the numbers, strategy, and reasoning behind effort what's the point? Does that mean she's remodeling a kitchen? No. It simply means she understands the value and ROI.

    My wife and I remodeled a property together. Before doing so I was sprinkling in knowledge about REI (I had experience with other properties). It was a great relationship building exercise. I encourage anyone starting out to do the same.


    Thank you for this advice, Jason.  I'll look for some locals that invest - I'm pretty sure there's an active community around Philly.  And I'll start filling in my wife.  She's not too excited hearing about Kiyosaki's pep talks ("more action, less talk!"), but will probably be a good sanity check once things start getting focused.

     Hey Peter! I am an agent and investor in the area and I host friendly investor happy hours with @Gaetano Ciambriello for people of all levels. I think it would be great for you to network and see what others are doing. 

    Reach out anytime and I'd be happy to share the details of the next event!


     Hey, a local!  I am interested in your meet ups, and will message you privately to get the schedule and location.  Thanks, Alan.

    1Reply
  • Alecia LovelessPro Member
    Member since 2019 · 3k+ posts · 2k+ votes
    2y

    You make your money when you buy by always getting the best deal possible. If you know you can get 30% off market price, or that you have a value add property that will appreciate 50% in the first 6 months after renovation. Never get emotionally attached to a property, always rely on your numbers to make the deal work. 

    1Reply
  • Jorge VazquezBusiness Member
    Real Estate Broker · Tampa, FL · Member since 2017 · 1k+ posts · 684 votes
    2y

    First off, huge props to you for diving into the world of real estate and personal finance! Your drive is evident and commendable, especially after getting that spark from Kiyosaki's "Rich Dad Poor Dad." And kudos for seeking out knowledge from the Bigger Pockets community — a great resource!

    Your journey and challenges are shared by many, and it's great to see your determination. Let's address your situation and question step-by-step:

    Understanding Your Situation:

    1. Financial Position: Being in your mid-40s gives you time to make moves, but it's important to have a plan, especially if you're breaking even month-to-month. It’s great that you've started saving a bit every paycheck — that's a solid start.
    2. Debts: Prioritizing your consumer debt is wise. Once that's off your plate, you’ll breathe a bit easier and have more flexibility.
    3. Network: Even if you feel your immediate circle isn't into real estate, remember, networks grow. The agent who helped you could be a starting point.

    To Prep or To Jump:

    1. Education: While you don’t want to be in perpetual preparation mode, it's essential to have a solid foundation. Dive deeper into books, podcasts, and resources from trusted sources. Bigger Pockets itself has tons of resources and forums.
    2. Understand Your Market: Start getting familiar with your local real estate market. What are properties selling for? What do rents look like? This doesn't require money, just time and curiosity.
    3. Networking: Join local real estate meetups or groups (even virtual ones). Surrounding yourself with people who've been where you are can be super enlightening.
    4. Risk Management: It’s tempting to jump in, especially when you hear about "creative financing." While these strategies can work, they can also come with higher risks, especially if not executed correctly. Remember, every investment comes with risks, and it's crucial to understand them.

    Conclusion:

    It sounds cliché, but it's true: Real estate is as much about the property as it is about timing. The right time for someone else might not be the right time for you. As excited as you might be to jump into investing, it's essential to have a safety net and a plan, especially with a family depending on you.

    Given your current financial position and responsibilities, my suggestion would be to strike a balance. Continue to educate yourself, but also start taking small, actionable steps. Maybe that's saving a set amount each month toward a down payment, or perhaps it's attending one real estate networking event a month.

    Lastly, always remember: there's no one-size-fits-all answer in investing. Your journey is unique, and it's okay to move at a pace that feels right for you and your family.

    Wishing you all the success in your real estate endeavors! Stay curious and stay driven!

    Graystone Investment Group4.6271 Reviews
    WebsiteView Page
    0Reply
  • John MorganPro Member
    Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
    2y

    @Peter Martinson

    I started investing in RE when I was 44. I did zero research or due diligence before I got my first rental. It’s definitely not rocket science. Don’t overthink things.

    1Reply
  • Gustan Cho
    Lender · 17W662 Butterfield Road Suite 305 Oakbrook Terrace, Illinois 60181 · Member since 2023 · 19 posts · 6 votes
    2y

    I would partner with an experienced investor.  

    1Reply
  • Peter Martinson
    OP
    New to Real Estate · Greater Philadelphia · Member since 2023 · 19 posts · 10 votes
    2y
    Quote from @Ron Brady:

    My wife and I live in Burlington County, NJ. We started at age 51, in 2019.

    We researched 1-2 months and started searching for properties. We made lots of rejected offers based on our single family home rental investment criteria. It took us 6 months of searching and offers to get an offer accepted.  

    We recommend that you set your criteria and begin actively looking after a few months of research. The process of actively looking amounts to real learning time, we found. 

    Best wishes to you. 


    Thanks for your perspective Ron.  I wish you great success in your journey.

    1Reply
  • Peter Martinson
    OP
    New to Real Estate · Greater Philadelphia · Member since 2023 · 19 posts · 10 votes
    2y
    Quote from @Michael Haynes:

    Hello Peter Martinson in Philadelphia. This is what drives me crazy about BP and Newbie's thinking that they can Buy a Single Family Home and make Money. You can't! Especially, with a family and two working and owing DEBT. If, you have never owned a Home then you need to read the IRS rules for First Time Home Buyer. You can Buy your first Home and live in it for 2 out of 5 years to Sell for up to $250,000 Tax-free. What are you going to do? Rent your Residence and Buy an Investment nightmare with "Tenants?" That's putting the Cart ahead of the Horse = Smart people doing Stupid things. The easiest and safest way to start in Real Estate is to buy your first Home. Then, you find a fixer-upper house to Rent. When you Sell your Residence Tax-free, you move into your Rental and do it again. Now, you were impressed by Robert Kiyosaki and "Rich Dad, Poor Dad." Do you know he made it up? There never was a "Rich Dad." Robert's Method is to encourage you to go deeply into Debt by using "Other's Peoples Money" to invest in Real Estate. If you wanted to try to do that, the first lesson is to talk to your Banker and see if you can qualify for a Loan. The second step is to watch Grant Cardone's youtube video, "The Worst Investment You'll Ever Make." From what you described as your situation you need to start your study with David Ramsey! Google "David Ramsey's 7 Baby Steps." I had Rentals in S. Tampa, Florida for 30 years. I prepared to buy my Portfolio of Rentals to retire off of Oil Tankers for ten years. I traded Mutual Funds with some of the money off the ships and made $100,000. I sold my four Commercial lots in S. Tampa four years ago and paid all Cash for my Townhome in Valrico, outside of Tampa, to get away from the mess and crime. It took me a year to find the perfect property with Searches on Zillow etc. I bought just before the Covid and in one year my $175,000 went up in value to $320,000. But, I am experienced and studied and familiar with my State. I know how to use the computer to Search for my own Deals and Google Map to save me the time to drive over to inspect the neighborhood and outside conditions of the property etc. Do your know how to play Monopoly? Try to learn with that game and realize that Real Estate Investing is really a big game of Monopoly. You buy Single Family Houses. Sell them to Buy Duplexes, Triplexes or Quads. Then, you move up to Commercial Investing and do small or large Apartment buildings etc. It is a long and not so easy JOB if you are a single Investor. You need a Team. What's that? Can you support a Business with ten guys to work for you? How big do you want to get? I don't see this in your situation. Be very careful. The minute you say you have enough Down Payment Money to buy a house, you will have every Real Estate Agent on BP offering to help you spend your money. 


     Thank you for your perspective, Michael.

    0Reply
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