How do I start

Question

I would like to start investing into real estate any ideas

Aristotle Kumpis · Answer

What are your goals? Are you looking for a job so you can make income now? If so, flipping or active investing would be ideal. Or are you looking to build long term wealth for retirement? If that's the case, long term, more passive investing would be better. Of course you could do both, depending what kind of capital you have.

Also, it's going to depend on your risk tolerance. Active investing is more riskier than passive in my opinion.

Jonathan Greene · Answer

When you ask a question like this as your first question, all it tells the community is that you haven't done any research on your own or tried anything for even a second. How can someone answer how to start when they know nothing about you?

What kind of capital do you have?What market do you live in?What interests you about investing in real estate?Do you have time to hustle in real estate on the side?What kind of income are you making?

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. Prioritize your financial stability. Eliminate debt, establish a budget, and save. Remember, the notion of amassing wealth without investing is a dangerous myth perpetuated by self-proclaimed experts. A prudent investor doesn't seek quick riches through shortcuts. To thrive in real estate investing, you must maintain a firm grip on your finances. Explore my personal favorites, Set For Life by Scott Trench or The Total Money Makeover by Dave Ramsey, for invaluable financial insights.

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. NETWORK!!! Get out of your comfort zone. Stop hanging out with your deadbeat buddies who spend all day drinking, talking sports, and otherwise wasting away. Go to BUILD YOUR TEAM at the top of the screen and look for local investors or meetups in your area. You can also find real estate investing groups through meetup.com, Facebook, or a Google search. Birds of a feather flock together!

5. Now, you need to figure out how to find deals and pay for them. Again, the BiggerPockets store has some books on this topic, or you can learn about it by watching podcasts, reading blogs, and interacting on the forum. A handy search bar in the upper right makes it easy to find previous discussions, blogs, podcasts, and other resources. BiggerPockets also has a calculator 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, recognizing a good deal will be much easier 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.6. Study the market. You can learn to do this independently or get a rockstar REALTOR to lead the way. I highly recommend a well-qualified REALTOR who works with investors and knows how to help you best.

7. Jump in! Far too many get stuck in the "paralysis by analysis" stage, thinking they just don't know enough to get started. You could read 100 books and still need to learn more because certain things must be learned through trial and error. You don't need to know everything to get started; you 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 forgiving; the average person can still make money even with some big mistakes.

Jason Wray · Answer

Nabby,

Best way to first get into real estate is to buy your first primary home since the down payment can be zero to 3% down.  If you already own your primary home then it comes down to how much equity you have in it to do a cash out refinance.  Take some cash out to use as a Down payment on a new investment property.

You can also transition your current home into a rental property and buy another primary again less down.  It usually makes more sense and is somewhat easier to buy a 2-4 unit first and then transition into another 2-4 unit or a bigger SFH.  It is very tough to go from a SFH single family to a 2-4 unit as it does not make much sense to the bank or underwriter.

If you do not own a home yet and you do not have a ton of cash you can always use a DPA - Down Payment Program.  There is usually one for each State/Couty and a few Government DPA's that will cover down payment and closing costs as well.  Downfall to some DPA's is they require you to own the home and not sell it or refinance anywhere from 2, 3 or 5 years depending on the state.

I have seen people use a DPA and after they purchased the home they did some renovations and the home increased significantly in value.  Allowing them to pay it off early and use the cash to buy another home.  If you ever have any questions or want to talk about the steps or details feel free to reach out always happy to belp a Bigger Pockets member!

How do I start

Most Popular Reply