where to start?

[Armando B.]

Hi, im a 38 yo man who lives in the nw area of houston tx. I have been interested in realestate investing for a while but have no much experience n 20 k to start. I have a debt of 13k and earn 40k yaerly. im not sure if i should just buy a house using an FHA loan n rent the curent house i live in? I noticed a lack of inventory in the har.com site n not sure if i should wait for a better time? I was told this is not a buyers market. Also what areas are considerd up & coming and good for investment? Thanks!

[Michael Ran]

First... Welcome! I wish I had found biggerpockets before I started.

Now to your question:

Waiting for a better time is for short term investors. Are you going long term or just playing short term? Short term, buy around the plants like La Port, Baytown, Pasadena, etc. Long term- heights, med center, mid-town, Exxon, Grandparkway, there are tons of places.

I believe you can buy as many as 4 properties with conventional loans(cheap down payments).

The first step is go to your local bank(or 2 banks) and ask them to pre-approve you(ask for a pre-approval letter). They will ask for a lot of information. Tell them what you want to do. Find out what they will do and if you can even qualify for a second home loan. Find out how much you can get loaned to you. That's your max to start(don't buy a 400k house! At hard money rates!)

Next, you are only working with 20k or can you put in more for rehab(repairs/sweat equity/DIY)? If you don't have the time or extra money, you need to find turnkeys. You can look for wholesales but a lot of them are fixer uppers which need updates and repairs(cash heavy deals). There are tons of websites other then HAR. There can be more info on this once I look into it if you want me too.

*key point* You only make money in RE when you buy! So try to get a low price. 

Areas are personal opinion based for the most part. You can make money anywhere if you know what you are looking for. 

Best thing anyone told me on this subject starting out was: "Buy what you know!"

So I say buy in your area. You know what areas are not safe and what are, around you.

There are a many steps in the middle and much more research before you start but this should help get you started in the right direction. It is late and my mind has shutdown for the night but I can help if you want.

@Waylon Themer  is a banker. I don't think he does the loans you will need but can help through the bank stuff and knows much more then I do on creative financing.

Also, check out Lifestylesunlimited.com they can walk you through the process for a fee or just search the forums here for the steps and read the free books.