A newbie investor’s story

[Greg Gallucci]

I wanted to start this blog to help the guy just getting started. Being new to the Real Estate scene myself I figured it’s best to write this now while it’s all still fresh in my head. My goal here is to chronicle my journey and hopefully help answer some basic questions that us new guys have when getting started. If you are reading this I am assuming that you have determined real estate to be your path to success and have set your goals accordingly.

What to do:

There are many facets of RE which you can invest in. For the purpose of this blog we are going to focus on housing. I remember when starting out trying to determine where to focus my efforts. I’ve researched each of the below items in depth. Contrary to certain peoples beliefs there is no right or wrong answer. It’s a factor of your situation and what you would like to accomplish. There are a few main factors that might sway your decision one way or the other; time available, access to capital, your network, your objective and most importantly what you have a passion for. In order to be successful at any of these it requires a significant amount for work. There is no get rich quick in RE.

Using myself as an example, I work a full time job. My time is limited. However, continuing to work while building an investment portfolio has it benefits, you have access to people to build your network (potential investors), you have W-2 income which gives you access to capital through banks (loans). Since I have no plans to leave my job my options are limited to the type of real estate investing I can pursue.

Flipping and Wholesaling are very time and labor intensive. It’s also “quick” money. My goal is long term wealth accumulation/buy and hold. So for me that leaves two options, single family rentals or small multi-family rentals and commercial multi-family rentals. Smaller investments tend to be less scalable. I also happen to work in an environment with many affluent people and don’t plan on managing the day to day operations. This left me with Commercial Multi-Families. They allow me to invest in a scalable property where I can hire out the management (note: you can have single and small multi’s professionally managed). However, they do require large upfront cash out lay for the down payment which I hope to acquire through my network.

Types of investments:

1) Flipping

2) Wholesaling

3) Single Family and Multi-Family properties (4 units or less) - Rentals

4) Commercial Multi-Family (5 units and up) - Rentals

I found it helpful to sit down and write out everything on paper. On one side put your situation (How much time you have, access to capital etc.) on the other write out each investment and what it entails in order of magnitude. Example, if you don’t have a lot of time to commit and time is the highest order for wholesaling, then cross out wholesaling. If you can’t imagine yourself doing anything but wholesaling than something in your life must change which allows you to free up time. Once you have determined which type of investing best suits you it’s time to move on to the next step… education

I will have another post on educating yourself so that you are ready to move forward with your Real Estate investing. Please message me if you have any questions. Hope this helps.