What should be my first step in Sacramento?

Question

Fellow Sacramento, CA investors, I need your help. Those of you that started with nothing, no money, little knowledge but lots of motivation, what did you do first? How did you get your foot in the door? I am currently in the mode of reading Real Estate Investing books, like Rich Dad, Poor Dad and my next book is Millionaire Real Estate Investor and I am currently listening to all the podcasts from Bigger Pockets. I have interest in buy and hold and wholesaling. What exactly is wholesaling? In the most elementary terms possible. I would also like to mention that I do hold a full time job and cannot afford to leave it yet, I hope to have RE investing take over as my main money maker. With that being the case, do you all feel like wholesaling and/or buy and hold is the best bet for someone who cannot be on site full time?

David Hays · Answer

Hi Elliot Walker,Welcome to BP, and I´m glad to see that you´re starting to educate yourself. BP is indeed an absolutely fantastic resource, and you will be able learn so much about real estate if you just stick around and keep reading - while I enjoy the podcasts and listen to every one, I think you will find more actionable meat in the articles and forum posts that people share. I have to caution you though, and I´m relatively surprised that nobody has brought this up yet - many people in your position (the mindset of ¨having nothing to offer but hard work and diligence¨) come to the same conclusion that you do about wholesaling. While I´ve never wholesaled a deal, I have to say that (after hearing this same thought echoed many times in the podcasts), wholesaling is not a starting point for real estate. I understand that it can be difficult to pursue your real estate goals with a full-time job, but in order to be successful in wholesaling you will need to put out money for marketing, and learn a whole lot about negotiation, renovation costs, market analysis, and networking. It may pay larger dividends to find yourself an interested investor that needs an assistant and do their grunt work - not just anybody, someone who´s actually successful and doing deals, but still, it´ll give you a structure and framework around which to build your education and experience.

Account Closed · Answer

First, welcome to BP!I'm new to REI, too, but...first of all you should attend the Roseville REI meetup this October 6th! And you should continue doing what you're doing as well as asking questions on the forums.Wholesaling, as I understand, is getting properties under contract and then selling that contract to someone else. You're essentially hunting down and analyzing deals, tying up the property and selling the right to purchase that property. It seems to require a lot of advertising and hands on work, so it may not be ideal if you're a full time employee. Read this for a better idea as to what it's all about. Buy and hold is getting tougher in Sacramento (IMO). You may want to explore partnering with someone or investing out of state.

Elliott Walker · Answer

@David H,Thank you for that, I will check out that podcast. I do not think I have listened to that one yet. But, I agree, I think my best bet might be to find a partner that has some experience in wholesaling.

David Hays · Answer

@Elliott WalkerI´d like to follow up my last post with a bit of an addition - shortly after posting that, I listened to the BP Podcast episode 102, and I felt that the guy´s story might resonate a bit with you. To summarize: the guest is a wholesaler who found - when starting out - that he had some money for marketing, but was quite shy and didn´t have the time to dedicate to meeting with people. He partnered with another gentleman interested in getting started that brought those needed skills to the table, and so far they´ve built their business on that partnership. Might be an idea for you to consider!

Elliott Walker · Answer

Thank you everyone for your replies. As I read and learn more and more I do believe wholesaling is my best bet, since I have nothing to bring to table except hard work and diligence in hunting down the deals. I am going to continue reading and learning before I jump in. I am hoping to begin investing in the next few months. @ClaytonRehmus do they have those REI meet ups often in the area? Thank you everyone. Bigger Pockets is proving to be an outstanding resource.

Chris Vail · Answer

@Elliott Walker Welcome to the site, @Derek Jones hit the nail on the head with what wholesaling is up above. As a wholesaler you are deal hunting (you put in the leg work to find and lock up a deal) you then offer that deal to an investor that has the capital to actually close on the deal. You then collect a fee for your services, this fee will vary based on the type of deal you get under contract. Essentially the investor is paying you for the time you have put in to find the deal he is interested in. Keep reading keep learning.

Jorge Soto · Answer

Hello Elliott Walker. I am new to real estate investing because I know I still have a lot to learn. I got into buy and hold using my VA loan on a triplex in Sacramento. The benefits to a VA loan is no down payment. I only paid for home inspections and closing cost. I will be living in one unit and renting out the other two. After I move out I will be cash flowing. If you are not a veteran. A FHA loan can do the same thing, low down payment of 3%. I just started a wholesaling business in the Sacramento area. I look at wholesaling as a way to build capital, with little money. An use that money for down payments on buy and hold properties in the future. Derek Jones explanation is right on.

Derek Jones · Answer

Wholesaling is basically being a middle man. Find a seller and get into contract at x price, find a buyer who will pay y price. Close simultaneously. You profit the difference.Best way to start is to learn as much as you can. Talk to current investor, look at potential neighborhoods and figure out the numbers.