New to REI! Excited! But nothing to get started. Advice?

Question

My husband and I live in Chatsworth, CA and recently learned about real estate investing just 2 months ago. We are committed to learning everything to be able to achieve financial freedom ASAP! We both currently work full time, with great incomes. Unfortunately, we don’t believe we are financially ready yet (but I hope we’re wrong). Before reading Rich Dad Poor Dad, and Set for Life, we had NO idea the financial hole we were digging for ourselves just enjoying life’s pleasures. We both have school loans, and car payments that are weighing on us even with our income. And virtually no savings. In order to start investing, is our only option to wait another year and save? Should I wait until we have 20% for a down payment? And THEN start? Our goal is to invest in rental properties to create passive income to fulfill our “why”, which is for us to be able to travel the world and spend more time with each other and our families. Would someone be able to give me some first steps I should take given our situation in order to be able to get started on our investment journey? Would really appreciate some suggestions! Thank you!

Walter Roby jr · Answer

House hacking in our market is my favorite way to get your investing off the ground. Then you start to get your toes wet with mailbox money and managing others.

Peter Vekselman · Answer

I would definitely not wait. Every day you wait from taking action is another day you will further be going into the whole.There are other options in real estate other then just putting down 20%. For instance you can wholesale deals without really having any money at risk. This strategy will allow you to build up capital.You can also partner with other investors. Another thing I will tell you is I would connect with a big investor in your area and see how you can help them. This is one of the best way to learn.So do not wait, figure out a technique that will allow you to get into the game immediately.

CJ Berina · Answer

@Miles Abrenica Hey Miles, Welcome to BP! You're just down the street! I'm out in Northridge. The 20% is not your only option. There is an FHA loan where you can move into a house for only 3.5% down. Then you can "House Hack" that and rent out the other rooms to people. There's also a book in the BP store, called "Investing with No and Low Money Down." I'm currently working on my first deal through other financial partners that will be funding the deals. I'd really try to follow the steps in Set for Life. Try to get a mentor. Learn from as many people as possible. Listen to the Bigger Pockets Podcast, as many of them as possible. And lastly, we host a Bigger Pockets Meetup here in the Valley. We just had one tonight. We host them every Third Thursdays at my store, Collective Lifestyle, 8906 Reseda Blvd., Northridge, CA 91324. 6:30-8:30pm. It's potluck style so you can bring food, drinks, or chip in. There's lots of great networking and information going on in there. So yea, you should definitely try to make it if you can. I'll send you a colleague request. Good luck!

CJ Berina · Answer

@Miles Abrenica sounds great! Can't wait to have you there! Where did you have dinner? HahaI'm still working on my first deal. But yea working on SoCal. It could be beneficial if you're already paying rent or going to have to pay rent, because it would lower your rental cost, that or build equity so you can pull that out later and get another property, and once you move out you make even more money. So it is possible, just depends how you make it happen.

Thomas S. · Answer

Step one in your path to successful investing is to eliminate your student loans and car payments. Investing is not a path to getting out of debt. You first eliminate your debt then concentrate on saving and investing to grow wealth.As long as you have debt you lack the discipline required to be successful at money management and investing.Start the process by clearing your debt.

Seth Wasylyszyn · Answer

@Miles AbrenicaHey there, Miles! I'm new to real estate as well, so I'm not claiming to be an expert, but being new as well I wanted to share what has helped me move forward.In all honesty, READING has taught me a lot. Robert Kiyosaki, Ken McKelroy, and Garrett Sutton, all members of the Rich Dad Company, write incredible books on real estate. Brandon Turner wrote "How to Invest in Real Estate with No and Low Money Down", which gives you multiple methods of financing real estate, especially for people that don't have much money saved or have little income.Reading dozens of books has helped, but what also helped was when I went out and started meeting team members in my area.I would highly suggest just to SET UP MEETINGS with potential team members. Talk with a few property management companies in your area, a couple realtors, and even mortgage brokers/lenders. The books were awesome, but I learned so much more and got my momentum up and running by just meeting with a few of these professionals. Because of that I'm confident in investing in the Bakersfield market, which is very far from where I live, so long as I can establish a great team.I know you'll do well, but I would highly encourage you to read as much as you can and never be afraid to just go out and meet some professionals and ask them questions. They're always happy to help because that's how they drive business. They know you'll seek them out if you're happy with the service they provide. Good luck! Stay awesome!

Allen Scott · Answer

Hi. Yes, find a local RE group and get a Mentor (someone who has several years of experience doing deals and you can call at a moments notice with questions). I see in your replies that CJ offered you an invite to a BP Meetup - great.I joined a local RE group called Renatus here. Full disclosure, while you will get a lot of free advice from people, ongoing education will cost you. Be prepared to pay for additional information. Pretty much, all education groups will teach you the exact same thing - how to make money in RE - its just the delivery that changes from group to group.

Miles Abrenica · Answer

Hi Peter, thanks so much for all the advice! I understand the basics of wholesaling, I'm doing some research on the process here in CA. I definitely will be exploring that as an option. Do you have any tips on what methods have worked best for you, as far as finding deals? I imagine finding an investor to fund a deal would be difficult, and honestly a bit intimidating as I am brand new to the game. I am planning on attaining my RE License, and get familiar with the system. Do you recommend this step?

Miles Abrenica · Answer

@CJ Berina Thank you for your reply! We will definitely pop on by for your next meetup. We just had dinner on Reseda last night! Is your first deal here in SoCal? I was told house hacking wouldn't be really beneficial in our area due to how expensive properties are now.