Where should I begin?

Question

I am completely new to the real estate game. I have a good amount of liquid in the bank and am looking to invest in rental properties. I am located in Miami, FL. What kind of properties should I be looking for? What price range yields the highest returns? How much money should I be putting down? Is there any value in buying a property in cash? What interest rate should I be looking for if getting a loan? Should I always be refinancing after the first year? What percentage of my portfolio should be in real estate? Is there a lot of risk investing in properties now (high prices + potential recession)? I would greatly appreciate any sort of information. Thank you.

Zach White · Answer

Hi Nick,

Welcome to Bigger Pockets. I'm fairly new too; I began researching all those topics about a year ago. When I started I had a lot of questions that I just wanted straight answers to but it doesn't seem to work that way. Different things work for different people and real estate markets vary greatly so you'll probably need to just start exploring and narrow your focus as you gain understanding. BP podcasts are a great place to start. Every week they interview successful real estate investors involved in many types of investing and they share tips, tricks, and stories. I work at a job where I can wear headphones so I listen to those all the time. Many of the books on this site are also available on audible so you can learn in the car or wherever you can or I guess you could just read them. Good luck!

John Fortes · Answer

Welcome to the community Nick! Glad your here. Below are some steps you can take. You'll learn more by doing or investing passively in other bigger deals. Please feel free to reach out.

1. Educate yourself! This is going to be what you do for the rest of your life as you constantly tweak and insert what you learned into action.

2. Analyze as many deals as possible. Keep reviewing and learning how to spot a good deal from a bad deal.

3. Connect with like minded people.

4. Talk about real estate! Be vocal and intentional with your conversations. You never know who is interested and needs help. Since you have educated yourself and analyzed deals, great chance to partner with a money partner on that front.

5. Raise money for your own deals.

6. Find deals for others. Also known as bird dogging.

7. Invest in someone else's deal or syndication. Learn from the process and get involved someway, somehow. This allows you to earn while you learn by investing passively in their deal.

8. Find a mentor and volunteer to help them for free. Add value to someone else for free education and building a friendship/relationship.

9. Write a blog, start a podcast, start a YouTube channel, or do all 3.

10. Be active on your social media platforms and create your own brand.

These are not step by step processes. Just guidelines to help you get to your end goal. 1, 2, and 3 are crucial but everything else tackle it in your own way and process. Just do it. Hope this helps, good luck, and God bless!

Christian Becker · Answer

Read about 1000 posts on this forum to start. On all the topics you have mentioned. It will inform and you'll start to see what direction you want to go. I've spent a few months on here and reading a few books. The benefit of a book is that it gets you some organized thoughts and ideas. Then you can take that and be a bit more focused. Another good way is to start with the posted podcasts. Pick 3-4 that interest you. Take notes as you go through them. It will raise a lot of additional questions. Start asking more on BP and read a lot on here.

You're asking a lot of big picture advice questions. You'll get your answers by spending some time researching. No one can easily answer them for you. I like SFR and small MF for now. Some people love 100+ unit apartments.

Read Beginner’s Guide: http://www.biggerpockets.com/real-estate-investing

Check out BP Podcasts: https://www.biggerpockets.com/podcast

Caleb Heimsoth · Answer

@Nick Augustino It depends on what you are wanting to do, but I would probably recommend a combination of multifamily as a active investor (own the property yourself) and passive investor.  If you are getting a commercial loan right now, it will probably be around 6 percent interest.  You will be required to put down at least 25 percent, I recommend more like 30 percent down, but that will vary on the investor.

You only want to refinance after a year if you have added value (through increasing rents or renovating).

Also, on bigger pockets, if you type the "@" sign you can tag people, that you are connections with.  So if you have other questions, just feel free to tag me, and I can answer if I can help.

Mike Krieg · Answer

@Nick Augustino Listen to a ton of those BP podcasts too. Great for working out, driving, or walking the dog.

Oleg Shalumov · Answer

@Nick Augustino

First of all WELCOME!

There are several ways to answer your question as it depends on which type of investment you are interested in.

There are flipping houses, lending money to flippers as HML (Hard Money Lender),  investing in residential properties (1-4 family houses) , buying notes, investing in crowdfunding or joining a syndication - each one has it's advantages to challenges.

Read up on them (plenty of the information here at Bigger Pockets) and see which one if more suited for you.

Malgorzata Sadowska · Answer

Great feedback above! AND, I would also consider adding short term rental properties to your portfolio. Lots of rules to be mindful of so everything will depend on where exactly you want to invest.

Nick Augustino · Answer

Thank you. I appreciate the response.

Yesenia Gonzalez · Answer

Hi Christian,

This was excellent advice that I too will take for myself who is a novice. Thank you.

Best,

Yesenia

Brooklyn, NY

Nick Augustino · Answer

Thank you guys for responding.

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