What should my first investment be?

Question

What should my first investment be with a little bit of money or not money?

I have been reading books, including Rich Dad Pour Dad, I have been listening to the BiggerPockets podcast, I have been doing other resourcing, I want to move forward in real state investing.

I own a Painting company, And I am convinced that Realsatate investment is the way that I want to go.

Any and all advice are appreciated!

Best.

Anthony Gayden · Answer

It will generally be easier to get financing for single family homes. That is part of the reason why I focus on 1-4 unit properties. Starting with nothing I was able to easily acquire them and get started investing.

Victor Hugo Juarez · Answer

@Jonathan Bombaci

@Jonathan you are blowing my mind!

Looks like I never made the simple questions that can be the best questions of my life!

Now my head is having more and more questions and Ideas!

Thank you so much Jonathan!

Really appreciate it!

I have been listening to the BiggerPockets show every day for the most part of the day or the most that I can possibly can.

Jonathan Bombaci · Answer

If you target houses that really only need paint, a lot of paint, and you’re able to get a loan from a bank or help finance it, then why not? Instead of making 2-3% commission one time your offering a way to turn it into monthly income. Then when you sell it they get the listing and 2-3% of what is hopefully an appreciated value.

You just have to make it easy for them and plan to do the property management yourself. That being said the agent will probably handle getting tenants and be able to connect you with any contractors you may need to get work done quickly at good prices.

Victor Hugo Juarez · Answer

@Jonathan Bombaci

Would a real state agent be willing to work with someone or partner some how with a person (in my case a Painting Company owner) that doesn’t know too much or almost nothing about investing in real state?

Why would they be whiling to?

What benefits could they possibly get from it?

For example if I have a liquidity of 10k to 40k would that be my investment or should I just go to a lender? And use their money instead of risking mine in a business that I have not any experience with?

Jonathan Bombaci · Answer

You know a lot of real estate agents that’s awesome. Yeah pick one or 2 that you have a good relationship with that you know can hustle and see if they invest already, or want to invest. They find can the layups, you do the painting/clean up, they market and sell it. If it’s a great deal you’ll find the money to finance it or maybe get the sellers to finance or float the mortgage for a few months.

Partnering is a great way to fill in knowledge gaps and partnering with an agent might be just the thing you need.

Goodluck! It’s a fun ride.

Victor Hugo Juarez · Answer

@Jonathan Bombaci

Thank you @Jonathan Bombaci your advice and knowledge is veré valuable, you just told me what could be the best way to start, now, since my knowledge in real state still limited, it would be a good idea on partner with a real state or broker or just bring someone to help me with the process when I believe that I found a potential good deal?

Many of my customers are real state agents and or brokers, but I have never mentioned to any of them my intentions on becoming a real state investor, I always believed that to start investing in Realsatate people needed already to have a lot of money.

You’re advice was literally a mind blowing! Thank you so much!

Victor Hugo Juarez · Answer

@Charles Carillo

Thank you @Charles Carillo your advice is very valuable and appreciate it.

I believe, I would start small, assuming that in the pat of learning, I will make some mistakes, hopping to make small ones, then from there of course, I would keep growing, and I don’t see why don’t just keep growing.

But yes, Rental properties is what I visualize my self and my family investing in.

Victor Hugo Juarez · Answer

@Anthony Gayden

Thank you Antony for Your advice, I will keep doing search about multi family properties.

What does a lender consider or will look on to? I imagine that it would be harder to get a loan for multifamily properties than for si for homes?

I really appreciate your time and valuable advice, Thank you Antony!

Jonathan Bombaci · Answer

I'd say you already have your first investment, your painting company. How did you start that? how much money did you have to invest to get it started? I'm willing to bet you didn't have $1M or even $100k when you got your painting company off the ground. You can use money to start a company or you can use time and grit. The same is true in real estate.

As a professional painter you have a competitive advantage, so use that. How often do you get into peoples homes to paint things when they're getting ready to sell? Or maybe you meet with Property managers/owners to paint apartments when they turn over? Both, and more are opportunities to talk about real estate.

Grandma and Grandpa's home with good bones but covered head to toe with wall paper probably doesn't scare you. Have you had any of those clients who ask for an estimate because they're "thinking about selling" and someone told them they need to do something about the walls, or exterior paint for curb appeal? That would seem like an opportune moment to ask why they're painting the house, and to share your ambition of getting more involved in real estate investing. I'm willing to bet some of them will offer to sell it to you right then and there, at a discount. They would avoid paying the real estate commissions and the hassle of getting the house ready for the market..... That's definitely worth something to everyone.. and worth quite a bit to some people looking to get out of a situation quickly.

Best of luck!

Anthony Gayden · Answer

Considering you are a business owner and that your business is highly seasonal, I would look for a property large enough to provide me with steady income in the slower seasons. I would also lean strongly towards outsourcing management since you will be busy with your main business.

When it comes down to it, buying one rental house is not going to make a significant difference to you, however a multi unit property that provides thousands in extra income monthly is what I would look for.