What is the best way to get started as a real estate investor?

Question

Hi it’s time I got into real estate investing. I’d like to know the best or preferred way to start. Is it wholesaling? Rentals? I work a full time job and want to know what’s the best route.

Abel Curiel · Answer

Good morning Brieer,

Glad to hear you're getting started!

I cant wait to see all the great feedback you'll get on your post from the BP community.

My recommendation for the best route is to start with the end in mind.

If you're looking for something passive so that you can focus on your job and other obligations, buy & hold rental property could be the best route to take.

If your intention is to run a marketing campaign to find deals and sell them to an end user or other investor, wholesaling could be your best bet.

No matter what you choose, please find someone in your market with market knowledge and experience and offer them coffee, lunch, or volunteer your time to add value to them somehow.

Best of luck to you moving forward!

Abel

Erik W. · Answer

What's the best flavor of ice cream?  ;-)  Whatever your taste buds prefer...

Buy and hold investing is one of the more passive ways to invest in real estate, true, but it really depends on your goals.  I suggest taking time to sit down and write out what you want to do, how much time, money, and energy you have available to commit, and where you want to be 5, 10, 15, 20 years from now.  Do you want an "empire" with hundreds (or thousands) of units?  If yes, that's going to require a far different strategy than if you just want a few nicely located homes that will appreciate over the years to supplement your day job income and/or retirement.

Be sure to include timeline too.  Do you want to shift full time to real estate now, in a few years, or ever?

Do you really want to own houses or just be a land lord, because even that is going to determine how you approach this. For example, have you ever considered investing in notes (mortgages)?  Or what about master leasing and rental arbitrage (i.e. you rent from owner A, you are the master tenant B, but you sub-lease to tenant C at a higher rate)?

Lots to think about, which is why having specific goals and desires clarified up front is very important.  Otherwise you may find yourself owning a mish-mash of all sort of different stuff and going in a half dozen different directions, and none of them helping you achieve what it is you most want.

I'll share with you one of my goals:

* Retire in 10 years or less with triple my W-2 income from managing high cash flow rentals.

Scott Johnson · Answer

@Scott Johnson asking what’s best for you isn’t necessarily going to give you the correct answer. We’re all different, and what’s best for you could be a waste of time for another person. Just start exploring your options.

Scott Johnson · Answer

@Brieer Doggett, wholesaling is a good way to start because its a great intro to finding off market deals and working with distressed clients. Going right into rentals could be great as well!

Take a step back, decide what your goals are, join a local REIA and start talking to people who are doing each. Talk with people doing different things as well, such as trailer parks, storage and commercial. You’ll learn a lot and ultimately find what you’re interested in starting with.

From there, as stated above, you’ll want to talk with someone who’s doing it. I like to work for them for free, of they’ll let me, just so I can learn. I’m not super into rehabs, but that’s what I’m learning now, since they’re a great way to get working income.

Rob Witt · Answer

@Brieer Doggett

The answer is yes. Just depends, if you work a full-time job you won't be doing fix and flips very fast if it just you. As an example.

Scott Johnson · Answer

That makes a lot of sense. It is definitely working income. In whatever you do, just make sure to educate yourself and get a mentor who's doing what you want to do. You'll do fine.

Brieer Doggett · Answer

@Scott Johnson I understand that both require a time commitment. However through reading and research it seems as if wholesaling is almost like another job and with my crazy work hours I don’t know how realistic it will be. Buy and holding seems like I can leverage other people’s time for a fee such as agents and property managers.

Brieer Doggett · Answer

@Abel Curiel sounds like buy and hold may be the best option for me.

Aaron K. · Answer

@Brieer Doggett probably not wholesaling unless you want to get discouraged. Probably rentals because even if you screw it up you still see how the process is supposed to work and if you hold the property long enough you'll probably do okay anyway.

What is the best way to get started as a real estate investor?

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