I've read the books & visited dozens of properties. What now?

Question

Hello I'm new here. I want to learn real estate investing.  I've read several books on the subject and have looked at dozens of properties but i still don't feel well enough prepared for the task.

Ned Carey · Answer

You are right to be hesitant if you are not prepared.

I know they are good because I know values in the area, I know how to estimate repair costs, I know what other investors are paying, I know what the rents are and typical expenses, etc.

1) Learn what type of deals you want to do based on your interests and resources.

2) learn what makes a good deal. There are plenty of threads here on formulas for both rehabs and buy & Hold rentals.

3) Learn your market. You can't know if you have a good deal unless you know what a good deal looks like. Visit Auctions, open houses, listed and unlisted properties.

Good luck and welcome to bigger pockets  - Ned

Don Konipol · Answer

you might try getting an option on a property for a nominal sum ($100 or so) and then trying to sell for a profit during the option period.  This will let you test your knowledge of your home market in a real setting for little cost.

Karen Margrave · Answer

Jason C. Welcome to BP! There's been some great advice already given. You say your area has high unemployment and low prices. In many areas such as that, there have been large numbers of foreclosures, meaning many more people moving into the rental market. Not only do you want to know the comps for sales of homes in your area, you need to get up to speed on the rental market, vacancy rates, rents being paid, etc.

Whatever niche you are in, you have to KNOW it. Build your foundation. Then when you're ready to move to the next phase, bring your deal here and have others that are in that market comment!

Sean F. · Answer

It's great to see a few people in the same boat starting out and what directions they eventually all head.

I'm also in the process of nailing down my strategy, hoarding away cash, building credit, learning my market etc...

I like the idea of taking advantage of low owner occupied financing. I would love for my first purchase to be a multi where I could live in one of the units while I rehab. I think that would be the ideal situation for me to get started.

Tyler Byrnes · Answer

Welcome Jason. I am also new here. I have been watching for a long time but just started posting.

Do you already own a primary residence? If so, great. Would it make a suitable rental property if you moved out and bought a different home? That can be the easiest way to start.

Personally, my first property was a duplex that I lived in one side and rented out the other. Rehabbed while I was there and then refinanced and bought another property and went on from there. Moving can be a hassle, but there can be great opportunities when you can take advantage of low owner occupied financing.

Again, welcome and I wish you great success.

T

Ned Carey · Answer

Not exactly but the 50% expenses rule will generally keep you out of trouble. Get to know some local landlords and perhaps they can look over you numbers to see if your on target.

Mbei Enoh · Answer

Welcome Jason C. I'm new to this forum and know what it's like to be new to real estate.  A good mentor really helps build your confidence.  I suggest joining a local real estate group just so you know that your goals aren't crazy and a lot of other people (just like you) are doing the same thing.

Lisa Cunningham · Answer

I have found by "doing" was the best teacher.  I purchased a couple of systems that I wanted to focus on in RE.  It is easy to get all caught up in all the different avenues of RE. Look at where you want to begin and stay focused there until you learn what not to do and what to do.  I have found not all systems will teach every little detail.  RE is a risk....I give myself roughly around a 30% investor discount, and I focus on REO properties and "subject to"...stay connected with your local RE club/organization and keep asking those questions....

Jason C. · Answer

@Michael:  My written goal is as follows:

1) Learn real estate investing
2) buy and hold for cash flow and retirement wealth

Michael Pilarski · Answer

That's a great question I wish I could answer for you.  Since I cannot I do know there are threads on here that describe how to determine that that very thing which include the formulas for determining purchasee price, percentage of rents that go toward pay off, taxes, and future repairs, and that give the profit margin.  From what I've been reading on here most landlords are looking to get anywhere from $100 on up positive cashflow per unit after mortgage, insurance, taxes, and future repairs are paid per month.  I may get this wrong but there is also the 50% rule to take into account.  Search that and you'll be reading for days.  wish I could help more, but I'm still learning and haven't nailed down my startegy yet.  I will be putting a business plan together though.  Have you put anything on paper yet as to what you want to accomplish, how to do it, and what guidelines you will use to determine you goals?

I've read the books & visited dozens of properties. What now?

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