1. Since I had been feeling vaguely unsatisfied with my life, I scheduled a tandem parachute jump.
2. The parachute failed to open properly, and the instructor and I plummeted the last four hundred feet to the ground. Thankfully, I managed to grab him and twist him underneath me just before we landed and bounced three times.
3. In my coma, I saw --
Come on, Edwin. You're setting yourself up for analysis paralysis.
No. The way I got into real eatate investing was that my wife called me up and told me we were buying an investment property.
There was no pivotal moment of decision, no holy calling, no near-death experience with a message from beyond, no vision quest in the desert, no mystical signs and angelic fanfares from the heavens. I was dragged into this.
If you're looking for the red-carpeted, velvet-roped royal road into this, all you're going to find are well-dressed and accessorized gurus with their hands out. Get out there, start doing stuff, get beaten up and take your lumps, and get back up and do more stuff.
1. Live financially responsible and save up money.
2. Educate yourself via books, websites, blogs, podcasts, real estate meetings, etc. every single day. And make sure your partner is also on board with the master plan.
3. Met with a real estate agent to discuss a strategy and plan. This plan changed several times, and continues to morph as the business grows.
4. Met with a mortgage broker to assess what a good financial strategy and costs might be. No sense in looking at $500k apartment buildings if you can only get a loan for $150k.
5. Started actually looking for multi family housing to purchase.
6. Talked about my real estate investing and plans with everybody I know, which lead to two additional partners investing with me.
@Cody L. How did you acquire it? MLS, mail outs, word of mouth?
My *VERY* first? It was out of state. I was in Ca. A friend of a friend managed properties in Houston. To get more clients he'd find turnkey properties for sale on the MLS that he thought were good targets to buy then rent out. He'd say "Hey Cody, got this property. It's $100k. We could rent it for $1,100. the costs would be x, income would be y, your debt would be z. It comes to a return of ...". That seemed to make sence so I bought it.
It wasn't till several years later when I was in Houston that I decided to look at multi since finding SFH that made sense was too hard and I didn't want tons of properties sprinkled all over the place.
Today, since I don't buy SFH, I don't buy much from MLS. But I do every so often. I'd say 80% of my deals are brokers calling me with an off market (or "not much on market") multifmaily deal.
I guess I would describe the most significant points of my path as the following...
1. Bought primary residence with 20% down in 2017.
2. Couldn't imagine working to 65+ years of age relying just on a 401k and W2 job, so I looked for ways to invest for passive income and stumbled on real estate.
3. Started out with the Rod Khleif podcast for a couple months, until I found BP and then I was hooked. Absorbed all of it over a 9 month period, read books, read the forum, went to a meetup, etc.
4. Took out HELOC on my house. With 20% down, 2.5 years of mortgage payments, and the property appreciating about $20,000 from what I paid, I had enough capital to work with.
5. Formed a team, which was my realtor (from meetup) and lender (from first property purchase) and found a property. Attorney came into the picture when I needed one to review the contract.
Full disclosure: Just closed on this property on 10/23 and still have to do some minor improvements and rent it out. The goal is to have it rented before Thanksgiving.
1. Live financially responsible and save up money.
2. Educate yourself via books, websites, blogs, podcasts, real estate meetings, etc. every single day. And make sure your partner is also on board with the master plan.
3. Met with a real estate agent to discuss a strategy and plan. This plan changed several times, and continues to morph as the business grows.
4. Met with a mortgage broker to assess what a good financial strategy and costs might be. No sense in looking at $500k apartment buildings if you can only get a loan for $150k.
5. Started actually looking for multi family housing to purchase.
6. Talked about my real estate investing and plans with everybody I know, which lead to two additional partners investing with me.
Great answer. #1 is so important, and I think it's not talked about enough in the real estate investing space. Being financially responsible is the first place to start.
Mine were, after doing #1 for a few years:
2: Get educated in real estate
3: Decide not to go get an MBA, hire a mentor instead.
4: Network and meet potential partners
5: Pull the trigger!
Now I'm a few deals in, continuing to build my investor network, and I run a networking group with 500 members in my area which I started on my own.
RE wasn't even a thought in my mind until my landlord asked me if i wanted to buy the 2 family house where I was renting because he was going to list it, then after negotiating and making the deal....
1. Applied for a loan, 2. Retained an attorney, 3. Lost sleep and was nervous, 4. Left myself with only $500 to my name after closing, 5. Never looked back!
3. Studied the market (I’m a realtor so I had the basic idea)
4. Put AGGRESSIVE offers in - didn’t want
5. Repeat
My advise once you make the decision you want to do it, just do it! Don’t spend too much time dwelling on anything. In the beginning don’t nickel and dime and loose a deal off of a little bit of money.
@Cody L. just moved out to oceanside you do any meet ups?
No. But I should just to say “hi”.
I did a meetup in Houston. I was asked to speak at one ran by the guys out there. It was fun (though not sure why someone would want to hear me ramble for 40 min)
Nothing wrong with educating yourself and learning... nothing wrong with just going out and buying a property.
Most of these lists start with one of those things as #1.
I would suggest -
1) Create a realistic business plan.
This is your plan of attack to creating a BUSINESS. Remember this is a business and you are dealing with large sums of money and what is usually the most valuable asset anyone ever owns in their life. A business plan aligns your thought processes and helps your future interactions with sellers/investors/lenders and so on.
2) Learn how to accurately understand how ARV's are decided. From an appraisers point of view... YouTube/coursera/blogs... but take note *the appraisers point of view*
3) Learn as much as you can about costs of typical repairs. Go to HD and learn about what all the materials costs... make a list, make a database... how much is a vinyl front door compared to a solid wood one in your area... you should know. Along with materials learn how much labor costs are... talk to contractors and ask how much it might be to redo a bathroom, then ask why, then learn how much it costs to change a light fixture or a tub or retile or put up new framing... national averages can be a starting point and you can use google to find those
4) ****Analyze a property every single day. Get very used to the numbers side.
5) Act. Do. Leap. You’ll learn exponentially more when you are in your first rehab then you ever could from reading or studying.
BONUS #6) Learn to say no. Stick to the business plan. Even though it feels like opportunities will never come around again... they do. You’ll know when your ready for that big step or when it makes financial sense to deviate from the business plan... however, it is basically never the right time in year one and very unlikely the right time in year two.
Great Thread OP! 1. Discovered I had a curiosity for how housing worked, behind the scenes... after working on construction
2. Worked in Restoration as a Project Manager for 4+ years and got an understanding for costs, order of construction, permitting etc.
3. Attended University to get a better handle on financing, business, debt/equity markets and networking
4. Got a job as a Property Manager, learned a great deal of skills through experience - now working my way into Development Project Management
5. Purchased a principle residence with my wife, converted it into 4+2 (we live in the basement atm) tenants pay for the mortgage+util, we contribute for difference left for insurance/property taxes (still less than what rent would be elsewhere)
Hey Dylan, just curious how much percentage wise you put down on your principle residence? I live in Canada too and have yet to buy my first house. I am weighing my options of where I want to live and most places I look at are between 400-600k. I ran the numbers and even with 20% down the mortgage isn't fully covered. Of course these are in nicer areas. I could go the cash flow route and buy in a cheaper city or province, but then its also a principle residence so I have to take into consideration where I actually would enjoy living, plus the higher price places have better appreciation (at least the ones I am looking at). Thanks