What should I be doing while saving for a down payment?

Question

Curious on what you guys think I should be doing while saving for a down payment. What I'm already doing is educating myself with books and webinars and analyzing deals. Should I be attending more networking events? Finding a team out-of-state?

Matthew Perimian · Answer

Hi Kameron, I would recommend going to as many open houses for potential investment properties as you can. Getting familiar with properties in your area and what a good building is vs a bad building is a huge advantage when you go to make your purchase. It will also help you you get to know Realestate professionals in your area who may be able to help you find a good deal when you’re ready to make your purchase.

Erik W. · Answer

It depends on what kind of investing you plan on doing, and how you plan on making your profits.  Here's an example:

If your goal is to purchase a buy and hold rental and manage it for a period of at least 5 years, then odds are you'd want to do all the stuff folks above are talking about: join a REIA, research the market, learn about land lording best practices,learn the land lord/tenant laws of the state in which you will invest.  This approach focuses mostly on gradual, persistent predictable, solid growth of the investment over time and is what makes many people wealthy in real estate.  It does not provide a whole lot of cash return in the short term.

But if your goal is to buy off-market properties for below market value, rehab them, raise rents, increase the property value, and flip them after a year or so, then you would do better to find money partners now so you can start getting those deals and churning that money.  This approach focuses mostly on quick, decisive, off-market knowledge and delivers quick cash returns in a relatively short period of time.  Velocity of money is key here.  You can take the same $10,000 and put it to work 3-4 times per year and double, tripe, or quadruple it just as quickly as you find the right deals.

The two strategies can be combined ultimately and those who do successfully become wildly successful.  But that takes a little time and practice; otherwise, you'll be like a chicken with your head cut off....running around making a mess of everything and ending up....well, in a very bad spot.

Your goal(s) will determine your methodology, and your methodology will determine what actions you should be doing today, tomorrow, a week or a month from now.  So, I recommend for step 1 you should figure out what do you want to do.  Btw, there are more than just the two strategies listed above.  Those are simple 2 common ones.

Theresa Harris · Answer

@Kameron Holloway  Look at some places locally through open houses and study the market where you will be buying.  Even though you won't be buying locally, you can get a better feel for what you want in a place.  Do you know where you want to buy?  Find others investors in that city and see what they are doing.

Mark H. · Answer

@Kameron Holloway

Find a local real estate investors meet up and start going.

Mike Dymski · Answer

Same thing you would be doing if you already had the down payment...analyzing real opportunities in your target area.

Kerrel Gomes · Answer

1000% educating yourself on what to do with it. Attend TREIA meetings, networking events, meet local rehabbers and investors. Understanding how you want to invest and where to invest will maximize you learning and profit when it comes to real estate investing

Corina Eufinger · Answer

@Kameron Holloway One of the best ways to do it is scour FB for local (or state wide) investor groups once you've narrowed down where you want to invest.  If you are going to invest in North Carolina search for Charlotte, Raleigh, Ashville investor groups [Charlotte real estate, Charlotte landlords...]

You can also check meetup.com for groups.  I don't think they communicate a lot on meetup but they might list a FB group or other group platform you can join.

You can also ask for suggestions on groups on here as well. Or check the events section from time to time to see regular groups might exist and you can inquire about a FB page or other communication platform.

Sean Poulos · Answer

What's to say you need money for a down payment? If you find a deal, you may not need as much as you think you do if you decide to partner with someone. It's wise to have reserves, but don't let a certain dollar amount that you're aiming to achieve for a down payment prevent you from starting sooner if you can.

Corina Eufinger · Answer

Online networking if you plan on investing out of state for sure.  If you are going to stay local a combination of local and online networking.  If you are doing rentals you can also start creating your policies and procedures, etc That way you aren't rushing to get all the together when you buy. Education is great but it would pay during your "down time" to stop reading and start creating the nuts and bolts.

Calvin Ozanick · Answer

Do as much research as possible. Analyze deals in whatever areas you want to target. Begin doing market research to find the area with the most promise (I highly recommend Southern WI, like Janesville or Beloit). Then begin reaching out to people in those area. You should know if you want to jump into a fix and flip, buy and hold, BRRRR or any other kind of deal. Then you should begin learning exactly what you will do from the time you get into the property until the time you get out. Your exit strategy is just as important as how you get into a unit. Best of luck and make sure you plan out as much as you can along the way.

What should I be doing while saving for a down payment?

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