Starting Out with No Experience!

[Osarena Odia]

Hi all. I am looking to begin my real estate journey but feel stuck as to where to begin. I am interested in living in the place I own, but do not know what real live steps I should be taking other than listening to podcasts and reading books. I do have student loan debt and one of my major goals is getting that paid off first. 

Can anyone point me in the right direction or share some things I should be doing right now that could help advance me to next steps? Any suggestions are welcomed, thank you !!

[Daniel A.]

If you are interested in living in the place that you own, then you have a lot of possibilities open to you. As a starting point, I would recommend that you head over to a bank and speak with a loan officer. Take a pen and paper with you and figure out what it takes for them to qualify you. You can also find a lot about this information online, but generally a loan officer can look at your particular situation, debt and all, and give you a good idea on what you'll need. For instance, when I went to my bank, they gave me a mortgage proposal based off what I told them. At that point, it being just a proposal, nothing was verified, but assuming all was true, I had a decent grasp on the numbers. Those numbers weren't precisely what I had had in mind, but it was a start.

It would be a good idea for you to go to the bank with a property in mind. Print it off the website on which you found it and present it to the loan officer. That way he or she can punch in those numbers and give you a better idea. They can also let you know whether they are even able to finance what you're looking at. It was only after twenty minutes of discussing numbers that the bank loan officer told me that they don't finance manufactured homes. 

I generally recommend that you figure out the money situation before you get too deep into finding deals. This is because you could find something absolutely perfect, then find out that you don't meet a particular requirement at the bank that will take substantial time to remedy. And as to your student loans, they usually calculate that into your debt-to-income ratio.

Once you take the leap from reading books to getting mortgage proposals, the feeling is almost intoxicating. It makes you feel like you're making progress, like you're actually doing something. Then you must keep going forward to keep the momentum. And the best thing about a mortgage proposal is that it's free. It just takes time. Go and see what a couple different banks offer in the way of loans. Many different lending institutions have varying degrees of criteria. Where one bank might deny you, another might give you a warm embrace and a cup of coffee. Learn what they look for and start working toward exceeding their expectations.

After that, work up a lease. Even if you don't have tenants, or a property, you're going to need one at some point. Embrace the Sunk Cost Fallacy and spend the time making one. Find a sample lease and then read other leases, incorporating into your lease what you think is good. Soon enough you'll have a solid lease and you will have had hours put into making it. You'll feel like that time was a complete waste if you don't keep pursuing your dream of getting some real estate under your belt. For me, having a large majority of the paperwork already done compelled me to work harder on finding that first deal. I wanted to see all that hard work fall into place. And I tell you what, sitting across from the first tenant, watching them intently read over the lease I made, watching them fill out the rental application and sign on the line, I was elated. They were taking my work seriously.