What is my first step investing in real estate with little cash?

Question

I have devoured the content here at BiggerPockets and I know I have been given the tools to step out and do it.

After I have written my business plan what do I do next? Find a mentor? Find a deal?   ????

I’m a late bloomer meaning I am older to the game because I have worked for others all my life and I am finally ready to commit to building wealth for myself. As an older newbie to real estate investing I really would like to fast track my progress as much as possible. What would be a good starting point for someone like me?  Would purchasing a program move me along the path to success better than struggling on my own to understand the process?

Will Fraser · Answer

Hi @Nathaniel Barnes, welcome to the BiggerPockets forums and to the world of real estate investing!

First, I want to de-emphasize your age.  It doesn't matter, Nathaniel.  It's like a Roth IRA.  Yeah . . . it you could go back in time and put money in it from the time you were born you'd be filthy rich by the time you're 60 (because that's what 59 years in the market tends to do), but most people doing that math don't have a time machine.  So, focus on what you can do and forget the past.  It led you here, and prepared to take action at the right time, which happens to be exactly.this.moment!

Go back to your planning and write out your big WHY.  Why do you want to invest in real estate?  What would you ideally see true in 10 year?  How about 30?  How about 100?  Yep, you probably won't be alive for at least one of those, but that's the point.  When you really clear about why and where you're going, a lot of the other stuff answers itself.

To the idea of fast tracking.  Don't.  Read The Richest Man in Babylon asap. . . . like this week!  Wealth FLEES from people who would hold it to an expectation of returning more money than it does.  It FLEES man.  I know you want to build wealth and wealth fleeing is the opposite of that.  These courses and gurus sell you "fast tracks" and it's generally the opposite of wisdom.

Find a deal.  That's the bottleneck in all of this.  Find a deal, then invite a partner.  Sell it and recycle the cash into your next deal.  Once you build up the cash to take down the deals yourself and you've gotten better at the execution, then stop selling them and start BRRRRing them.

Damaso Bautista · Answer

@Nathaniel Barnes

Hey Nathaniel welcome to BP.  You said you are "older in the game".  So the first thing I would do is a self assessment of your personal financial situation.  I don't know how old you are but you can learn alot about yourself and your future success by studying why up to this point you have "little cash" as is stated in your title. You have life experience to take advantage of.

After doing a self financial assessment then you can come up with a plan to save money.  Explore opportunities that you may have missed in the past and figure out how to capture some of that.

I believe you need a solid financial foundation first then you can move into your business plan because with little money it is very difficult to be successful in real estate.

What I always try to preach it that there is no magic pill, no secret portion or miracle when it comes to real estate.

Good luck!

Carl Fischer · Answer

Welcome to BiggerPockets and Real Estate Investing, @Nathaniel Barnes! To add onto the great points made by @Will Fraser, turning your focus to building wealth can be done at any age, and is a great way to better prepare yourself for financial freedom down the road.

Some ways to get yourself started can include saving for retirement via employer match, connecting and building relationships at live, local investor events or via investor forums such as BiggerPockets. Using the resources that are readily available such as the BP Rookie Podcast or books/online publications are also great ways to learn more about the investments you would like to make. If you can, find a mentor who can work with you on your first few deals. Things to consider when purchasing programs include first-hand reviews or recommendations. Hearing from the experiences of your peers with programs will help you determine if they're right for you.

Later down the road when you have more experience and funds saved, another means of growing wealth would be using your retirement savings. Self-directed IRAs allow your IRA to invest in alternative assets in order to grow your retirement savings. BiggerPockets provides a list of self-directed IRA custodians that for you to reference on this site. You can check out that list here. Things to consider when choosing a SDIRA custodian are customer service, knowledge, experience, and processing speeds, as they will be integral to ensuring that the investments you have chosen to self-direct are facilitated efficiently. Many investors have found success through investing in alternative assets with their self-directed IRA, including in real estate. You can own residential, commercial, raw or improved land in your IRA.  Once you find the custodian that is right for you, you can make investments in alternative assets to grow your future retirement savings through ways that utilize your personal knowledge and expertise.

Of course, SDIRA is an option that you can look into further down the line in your investment journey. Right now, the most important thing you can do is learn more about investing from your resources. You should always consult a financial advisor to evaluate the best options for you. Best of luck to you! I would be happy to connect if you have any further questions.

What is my first step investing in real estate with little cash?

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