Starting Out With Nothing...How Do We Start?

Question

My husband and I want to get started in real-estate.  We would like to eventually own rental properties, flip houses, and maybe do some wholesaling.  Here is our dilemma:  We only have a VERY basic knowledge of fixing up houses (painting, some drywall...etc), we have zero ability at the moment to get a home loan (because my husband recently started a commission-paying job), we don't know of any investors...and even if we did, we don't know if they'd be willing to invest with us because we don't know what we're doing.

So, how do we get started?  Do we need to take some time to learn all the ins and outs, or do we jump in feet first and learn as we go?  We are 36, have 6 kids, have not been very smart with money until recently, and want to become financially independent asap!  We live in Central Missouri, if that makes any difference.

Will Pieper · Answer

Columbia, MO investor here! There is definitely opportunity around here but financial independence doesn’t happen over night. I began investing two years ago with a partner and it has gone well so far. I find the properties, figure out financing, and work numbers, and he estimates repair costs and manages subs. If you don’t want to learn or don’t have time to learn, it’s usually best to partner with someone who has the skills you don’t. You do end up losing some of your gains but if you pay attention, you can eventually learn from them and operate more independently in the future.

A good place to start is saving money, educating yourself and getting a plan together. Next find your local rockstars: Realtor, property managers, contractors, and banks. All these people will have perspectives and information for you.

We started with limited experience and funding but we have learned a ton over the past few years. We first bought 2 duplexes; we have since done 3 flips and own 7 properties with a total of 10 doors. Feel free to reach out to me if you want to talk about it sometime! I would be happy to talk about my experiences with you and give you pointers.

Will

Matt Groth · Answer

Partnering is great, but you have to bring something to the table. Figure out what your strengths are. You said you have no money, no skills, no real knowledge, and I'm guessing, with 6 kids, very little time. It isn't easy. The best way to start,  in my opinion, would be a house hack. Large house, with an apartment or something similar. Flips will be tough if you can't do the work, and have no way to estimate. Start small, and learn as much as you can.

Matt Nico · Answer

@Rachel WoodRachel, I would focus your efforts on learning real estate in the immediate future. If you have the time to do the construction, I say go for it. Do you currently have any assets? Do you have a house with some equity in it possibly? That could be a good place to find some hidden money to be able to invest. If you own a house right now, I would see if fixing it up at all would increase its value in your area. That would be a great place to start learning rehabs. I learned from trial and error for some things, and then a lot of youtube videos. If you want, I could recommend you to a Youtube channel that is great for a lot of first time projects. The guys teaches painting, drywall, laying tile, bathrooms, everything.

It might be very difficult for you to find a partner as you cant really bring any value to the table currently. I'd say to find another source of income to save up for a house, and buy a property that has an in-law suite, or a place where you could build one. So you could get practice with the construction in your own home, and when your done, you can rent it out and get exposure that way.

Happy Housing,

Matt

Dave Spooner · Answer

@Rachel Wood if I could offer some quick advice - focus on one strategy and pursue it first. By that I mean buy and hold, fix and flip, house hacking, etc. Wholesaling requires a great network, so likely will take quite a bit of time to work up to.

Your local RE association is a fantastic place to start meeting people and learning more. Figure out which single strategy makes the most sense for your family and zero in on it.

Good luck as you get started!

Anthony Dadlani · Answer

@Rachel Wood

Everyone starts somewhere. You have taken the correct first step in networking and educating yourself. Real estate is certainly a way to create income and wealth over time. . It’s not a get rich quick scheme. My suggestion would be to start focusing on wholesaling and or fix and flip. Start putting together some savings and Capital that you are willing to invest, that way you will be able to convince a joint venture capital partner to invest with you in a project you will find and manage.  ￼￼￼ Our company works with many project managers in that way￼￼.

Would certainly be willing to have a conversation with you when you are ready. Please feel free to reach out.

Best of luck in all your endeavors.

￼￼

Rumen Mladenov · Answer

Is there a real estate investors association nearby? It may be helpful for you to attend some of their meetings to make some connections and learn a few things. If you can do painting and drywall, that will be helpful when you are able to purchase a fixer upper that needs cosmetic work. When you say you have not been smart with money until recently, does that mean your credit is bad?

Starting Out With Nothing...How Do We Start?

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