Starting RE investing with little knowledge/money

[Hunter Keil]

Hello all!

I’m currently going down this rabbit hole of learning about real estate investing and flipping homes. I love residential construction, and it’s been a dream of mine to start owning property and achieving financial freedom.

I’m 23 years old, no college degree, and I recently started a job as a project manager for one of the largest home building companies in Michigan. It’s been an incredible learning experience, but I can see myself getting stuck in this 9-5 job, especially once I have more and more bills. So I think it’s best for me to start young and at least get my feet wet.

I have almost zero knowledge on buying and selling property and little cash saved up. So I’ve already started listening to the BiggerPockets podcast, which is awesome. And I’ve set up a meeting with someone who does this for a living. 

The reason I’m writing this, is to see if some more experienced RE investors could give me some helpful advice as to where I can start. I have a partner who’s my age and also knows very little. But I have the building skills, and he the financial skills.

What’s our best way to start this? I’m nervous to quit my job, because I need money to pay the bills, but I know this isn’t easy and requires a lot of attention and energy. How can I do this on the side, and then later decide to put full time to this dream?

Thanks! Excited to hear from this community!

[Patricia Steiner]

It's hard to overcome stupid...don't quit your job. The knowledge you'll earn while making a paycheck is invaluable.  Have you heard the phrase "Watch a little Star Trek, learn a little Klingon?"  A little Klingon is way too much; try it at a party and watch people flee fast.  But a little knowledge in real estate will kill you.  It's a lot of money, a lot can go wrong and usually does.  You're not ready financially, knowledge-wise, or skill based.  Here's what I recommend:

1.  Stay on the job. Soak up on things construction.  Unlike your company, you won't have the money to hire a lot of trades so you'll be doing a lot of the work yourself.  Learn it.  Make a list of good trades; you'll need them.

2.  LEARN.  Devote an hour a day to it.  Don't take the sales/marketing stuff.  Learn what it takes to flip a house.  

3.  Mentor. You've got nothing to offer one.  An experienced investor is running a business. Would you ask your company's CEO to mentor you?  Probably not.  Have something to offer; maybe do side jobs for flippers in your market to see their projects, learn the drill, more.

4.  "Virtually buy."  Go online and look for properties that you feel you can afford as a flip. Complete a work plan; determine current value; determine flip value - and rental potential. How will you finance the rehab?  How you finance/buy the property?  How long will the project take?  Is there a market for it when you're done?  I've seen a lot of newbies do flips in markets where no one wants to buy.  Price cannot be the driver.

5.  Go to real estate investor meetings; many are being virtually.  Meet up and learn.

And, then you'll be ready to engage an investor-focused realtor who can help you target the right properties at the right valuation.  Please don't "take the plunge." Do the work, invest in yourself, build your tool box (knowledge/skills/savings) - and then you'll be ready to leave skid marks everywhere.