New to idea of real estate investing where to start?

Question

My wife and I are new to the idea of investing in real estate, where should we start our learning? (E.g. what books, classes, seminars, etc. should we start with?) We have read some, and listened to a few of the BP podcasts, but we are looking for some hard nuts and bolts information to start pairing with the theory.

Tchaka Owen · Answer

@Andrew Semler - based on your questions, it is possible that you're overthinking and overanalyzing, which will lead to you not ever investing. You can only be so conservative before you become a detriment to your ability to invest. You're reading BP and listening to podcasts.....good. You're being frugal and saving money.....good. Keep doing so. As far as strata, etc, etc, that's for you to decide. There are many angles to/in REI and you go with what you and your wife are comfortable with. There isn't a single successful path, there are many that work. I'm working to catch up with the podcast and I skip some that aren't down my alley. After listening to podcasts, chat with your wife and together figure out what you liked and what you're not interested in. You don't have to listen to every one to make your decision. Hope that helps.

Nick Giulioni · Answer

I would say you should listen to episodes of the BP podcast to figure out what kind of investing you want to do. Then you can dig into different resources.

Feel free to hit me up separately.

Frank Hinck · Answer

@Andrew Semler

Take a year, I know it seems long but trust us real estate and “deals” will still be there albeit anything you’re looking at now won’t.  Take a year and 1- listen to a BP Show per day, 2-cut your living expenses as much as you can believe it or not you can find $1,500/month by reducing rent & car & cutting luxury expanses and in a year you will have $18,000 - this will suck but it’s an investment!!    3-Network! On BP forums, meetups, REIAs, coffees, find your local experienced operators/NOT paid gurus and see if you can help them find deals, drive for dollars, analyze deals, line up contractors - it’s your unpaid internship to soak up as much experience as you can handle - - best of luck!!

Mike D'Arrigo · Answer

@Andrew Semler Start by clearly defining and quantifying your goals and criteria. It's not enough to say you want cash flow. Quantify how much cash flow you want and what cash on cash return is acceptable to you. Once you define that, figure out whether you can achieve your goals and objectives in your local market. If not, don't be afraid to look outside of your hometown. Start researching markets that fit your objectives. Look for markets that have growing populations, growing jobs (pre covid), modern, diverse and growing economies. Look for cities that are business friendly and are investing in their infrastructure that will attract employers and jobs. Also look at states that have favorable landlord/tenant laws and reasonable property taxes.

Marlen Weber · Answer

Do a quick search on books on markets that you are interested in going into. Be active on here and connect with industry professionals. Do you know what type of investments you want to go into? Also, if you're able to hire a mentor, it would also help tremendously.

Andrew Semler · Answer

@Tchaka Owen Thank you for your insight, and yes, it is possible, and even likely, that I am overthinking things. As a check on this, if I were to say to you "Tchaka, I know nothing about real estate investing, but I have to make a deal in 6 months. What is the minimum that I should know/have read and have done by then?" What in your experience would you tell me?

Mike D'Arrigo Thank you for your advice as well! Would you recommend setting high goals to keep one striving early on, or simply what would make one "financially independent" and building from there? I guess this is to say, is it better to set an "out there" goal early on to keep hungry, or be more conservative at first to keep it 'attainable' and the progress more palpable?

I have heard Brandon Turner say that he doesn't go below 12% in cash on cash returns in the BP podcast, but in the Thach Nguyen BP interview it was said that newbs and pros should not have the same numbers. Is 12% unreasonable for someone starting out to look for? Should I identify the type of investing I'm looking to do (i.e. single family, plex, apartment building etc.) before delving into market metrics? Or is it really not going to make that much of a difference? For market research, are there specific websites that you recommend becoming familiar with? Or should I just start with google searches? And the same for rental laws and property taxes?

Thank you all again for your time and insight. We really appreciate it!

Andrew Semler · Answer

Thanks! I will definitely do that this week.

Andrew Semler · Answer

Thank you both for the quick response and advice!

Frank:

We are already thinking about taking about two years to save up and learn before jumping in, both because of our inexperience and in hopes that the pricing in market may go down (at least that is what I have heard from some).

My introduction to the BP podcasts has been through YouTube, and rather sporadic at best. There seems to be about 5 different BP podcast lines. Should I stick to just the real estate podcast or switch between all 5? (we do have hopes of starting other businesses as well if that helps) Further, should I start at the beginning and just listen through, or start picking and choosing based upon what seems to apply to our situation?

We already live rather frugally, but we have discussed trying to budget down even further as well as picking up a couple of side hustles that will go solely into an investment fund. I realize that this is market specific (we live in Indianapolis if it helps at all), but is there a target amount you suggest aiming at?

I like the internship idea. Do you have any suggestions on how to approach these people? That is, do we just show up cold at these events and say "Hi, we're new and looking to learn?" Or do we need some basis first? I ask because I listened to the BP real estate podcast #300 yesterday and a gentleman, who I believe was an oncologist, said that you should have read enough before approaching a 'mentor' to show that you have enough commitment to learn the language and the general terrain that you have skin in the game and are not just looking to get rich quick.

Also, do you have any suggestions on what kind of person for whom we should look? Should we look for those who have been in the business longest? Those who have the best portfolio? Those who's beginnings were most similar to our own? Those who have the most varied toolkit they draw on? Also, should we find only one person and work with them, or is it bad etiquette to work with several?

Thank you again for your advice.

Marlen:

In reference to books, by  "markets that [we] are interested in going into" do you mean location (viz. Midwest, Indianapolis, etc.), do you mean economic strata (e.g. High end, middle class, last stop before the street as Kiyosaki would say, foreclosures, etc.) do you mean type of sale (Fix and flip, wholesale, rentals, etc.) do you mean type of structure (single family, plexes, condos, apartments, etc.)?

Honestly, we are not sure what kind of investments in which we are interested. That is, from what we can tell, we want to have cash flowing properties leading to financial independence. However, in that regard it would seem that what most suggest is starting with single family, moving to multi-family, and then to apartments. Though, I full well accept this perspective could very well be naive.

I have heard of the concept of hiring a mentor, could you be more specific as to how exactly that works? Where should we look? For what kind of person should we look? How do you approach them and how much should be offered?

Thank you for your advice as well!

I apologize if any of my questions or statements are asinine, naive, or uninformed. Like I said, we are VERY new to this, and I really don't mean to be trying. Our introduction to this was from reading Robert Kiyosaki's 'Rich Dad Poor Dad' followed by 'Cash Flow Quadrant'. Whereas I appreciate the financial philosophy in the books, they are painted in very broad strokes, and we are looking for more brass tacks as far as how this actually works. I have been trying to find as many resources as I can, to get a better grasp upon how real estate actually works. I have been following the 'Rich Dad' channel as well as Ken McElroy's channel, random other bits I can find here and there and recently Bigger Pockets.

So, I suppose follow up specific questions would be:

A) Are the previous two sources credible or are they more sensational?

B) We were originally going to try to finish the 'Rich Dad' series, but then thought we should get more concrete information before continuing on. So, next we were going to go through Ken McElroy's 'ABC's" series and Kiyosaki's 'Real book of Real Estate', but then I heard about David Greene's 'BRRRR' book and Brandon Turner's 'Investing in Real Estate with No (and low) Money Down', 'Rental Property Investing', and 'Managing Rental Properties' books. Which of these books should we start with? Or, is there another title(s) that I have not heard of that would be a better place for us to start building our literacy on the topic?

C) Is there anyone in addition to BP that you can recommend Newbies following/reading?

D) Should we start looking into getting a real estate license if we want to be serious?

Again, we would like to thank both of you, and all others, for you time and insight.

New to idea of real estate investing where to start?

Most Popular Reply