What came first...the Chicken or the Egg?

Question

Good evening.  I hope all of you seeing this post are doing well.  I am a novice to the real estate investing world.  I unfortunately was not afforded an opportunity at a younger age to be exposed to the power of passive income, passive income vehicles, compound interest, and a detailed planning for the future. Every day I wish I had "opened up my eyes" and picked up a book instead of an extra shift at work in my 20's after college.  However I now realize being stuck in regret gets us all now where.

In January of 2015 life drastically changed for me when my son was born.  I had a sudden shift in thinking and knew working my "Hazardous duty" job for 20 years just to collect a pension would not be enough to provide any last legacy for him.  I identified Real Estate as a great investment vehicle to establish and grow intergenerational wealth.

I have gone to seminars in NYC, read a few books, and listened to multiple podcast about real estate investing as well.  I know I am ready to "make a move", but I don't know what is the most important "first" step after reading all the books, taking notes at the seminars, and being motivated from the real estate Podcast.

Should I focus on obtaining a certain amount of money first for a downpayment/closing costs and 6 months of expenses?

Should I continue to research and identify deals in my market area?

Should I continue to build my support circles (Mentors, Real Estate Agents, Brokers, Bankers, Property Managers, Contractors)?

Or is there something I am simply neglecting?

I am extremely anxious to start, but as you can see I simply don't know where to.

Please let me know when you have a chance.  I look forward to hearing from you all.

Thanks for your time. - Warren

Michele B. · Answer

Here is what I would say to your father.  I would say dad, you taught me how to throw a ball, drive a car, but, I think I can teach you something about building wealth.  There are ways to live the American Dream(that is what he taught you how according to your comment, get a good job, get a pension, save, retire) and then there are ways of being wealthy.

I personally would not ask my dad.

I would just find someone(like me) who can find you an equity partner and then after you have a deal or two under your belt you can go to your dad and say....Here this is what I am doing and I would like you to join me in building some more wealth.  I hope this helps.

Tag me if you have any other questions. and vote for my posts if you like them. Please.

Jeremy Roberts · Answer

@Warren Barnett - I'd start with asking your dad only because I believe in family being there for family, but make sure you have a deal that you can explain easily to him. Remember, you didn't learn the value of real estate investment until later in life and your father is a huge part of why that is the case. There are plenty of le dears on this site that not only will help with real estate investment "your way", but their reputation to lend would be tarnished if they didn't do right by you.

Most important, know the people you'd partner with before the money moves. The way people act in any circumstance will tell you how they'll do business with you. Good luck.

Michele B. · Answer

I am confused on the fathers house being hard money. I am also thinking you are getting confused about the whole process. I get you like your friends and want to grow wealth with them but, friends/business is sometime tricky. And as you have stated they are different pages.
Here is my advice,

1. Find a deal for you to BRRR if that is what you want to do.

2. Let them know what you have found and ask if they are interested in doing this YOUR WAY.

3. Form a legal partnership with all the outlines for who gets what, who contributes what.  Everything in writing and all signed before any money moves.

4. if 2-3 do not work (and 3 is gonna cost some of your wealth) then find out if you can use the equity in your dad's place to finance the project yourself.

5. IF 2-4 do not work.....then decide if  you can afford to find an equity partner that is not one of those aforementioned people here.

6. Make money....Simple right?

I know its nerve racking but what if Edison said its to hard to try.....and we never had light....

well, Good Luck and tag me on any questions you might have as i am willing to help.

6.

Warren Barnett · Answer

@Michele B. thank you for your response and help.  I appreciate you taking the time to assist.

When I mentioned "utilizing my father and the equity he currently has in his home as my hard money lender" I was referring to him lending me money from a HELOC/ETC to invest in the purchase of real estate.  I would pay him back at a higher interest rate than he pays the bank, but at a far lower rate then any hard money lender would lend to me. I see you mentioned this in suggestion number 4. lol

"Here is my advice,

1. Find a deal for you to BRRR if that is what you want to do.

2. Let them know what you have found and ask if they are interested in doing this YOUR WAY.

3. Form a legal partnership with all the outlines for who gets what, who contributes what.  Everything in writing and all signed before any money moves.

4. if 2-3 do not work (and 3 is gonna cost some of your wealth) then find out if you can use the equity in your dad's place to finance the project yourself.

5. IF 2-4 do not work.....then decide if  you can afford to find an equity partner that is not one of those aforementioned people here.

6. Make money....Simple right?"

I am definitely going to utilize your road map above.  Thanks for taking the time to lay this out in laymen terms for me.

Nerve racking is an understatement.  At times I feel very confident.  There are then days where I do not know what the next step should be.  Your Edison quote is spot on however.  I guess I have one question left for you if you don't mind.

How do I approach my father to allow him to understand the power his equity has to change this family forever?  He isn't business minded, and is cut from the cloth of "you get a good job, with good benefits, and a pension so you can retire." I was told you should never attempt to "force" someone to believe you way is the best way.  That you should only present the opportunity you have and allow them to hopefully see it as viable for their own interest.  Any help in this area would be appreciated as well.  Thanks -Warren

Thadeous Larkin · Answer

@Warren Barnett - Saw you posted this a month ago.  Any updates on where you're at?

Account Closed · Answer

Find a deal, make an offer on it. That's what I did after 4 years of screwing around and dreaming and wishing and reading. Closing on fourplex in 11 days.

What came first...the Chicken or the Egg?

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