Wanting to get into Real Estate Investments, but looking for advice

Wanting to get into Real Estate Investments, but looking for advice

Murrieta, CA · Member since 2011 · 10 posts · 4 votes

I'm wanting to get into Real Estate investments, but not even sure where to begin.

I'm a small business owner that makes low 6 figure income. I have a home in So Cal I bought 2 years and am aggressively paying down a $210K mortgage (should have it paid off in a 7 more years). I'm wanting to get into Real Estate since the housing market in my area is in the toilet (you can get properties on the penny right now). Home values have decreased as much as 50% to 70% in my area since 2007. I'm in my 30's and my long term goal is buy homes over the next 20 to 30 years, turn them into rentals and hopefully have enough homes that can position me to be a good place financially when I retire (I also invest in Roth IRA's, so I diversify a bit).

I'm totally new to all of this and I'm wanting to find a community of others that have done this (or trying to do this) to get your insight. Curious if there's any place you'd direct me to get started, like a good book to educate me to begin this process.

I'm very conservative financially and I've watched so many people here in So Cal get caught up in speculation with the housing market, so I tend to go at a snail's pace with my money. I'm a bit uncomfortable leveraging myself with credit, but would rather take a slow and steady approach of buying a rental home, getting a renter in it, pay off the first home, buy another rental property, the take the money from the 2 rentals and roll that into the 3rd home, etc. I'm sure there are so many factors that I'm absolutely clueless about (taxes, crazy tenants, property management, etc.). I'd like to learn as much as I can from the community to begin informing myself to move in the right direction.

Thanks!

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Specialist · Cleveland, OH · Member since 2011 · 1k+ posts · 852 votes
14y

Welcome to the world of investing Tom!!
My plan is pretty simple. I flip contracts and houses to buy free and clear rentals. I am not one to leverage, I like to keep it simple and sleep well at night. It is not the only way to do it, but it works for me. Good luck!!

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  • Homeowner · Burleson, TX · Member since 2008 · 756 posts · 376 votes
    14y

    Welcome to BP Tom. You are in the right place and asking all the right questions.

    There is quite a bit to learn before you take the plunge and many of them are variable. You need to know your market, occupancy and competitive rent rates, renter expectations, your goals, risk tolerance, temperament, and your resources.

    You need to know your local tax rates, state/local landlord rules, housing authorities, insurance sources, financing options, occupancy and employment trends.

    There are crazy tenants but effective management can minimize the risks.

    Good luck.

  • Specialist · Cleveland, OH · Member since 2011 · 1k+ posts · 852 votes
    14y

    Welcome to the world of investing Tom!!
    My plan is pretty simple. I flip contracts and houses to buy free and clear rentals. I am not one to leverage, I like to keep it simple and sleep well at night. It is not the only way to do it, but it works for me. Good luck!!

  • Residential Real Estate Agent · Delray Beach, FL · Member since 2010 · 115 posts · 83 votes
    14y

    Three things to remember.

    1. Location
    2. Location
    3. Location

    50 cents on the dollar and a great tenant can't hurt!

    LOL!

    Bob

    P.S. Good luck to you and I'm confident you will succeed!

  • Specialist · San Dimas, CA · Member since 2011 · 350 posts · 122 votes
    14y

    Tom,

    Welcome to BP! I think you'll find many of the answers you are looking for right here on the site. I promise you'll get way more accurate information on this site than any book you'll read.

    I too live in Southern California - Pasadena to be exact.

    You are dead on, now is a great time to buy. However, LA still has a way to go as far as values go (more REO inventory is coming). That being said, there are some amazing deals to be had a little outside of the over-priced bubble - central valley, inland empire, riverside, etc.

    I have two pieces of advice for you:

    1.Look/treat RE investing like a business. There a lot of ways to make money some are more active and some are more passive. Try to learn the basics of each business model and closely follow the one that best resonates with your lifestyle and investment goals.

    2. Find people that are successfully doing what you are trying to do and try to network with them. There are plenty here on BP.

    As you develop a better understanding of your strategy, make sure to post your questions on the forums and get involved here at BP.

    I hope this helps.

    AG

  • Murrieta, CA · Member since 2011 · 10 posts · 4 votes
    14y

    Thanks to everyone who has responded.

    Hey Arthur Garcia, I'm in Murrieta (Inland Empire), and the housing market has totally collapsed. Great area...very clean, new and virtually next to no crime. Both of your points are solid advice. In regards to point 1, I'm definitely very conservative and tend to move cautiously with my money, so I'm definitely gonna look at a business model of only buying what I can afford and not overextending myself with credit. In regards to point 2, yeh, I definitely need to meet people in this area I can sit down with and get their insight. Is there a general way to do this on the forum? Connect with others by location?

    Thanks again!

  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    14y

    Tom,

    It's like stock.There are buyers that buy 3 shares every 2 weeks not matter the price and then those that buy much more in the CYCLE that is most advantageous for them to do so.

    I like LEVERAGE.I think LEVERAGE was bad during the boom times because now many are upside down.When interest rates are low now and prices are rock bottom they will not stay that way forever.

    So I would leverage and get as many amazing deals as you can right now and when the cycle starts going up get real picky about what you add from then on to add to your portfolio.

    If you buy right leverage is a great thing.

  • Specialist · San Dimas, CA · Member since 2011 · 350 posts · 122 votes
    14y

    Tom,

    I agree with Joel here - I too love leverage. It sounds scary at first, but once you understand the business and get your first deal under your belt, the process/investment isn't quite that scary.

    I have one property out in the IE and it has been doing really well. I know a few investors in your area that are "cleaning up" right now.

    Send me a PM and I'd be happy to chat or help in anyway I can.

    There are few good RE clubs in your neck of the woods as well. You may also want to do a forum post "officially " introducing yourself. In the introduction mention where you are looking to invest and that you would like to connect with a few people in your market.

    I hope that helps.

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