Newbie Guidance Needed: Wholesales, Flips, Rehab, Rentals, etc???

Question

Okay, I'm sure most have heard this scenario before, and although I'm a little embarrassed to admit this, I attended a "so-called" seminar 6 months ago to learn about real estate investing. I won't even mention how much money that cost me, as well as the late nights pulling my hair out, and chasing people down to do their job that's supposed to be "helping" me...lol....which brings me to the present. I feel I've learned a lot "about" real estate, but still not exactly sure what "area" of real estate I should take for my particular situation. I have very limited capital through credit cards, which I wasn't too crazy about, that I was told was my best option. I just want to be smart in my investments moving forward. I have high credit scores. I currently work from home, but not enough left over at end-of-month to put into my investment business. I've been told that hard money lenders are the way to go, but just skeptical because I've been given sales pitches the last 6 months, instead of training. My goal is to make real estate investing my new career and way of life, to possibly leave my job one day and do it full-time. However, I need to get some capital raised. Given the current situation, what type of real estate (wholesale, flips, rentals, etc.) would you advise someone like me to get into in order to keep snowballing my capital?? I'm not so much concerned about creating a steady income right now, as I live very meager and don't need a lot. I'm more concerned with creating as much money, as aggressively as I can, but in a smart way. Any suggestions/advice?? Thanks in Advance~April

Aigo Pyles · Answer

@April L. Williams Lincoln has a phrase that impacted my life since my young days, quoting: “ You cannot establish security on borrowed money”. I wouldn’t get money from credit cards to invest in anything. I love flipping houses and keeping them rented, but going in high-interest rates to invest is not the way. You said you have great credit, use that in your favor. Buy and hold a property for cash flow. Save some more and buy the next one. The game is not how much you make but how much can you keep. Live frugally and keep the money working for you. Money’s a great slave but a horrible master, you need to make sure you identify a niche and stick to the plan. Takes time to build wealth, but takes minutes to destroy it. And remember if it is too good to be true it ain’t! Poor grammar but a good tip! 😉 good luck.

Steve Rozenberg · Answer

I would suggest first you create your end goal, your destination. What is the reason you are even getting involved in real estate and what is is that you want as a result of it when it is all said and done. Creating your end goal and destination in my opinion is the first and most important step.

Next you need to determine your strategy as to how you are going to achieve your end goal. The strategy can be flipping, wholesaling, Note buying, buy and hold etc.. These are just vehicles to get you to your destination. It may be a combination of different strategies, just like if you are driving to a destination you may quite possibly take different freeways and streets to get you there. What is important is to know that your strategy is going to be different then anyone else because you destination is most likely different than anyone else.

Once you know your strategy then you decide on the tactic, such as what car, bike, motorhome, snow mobile you will use via your strategy to reach your goal. This will most likely be House, condo, apartment, Duplex etc.

This is the last and in my opinion the least important of the 3 things I just explained. If you have the wrong tactic such as snow mobile on the Los Angeles freeway, this is definitely the wrong tactic for that strategy. Same is true with getting the wrong property and then figuring out what you are going to do with that property.

The challenge is that this could actually be taking you further away from you goal when you purchase the wrong house, with the wrong type of money.

My suggestion is learn and educate yourself first, make sure you know very clear what your end goal is and then create the strategy to reach that goal and select what tactic you will use.

Then a lot of these other things you are stressed about will fall into place and not seem as daunting.