So Overwhelming for a Newbie....

Commercial Real Estate Investing
13yFollow

So Overwhelming for a Newbie....

Brian Stone
Glen Allen, VA · Member since 2013 · 134 posts · 23 votes

I am such a newb. I understand that I need to purchase a property and to flip it is to buy at a certain price, rehab it, and then sell it at a higher price to make a profit. Wholesaling seems like a good idea, but being a middle man, I don't know anyone, no investors, no buyers, sellers, etc.

If you flip a house, don't you have to pay major taxes on your profits? Should I hire an attorney? I really want to get into this stuff but I feel so overwhelmed, I almost feel like I need someone to hold my hand through my first one.

I have no money at the time to even put down on a property. But then, if I buy a property, and there are no renters for a couple months, I end up eating a couple month's of the mortgage/rent that a renter would normally pay. How do you guys do it???

I'm not gonna cry about it I promise, but man it's frustratingly overwhelming lol

0Reply
11 views

Most Popular Reply

Rob Brewer
Des Moines, IA · Member since 2012 · 11 posts · 2 votes
13y

Hey Brian! Welcome to BP!

I know just how you feel. I'm a newb too....haven't done my first deal yet. There is so much info for real estate investing including these forums that you should read. I recommend attending a local REI club meeting and just start talking to people. I found a local investor that is successful to take me under his wing. Take them to lunch and just talk with them.

In my opinion a mentor will be my best resource to start my investing career.

1Reply
See this reply in the discussion

9 Replies

Jump to latestLatest
  • Rob Brewer
    Des Moines, IA · Member since 2012 · 11 posts · 2 votes
    13y

    Hey Brian! Welcome to BP!

    I know just how you feel. I'm a newb too....haven't done my first deal yet. There is so much info for real estate investing including these forums that you should read. I recommend attending a local REI club meeting and just start talking to people. I found a local investor that is successful to take me under his wing. Take them to lunch and just talk with them.

    In my opinion a mentor will be my best resource to start my investing career.

    1Reply
  • Brian Stone
    OP
    Glen Allen, VA · Member since 2013 · 134 posts · 23 votes
    13y

    Where did you find a mentor? At an REI meeting? I would LOVE to find a mentor. I have so much to learn and would be a great student you know?

    0Reply
  • Ibrahim Hughes
    Real Estate Consultant · Bloomfield, NJ · Member since 2010 · 2k+ posts · 1k+ votes
    13y

    Brian I like Rob Brewer's response. Ask not what an Investor can do for you but what you can do for an Investor :)

    Get out there and network. See how you can become an asset to an Investor/mentor as opposed to a liability (it takes time to mentor someone and often it can be a waste as a newbie will often go through several 'I'm serious, wait no I'm not - I want to hang out with my friends and go clubbing instead' cycles before finally deciding they want to be successful at this - if they ever decide at all. In the meantime the mentor has spent a bunch of hours for nothing.

    But first you have to decide where to start so that you can approach a potential mentor with a game plan. I would first start in the 'Staring Out' forum where you are bound to read posts by new Investors like yourself. Read the experienced advice given. Typically people who are new, inexperienced and have no money typically start out by wholesaling residential homes, not buy and hold.

    Good luck.

    0Reply
  • Robert AdamsBusiness Member
    Real Estate Broker · Henderson, NV · Member since 2009 · 1k+ posts · 373 votes
    13y

    Brian Stone as you talk to people and research more you will begin to come up with an investment strategy. You should write this strategy down. As you learn more, you can fill in your plan with more and more details. As you network, you can begin to fill in the various roles that will be needed to complete the your strategy.

    Once you start writing it down you will see more areas that will require you attention. You will also see where your networking has paid offer by using people you trust for various parts of the deal ex: agents, investors, title companies, inspectors, appraisers, warranty companies, and you may even line up the new buyer with your networking.

    Creating a plan and putting it in writing is a very powerful visual aid. My 2 cents.

    [email protected]702-349-9175
    The Adams Team at Rothwell Gornt Companies4.970 Reviews
    WebsiteView Page
    0Reply
  • John Mireles
    Landlord · San Diego, CA · Member since 2012 · 129 posts · 49 votes
    13y

    My suggestion for someone starting out in the real estate game is buy a house, live in it, fix it up, then sell it when you're ready.

    FHA financing that requires only 3% down is available for owner occupants. That's within reach of most folks. Then, because you're calling it your home, you have more time to fix things up, make mistakes that you can learn from and the opportunity to see the plusses and minuses of your decisions. Another benefit of owner-occupancy is that if you live in the house for two years, you get a pretty sizable tax break.

    When you're ready to move on, you can either sell or rent the previous one depending on your investment goals. Sometimes it's best to keep things simple and give yourself plenty of opportunity to learn.

    1Reply
  • Steven Hamilton IIPro Member
    Accountant, Enrolled Agent · Grayslake, IL · Member since 2011 · 5k+ posts · 2k+ votes
    13y

    Brian Stone,

    Welcome to BiggerPockets.

    I agree with John Mireles: I recommend finding a duplex or roommates and owner occupying a property as you can work on it yourself. Once you're ready to sell you can exclude up to 250k of gain if you're single.

    Even better maybe consider a HUD home. That gives you flexibility and also a place to live as to cut your costs. Roommates can be utilized to save costs. Maybe in the end one of them will want to buy the house from you.

    Steven

    [email protected]224-381-2660
    0Reply
  • Chris DeHaan
    Developer · San Mateo, CA · Member since 2010 · 21 posts · 2 votes
    13y

    Welcome to BiggerPockets! I'm a newbie as well.

    I second Rob Brewer's advice to find and join a local Real Estate Investment (REI) club. The one I joined here in the Bay Area has been a great source of information and contacts. It would be a great place to find a mentor.

    Best of luck!

    0Reply
  • Glenn Espinosa
    Rehabber · Alexandria, VA · Member since 2011 · 446 posts · 171 votes
    13y

    Brian Stone I've been in your position, sometimes I still feel overwhelmed. Real Estate is very vast and there are literally a million ways to make or lose money in real estate.

    Are you in a rush? Slooow down. New investors have to leverage one of the only things they have and thats lots of TIME.

    Take the time to read and educate yourself. My suggestion is to put off finding deals and spending any real money until you've read and read and read. While you're doing that you become more confident, you become conversational regarding topics of real estate. Eventually you'll find networking with people and finding mentors is easier.

    You can make money in any market and don't think for a second that by taking your time right now to educate yourself and build your foundation that you are missing out on a deal. Better to make money when you're ready than to rush things and lose out big time.

    While you're reading and starting to network, start saving money. Re evaluate your situation and see if there is anything you can do to save more. Work on your credit if you have to.

    You will never feel 100% ready to tackle your first deal but by taking it slow at first and developing your knowledge, increasing your network, saving more money, and building your credit (if you have to), you will be in a better position to make your first deal.

    Also, I agree with the FHA strategy if you want to go that route. Hope this helps.

    Glenn

    1Reply
  • Brian Stone
    OP
    Glen Allen, VA · Member since 2013 · 134 posts · 23 votes
    13y

    Glenn Espinosa thank you for that awesome post, and thank you to everyone else that has posted in this thread. very comforting to know it will happen eventually.

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free