Beginner and Dont know where to start!!!

[Dev Why]

Hello, I am a beginner in Real estate investing. I am at the stage where I am just reading and learning about which direction I want to go. I think I want to start with multi-family homes and use an FHA loan to get my first property. Is this a good idea? I also have a full time job with about 5 thousand to invest in right now. Please help idk where to start.

[Bill Gulley]

By the basics I really mean real estate functions, economies, legal aspects, market influences and financing.

Can you explain why real estate is valuable? What are the factors that effect value? How is land measured? What does a survey show? How does title transfer to real property? What are the basic elements to a contract? What is the "Statute of Frauds"? What is "sufficient consideration"? What is an "equitable interest"? What is an assignment? What types of deeds are used in real estate? When a deed is made when is it effective? Can you name the classifications of real property, types of properties? What is an equitable interest? What rights are conveyed by title to real estate, what is meant by the "bundle of rights". What rights does a lease convey? Can only certain rights to real estate be conveyed, can you give examples? What is an encumbrance? What is an easement? What is a lien? Can you give 4 examples of a lien? What is meant by "priority of liens"? What is the "due on sale" clause in a mortgage and when may it be invoked? The party that executes a mortgage and creates the obligation is called the ______. Who can allow an assumption of a loan? What is meant by "marketable title"? What does an abstract of title show? What is a title search and how is that different to a title opinion? What aspects of real estate are commonly excluded from title insurance? What are "police powers" with respect to real estate? What type of power of attorney must be used for another to pass title for another in real estate? What is an insured closing agent? In residential conveyances a HUD-1 is used, what is shown? What must there be in commercial transactions that is similar to a HUD-1? What is the ECOA? What two federal agencies oversee regulatory requirements involving residential real estate? What organization oversees real estate closing procedures? When is a Realtor entitled to a commission under a standard listing agreement? What is a "Transactional Broker"? Who is responsible for a real estate closing with respect to agencies, the selling broker or the listing broker? What is an "escrow account"?

I'd say that if you can't get at least 80% of those questions correct, you lack a basic understanding of real estate and shouldn't be on the street trying to do deals. That doesn't even touch financing issues in real estate needed by investors as a buyer!

Guessing, 80 % of the questions on this site stem from the lack of understanding the basics.

If investors were aware of these basics, you could read any guru book one time an get it. You would see what they are proposing, you'd know if it was real or a fluke or a waste of time or even if it were illegal.

As an example, a "sandwich lease" is the oldest concept in real estate, the King granted certain rights, but not ownership, of land to Lords who then in turn leased the property for benefits from the land. There is absolutely NOTHING new in real estate. Knowing the basic means you'll understand how to construct deals on your own. You won't need to spend thousands on strategies from those simply taking advantage of you. You will know if a mentor is full of it or is actually being constructive.

You don't get the basics by jumping into some strategy like wholesaling or doing options. You need to get real educational materials, like Real Estate 101 at a college book store or a test manual for agents from any real estate school.

You learn requirements from real estate organizations that supervise activities, like American Land Title Association, HUD, state statutes involving real estate, look to professional organizations on line of appraisers, loan officers and brokers, Board of Realtors. Investigate your courthouse to see where and how records are kept. I can't believe people pay for leads in their own area!

Trying to "invest" or make a living in real estate without knowing the basics is like a dog chasing its tail. All he knows is that he needs to catch it but doesn't have a clue why or how to get it. If he just laid down he could reach it much easier.

Lastly, there is no short cut in success, in real estate or in any other part of life. Build a good foundation before you start trying to open doors. :)