What do I need to learn & how to go about Research?

Question

I've been talking about real estate for the past couple years and really want to invest. I don't want to fall in the"analysis paralysis" category but I also don't want to go in blind. Yes, there is some fear. I have financing but zero "know how". I'm willing to do the work but not sure where to start in terms of education and research. Please help.

John Delosreyes · Answer

Welcome, Obed.  What got you hooked on to real estate in the first place?  In other words, what niche/strategy piques your interest? Wholesale, flipping, buy/hold? Also, what size property? Single-family, small multi (up to 4-plex), or large multi?  I think it's important to ID that first so that you are not chasing multiple things at once when you want to land that first deal.

I highly recommend attending The 90 Day Challenge webinar tomorrow.  There will be actionable steps that will pave the way to your first purchase.

Some books to consider reading:

- The Millionaire Real Estate Investor- Long Distance Real Estate Investing- Financial Freedom with Real Estate Investing- Best Ever Apartment Syndication Book (if large multis are your thing)

Podcasts I listen to regularly:

-BiggerPockets-Creating Wealth Real Estate Investing-Best Real Estate Investing Advice Ever-Apartment Building Investing with Michael Blank-The Real Estate Guys Show

Education is the first step.  Be sure to network as well; BP forums are a fantastic start.  Additionally, you can search for REIA events on these forums or on meetup.com.  Good luck on your journey.  I was in your shoes not long ago.  I had been on the forums for a couple years educating myself and analyzing properties (and of course saving for a down payment).  It wasn't until I moved to Oklahoma in January where I took action, networked with a local realtor, lender, PM and closed on my first buy&hold in March.  Once you establish those relationships and go through the purchase process, future deals can be a breeze.  Good luck!

Josh Oaten · Answer

@Obed H. Bey

Here’s my suggestion (how I started). Read and listen to general podcast about real estate like The BiggerPockets podcast to hear about different niches. From here you will find a niche or two that most interests and makes sense to you, then you need to find books and other podcasts about this niche and just listen and read whenever you can!

Once you start getting your head around it, post stuff on BiggerPockets (questions, comments or whatever). People will start responding and when they do follow up with them, get on a call, pick their brain and offer to assist them for free. Eventually someone will bring you on or point you in directions to build your network. Keep following up, networking, posting and helping investors and you will get the practical learning you need!!!

Account Closed · Answer

@Obed H. Bey agree with others on The Best Ever podcast and Syndication book.  Also, the idea of using equity to finance another deal at this point in the market cycle makes me nervous.  Don’t over-leverage and get yourself in trouble.

Obed H. Bey · Answer

Thank you Josue. I appreciate the input. Reading and learning from others is exactly the plan. I'm also seriously considering taking a real estate course to help with the fine details.

Obed H. Bey · Answer

Thank you everyone for your input and advice. This is so awesome! It makes me excited about the journey. Something @barronbrittingham said was very interesting. That using equity in a home makes him nervous. A relative offered to help me with a deal (as long as it made sense). Their help comes in the form of 75k equity from their residence (I also have about 10k cash to use). Is that a bad thing?

Also, I am working on my criteria. So far I know I prefer a duplex, triplex or Quad. I'm married with a baby and we would initially love in one unit. For the next 2-3 years we will be living in the Philadelphia or NJ area close to Trenton (probably not in Trenton). I also believe a higher end unit would be best to attract good renters and also so I feel my family is safe. I also imagine the cash flow potential has better upside.

I also want to take action soon to get that on the job experience that I must learn on my own but realize I need to get educated before I start.

Thank you all again. I've never been more motivated.

Josue Vargas · Answer

Start small, get your feet into the door, learn from others, educate yourself or find someone who is willing to provide good strategies, advises, etc.  When I started, there were no Bigger Pockets or widely known books with lots of tips.  But here I am.  I'm still learning and incorporating many things I have not considered before in my leases, strategies, etc.  Once you have your own project (hold, rehab, whatever) you will learn a lot and you will become good at it by resolving issues.

Oleg Shalumov · Answer

@Obed H. Bey probably the best way to start is househack. If there is way to purchase 4-Plex and live in one unit, that would be the best way to start.

Asa Hunt · Answer

Welcome, Obed. I've been pursuing MF real estate for the past several months and here are the 3 "easiest" ways in to becoming an apartment investor. The best route depends on what you want to do in this field.

1. Investing passively in an apartment deal (syndication) as a limited partner. You find an operator you trust with a good track record, educate yourself enough to vet them and their deal, and trust them with the most common minimum investment amount: $50K. You can generally "expect" 70-110% return on your money over a 5 year period with quarterly cash distributions of 6-10%-ish. You can be an "active" passive and learn a lot about the process this way.

2. Learn to analyze (underwrite) apartment deals and submit them to Michael Blank's Deal Desk program. If you can find an apartment that meets his criteria, he'll raise the money for the deal, cut you a solid finder's fee check, and possibly keep you on the GP side to continue learning. If I could rewind time, I would go this route. http://www.themichaelblank.com/partner/

3. Raise money for other people's deals. This has to be done carefully, but I know of one such group that raises money exclusively and through them you can join the GP side of an apartment deal and make some money too. Their business is structured in a way that complies with the legal requirements to avoid brokering securities without a license.

You can message me for more information if you'd like. Apartments all the way!

But to answer your question, if you want to get in to apartment syndications, this book is a great one stop shop for education:https://www.amazon.com/Best-Ever-Apartment-Syndication-Book/dp/0997454326/ref=asc_df_0997454326/?tag=hyprod-20&linkCode=df0&hvadid=312025907421&hvpos=1o2&hvnetw=g&hvrand=9727541632607955792&hvpone=&hvptwo=&hvqmt=&hvdev=c&hvdvcmdl=&hvlocint=&hvlocphy=9026941&hvtargid=pla-598854978364&psc=1

Chase Louderback · Answer

Hi @Obed H. Bey

John hit the nail on the head that you need to figure out what your niche and acquisition criteria is going to be, then  you can really focus on getting educated.  The catch here is after a couple of months you should be taking action.  It is easy to get caught up in the analysis paralysis or think that "I need to know more."

As for using a HELOC or LOC to get started, the answer is it that people do it and it's completely up to you.  The thing is you should always be considering your downside risk, so when you are looking at an investment consider the worst case scenario.  Would you be ok if the interest rate increased a few % and the rents or vacancy when up a bit at your property?  Consider those things and try to be as careful as possible, especially with current housing prices.

Obed H. Bey · Answer

Thank you John. I appreciate the input. For me it's all about the small complexes to get started. I will be using the equity in another home to get started. Any thoughts on using existing home equity?

What do I need to learn & how to go about Research?

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