New and getting started with very little money

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New and getting started with very little money

Chris Lounsbury
Real Estate Agent · Rock Hill, SC · Member since 2014 · 86 posts · 46 votes

Hey everyone, just wanted to introduce myself to the BP world with a quick about me and what my plans are.  I was born and raised in Orange County, NY, but am planning on making the move to Southern California in the summer.  (I know that isn't the ideal place to be for investing right now, but I am definitely a dreamer and California has been a dream of mine since the first time I ever visited.)  I recently graduated college, but during my time there it became increasingly clear that I was uninterested in following the beaten path of entering into corporate America and working for the next 40 years.  After gaining experience in multiple endeavors, I realized that my passion had been staring me in the face my entire life.  Since I was about 12 years old, my parents and I slowly tore down and rebuilt our colonial home into a very beautiful new colonial style home.  We did most of the tear down and rebuild ourselves, and I learned a lot about designing and building.  Thinking back on this, I began to look into real estate investing with the idea of getting into house flipping, but after exploring the different niches, I think I'm even more interested in owning rental properties.

My main problem is my desire to get started investing now, but not having the funds to do so.  Currently I am a server/bartender at a restaurant and bring home around 2000 a month.  I actually dont mind working in this field for now, mingling with customers and putting smiles on peoples faces each day, but the money definitely isn't great. I know that I could apply to jobs that would pay me greater and make it easier to begin investing, but at the same time I have told myself countless times that getting a "real job" may slow down my true dreams, and I cant imagine finding a salary job that I would enjoy doing.  I don't want it to distract from my motivation to make money in a different way than the majority of people that have told me to take the "safe route" and find a nice paying job. 

With that being said, I am at a loss of what to do next. I am humbly seeking any advice or encouragement from everyone on this site. I would greatly appreciate any comments on this thread and hope to connect with some like-minded people that are willing to share anything they believe will help my journey into the real estate investment market. Thanks to all who took the time to even read this far, and good luck to everyone on this site in their own endeavors in REI.

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Brandon Hall
CPA · Raleigh, NC · Member since 2013 · 1k+ posts · 2k+ votes
11y

@Chris Lounsbury I feel you man. I was in the same boat, but I like to mitigate risks and keep a laser focus on my end goals.

You need to really analyze the risks and make an informed decision. What happens if your venture fails? What happens when you run out of money? Your reputation will take a hit and you may not be able to recover. 

Being young and having a small amount of money to work with, you need to make calculated, strategic decisions. A salaried job will provide you with a stream of monthly income and open up a lot of doors for you, trust me. And as I already mentioned, you can reap benefits like health and retirement. 

To address your concerns: #1 - why don't you target jobs in the real estate industry? In this way, you will be in the industry you think you will enjoy and you will be gaining relevant experience. #2 - You are right, it is easy to fall into the "employee forever" trap, but it's also easy to avoid it. I literally typed up my 1 year, 5 year, 10 year, and lifetime goals, framed them, and hung them next to my bedroom door. I see them every morning and night and I stay focused on the end game. Even though I work for a large accounting firm right now, ALL of my goals are entrepreneur based as that is the ultimate path I want to take. Additionally, you can "moonlight" which means you work on your start-up after your 9-5, which is what I do. It mitigates risks and helps me test my market in a safe, stable manner. Stay laser focused, build funds to apply to your start up, and you will be fine.

On the other hand, if you do a bit of job searching and it's just not for you, then you need to figure out what your competitive advantage is that you can bring to the real estate game, and build a business around that. What value will you add to a potential client? What do you bring to the table? How can you get in the game and learn quickly? How are you going to garnish trust and quickly build a positive personal brand so that potential clients/investors overlook the fact that you are young?

For me it was my finance and accounting skills. I earned my CPA and now I am building a business primarily servicing real estate investors. I am starting out on the tax planning side and have aggressive plans to move into consulting and valuation services as that's what I really want to do. But I bring to the table services that every investor is in need of. My CPA builds my personal brand and garnishes trust. That's my core competency and that's what I am building my business around. Additionally, every client I have utilizes a different real estate strategy. Assuming I provide excellent services and my clients stick around for a while, I get to see how different real estate strategies play out and which ones end up being the most successful. That information and education is priceless.

A salaried job will help you with your real estate game. It will give you time to learn about different REI areas you can enter, it will allow you to build up savings, and you will have experience to fall back on should your venture fail. If this isn't the path for you, figure out where you can add value and leverage your core competencies, then get in the game and learn fast.

Keep me updated on your decision. I've put too much time into these posts to not know which option you chose!

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  • Account Closed
    Real Estate Investor · San Antonio, TX · Member since 2014 · 785 posts · 190 votes
    11y

    Welcome! Getting started with little cash....sounds familiar! We are in the buy and hold biz where I am (cash) but sometimes you don't have 75k falling out of your pockets, so what to do??

    I have done some flips in my market to make 5-10k per deal in 60-90 days. Not for the rookie to do on his own. You need to have an expert work with you in your chosen market. They are out there and it's doable because I'm no genius and I figured it out ! :)

    I did a flip where I just resold the house as is to another investor and made 6k. That was in December. It is possible. You can probably manage a flip with a few thousand to start off with in some markets. 

    I'm sure others will give you lots of great advice, just my personal experience. Best of luck.

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  • Account Closed
    Real Estate Investor · San Antonio, TX · Member since 2014 · 785 posts · 190 votes
    11y

    I don't know if you're single or what, but if you are, bank as much of that dough as you can so you can save up a few grand to do your first deal. Pretty obvious advice, but many people don't do it!

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  • Brandon Hall
    CPA · Raleigh, NC · Member since 2013 · 1k+ posts · 2k+ votes
    11y

    @Chris Lounsbury 

    You say you don't have the funds but you follow that up with not wanting to get a "real job" even though you also say you could apply to jobs that would yield a higher monthly income.

    I don't get the logic. When you are new to anything, you make sacrifices. In my mind, building substantial wealth is directly tied to increasing your monthly income, hence one of the reasons I invest in real estate. You have an opportunity to utilize your degree and apply to corporate positions which you state will increase your monthly income... so why aren't you doing this? I don't see how that will "slow you down" at all. In fact it will probably accelerate the realization of your goals.

    Work in a corporate position for a year and gain institutional knowledge while you figure out what area of real estate you want to get into. Then at the end of the year, if you have been managing your finances smartly, you will likely have a small nest egg to apply to your real estate ventures.

    A corporate job should not be overlooked. Not only will you likely see a higher salary, you will also be able to take advantage of retirement benefits/matching, health benefits, and corporate discounts. Some people on BP may shun this, but these benefits should not be overlooked. 

    And just to make it clear, I'm all for being an entrepreneur as I am one myself. I'm not saying you can't strike out on your own and start your real estate career right this very minute. But I am saying that a corporate job should not be discounted as it will provide you with start-up capital and give you time to really think about the areas of real estate you want to get into. 

    0Reply
  • Chris Lounsbury
    OP
    Real Estate Agent · Rock Hill, SC · Member since 2014 · 86 posts · 46 votes
    11y

    @Brandon Hall I completely understand your point and I do not disagree that finding a job with a larger salary of course will make it easier to have the money for that first deal.  I guess I didn't describe my dilemma well enough.  1) I don't want to end up working somewhere that I do not enjoy.  I want to wake up everyday that I have work and look forward to that day.  Knowing my own personality, I don't think I would look forward to a desk job.  2) I am afraid that if I do get a job making a decent amount of money, I may fall into that same trap that so many people fall into.  They become complacent and stick with the job security instead of finding ways to do the things that they love.  I know this does not happen to everyone, and I am not bashing corporate America, I just feel as though it is not suited for me.  I do become complacent when things are going ok, so I like the struggle of chasing the dream, it keeps me motivated and on track I guess.   But at the same time, I really feel as though the money would make my dreams of real estate investing more achievable, and so its like a catch-22.  I greatly appreciate your input, and I am actually going to take your advice into consideration and see if there is something that would interest me enough in order to take those steps into real estate.

    0Reply
  • Brandon Hall
    CPA · Raleigh, NC · Member since 2013 · 1k+ posts · 2k+ votes
    11y

    @Chris Lounsbury I feel you man. I was in the same boat, but I like to mitigate risks and keep a laser focus on my end goals.

    You need to really analyze the risks and make an informed decision. What happens if your venture fails? What happens when you run out of money? Your reputation will take a hit and you may not be able to recover. 

    Being young and having a small amount of money to work with, you need to make calculated, strategic decisions. A salaried job will provide you with a stream of monthly income and open up a lot of doors for you, trust me. And as I already mentioned, you can reap benefits like health and retirement. 

    To address your concerns: #1 - why don't you target jobs in the real estate industry? In this way, you will be in the industry you think you will enjoy and you will be gaining relevant experience. #2 - You are right, it is easy to fall into the "employee forever" trap, but it's also easy to avoid it. I literally typed up my 1 year, 5 year, 10 year, and lifetime goals, framed them, and hung them next to my bedroom door. I see them every morning and night and I stay focused on the end game. Even though I work for a large accounting firm right now, ALL of my goals are entrepreneur based as that is the ultimate path I want to take. Additionally, you can "moonlight" which means you work on your start-up after your 9-5, which is what I do. It mitigates risks and helps me test my market in a safe, stable manner. Stay laser focused, build funds to apply to your start up, and you will be fine.

    On the other hand, if you do a bit of job searching and it's just not for you, then you need to figure out what your competitive advantage is that you can bring to the real estate game, and build a business around that. What value will you add to a potential client? What do you bring to the table? How can you get in the game and learn quickly? How are you going to garnish trust and quickly build a positive personal brand so that potential clients/investors overlook the fact that you are young?

    For me it was my finance and accounting skills. I earned my CPA and now I am building a business primarily servicing real estate investors. I am starting out on the tax planning side and have aggressive plans to move into consulting and valuation services as that's what I really want to do. But I bring to the table services that every investor is in need of. My CPA builds my personal brand and garnishes trust. That's my core competency and that's what I am building my business around. Additionally, every client I have utilizes a different real estate strategy. Assuming I provide excellent services and my clients stick around for a while, I get to see how different real estate strategies play out and which ones end up being the most successful. That information and education is priceless.

    A salaried job will help you with your real estate game. It will give you time to learn about different REI areas you can enter, it will allow you to build up savings, and you will have experience to fall back on should your venture fail. If this isn't the path for you, figure out where you can add value and leverage your core competencies, then get in the game and learn fast.

    Keep me updated on your decision. I've put too much time into these posts to not know which option you chose!

    1Reply
  • Edward Synicky
    Rental Property Investor · Yorba Linda, CA · Member since 2012 · 336 posts · 69 votes
    11y

    @Chris Lounsbury 

    Congratulations for joining the most valuable resource on real estate investing ever created. There are many books on investing and you should certainly read all of them. But for up to date information of what actual investors are doing in real time this site is unbeatable. Please ask any member for assistance, you will find every one on this forum willing to help.

    All the best!

    0Reply
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