New Member, New to Real Estate, What Do I Do First?

Question

Hi All,

I want to take a second to introduce myself and ask a few questions.  What key actions do you recommend a total newbie in real estate to start with?  What people should I reach out to first?   Where do you find these people?  What books do you recommend?

A bit about me, I graduated from college back in 2013.  I played baseball all four years at George Mason University in Fairfax, Virginia.  I moved to Los Angeles in January 2015 and am an entry level employee.  I lack financial resources, but have a flexible job which gives me a lot of free time to study and read.

I want to get in the real estate game early so I can learn as much as I can.  My goal is to be involved in ONE deal in 2016.

I read all the content on BP, I listen to podcasts, I devour books.  I would appreciate any guidance and a few key action items that I can do to get the ball rolling.

Any help would greatly be appreciated.  I look forward to involving myself further in this community. Cheers!

Jesse Peña · Answer

@Sean Cabrera

Welcome to BigggerPockets! Below are some links to get you started. Much success to you!

I received this info from @Nathan Sharp when I first started.

http://www.biggerpockets.com/renewsblog/2013/01/04/how-to-rent-your-house/(house rental guide)

http://www.biggerpockets.com/renewsblog/2013/02/22/buying-rental-property/(how to buy a rental property)

https://www.biggerpockets.com/renewsblog/2013/11/02/hack-housing-get-paid-live-free/ (House hacking)

https://www.biggerpockets.com/renewsblog/2014/03/13/investing-multifamily-ben-leybovich/ (Podcast 061 - How to succeed in multifamily investing)

https://www.biggerpockets.com/renewsblog/2013/04/09/how-to-buy-a-small-multifamily-property/ (How to buy a small multifamily property)

https://www.biggerpockets.com/renewsblog/2015/11/16/how-to-choose-areas-multifamily-deals/ (Choosing multi-family deals)

http://www.biggerpockets.com/renewsblog/2014/07/19/how-to-buy-a-duplex/(guide to buying a duplex)

https://www.biggerpockets.com/renewsblog/2013/12/12/bp-podcast-048-duplex-managing-tenants-darren-sager/ (Duplex investing)

Now that you have made the move, below are some links that will help with the navigation of the site.

• http://www.biggerpockets.com/starthere
• http://www.biggerpockets.com/meet
• https://www.biggerpockets.com/alerts
• How to Use @Mentions on BiggerPockets
• https://www.biggerpockets.com/rules
• https://www.biggerpockets.com/terms
• https://www.biggerpockets.com/invites
• https://www.biggerpockets.com/perks
• https://www.biggerpockets.com/forums/categories
• https://www.biggerpockets.com/rei/glossary/
• https://www.biggerpockets.com/webinar

https://www.biggerpockets.com/courses/a-beginners-introduction-to-real-estate-investing (video courses)

https://www.biggerpockets.com/real-estate-investing (Ultimate beginner's guide to REI)

Before your 1st purchase, please ensure you visit the below link for some tips.

https://www.biggerpockets.com/renewsblog/2014/12/19/real-estate-investing-success-smart-tips/

REI books suggested by BPers

https://www.biggerpockets.com/renewsblog/2015/11/13/7-real-estate-books-beginner-investors/ (7 absolute must read books for beginner REIs)

http://www.biggerpockets.com/renewsblog/2013/04/14/best-real-estate-books/?utm_source=search&utm_medium=internal&utm_campaign=books (books recommended by BPers)

Simply, expand knowledge in such as, Forums, Marketplace, Learn, Network, Analyze and Resources.

Continue to feast on the BP Podcasts, #askbp Podcasts, BP blogs and BP webinars.

Logan Allec · Answer

@Sean Cabrera, in my opinion, house hacking a 3- or 4-unit property using FHA 3.5%-down financing is in my opinion the best option for a young person looking to get started investing in real estate. It frees up so much cash (if you have it) to invest elsewhere.

One thing to keep in mind when looking for an FHA owner-occupied triplex or fourplex is that 85% (75% in certain states) of the market rents on all the units need to cover your monthly payment (principal, interest, taxes, insurance, and mortgage insurance). This is known as the self-sufficiency rule. It only applies to 3- and 4-unit properties (not SFRs or duplex) bought using FHA financing. I put together a spreadsheet here to help potential house hackers quickly analyze whether or not a property qualifies. There are other FHA requirements concerning which you should contact your local lender, but determining whether or not a triplex or fourplex meets the self-sufficiency rule is a good place to start as this rule will immediately eliminate many properties from your search, especially in expensive markets like ours.

Good luck and reach out to me with any questions!

Account Closed · Answer

Hey Sean! First things first, what kind of real estate would you like to get involved in? Real estate is a vast world and has many different aspects including but not limited to, wholesaling, flips, rentals, etc.

Sean Cabrera · Answer

Brandon, I will be there.  I look forward to learning from you.  Thanks for sharing!

Sean Cabrera · Answer

Great knowing a fellow NOVA resident roams this site!  Thanks for the intel Jessica, I will definitely learn how to evaluate a deal.  I am reading the ABC of Real Estate Investing, and just finished Chapter 8 breaking down how to determine the "real" price of a property.  Just learned NOI, Cap Rate, and the standard expenses associated with a property.  I will put that into practice.  I appreciate it!

Jessica Swingle · Answer

Read read read read read! (Which it sounds like you're already doing).

Online, library, Amazon ~ whatever you can get your hands on. It's the only way to "learn the language" and start connecting the dots.

With a million markets and rei niches out there, it can be overwhelming. The more you expose yourself to different contexts and perspectives, the better off you'll be.

In the end, focus on the basics and go from there.

Assignment #1: Learn how to evaluate a deal.

Happy investing!

Will Pritchett · Answer

I would get out of consumer debt (if you have any) and hustle to start some savings. Dave Ramsey helped me get squared away in that department. I do use debt for investing however (he would be so mad). I house hacked without knowing it and it worked for me.  No money down is possible buy i haven't done it.  FHA financing for a great deal with low down payment then take in some roommates maybe. Just one option. Good luck!

Sean Cabrera · Answer

Thanks Josh, looks like I need to put together a specific criteria.  Ideally, I would like to do rentals.  Something about cash flow really strikes me.

Sean Cabrera · Answer

Logan, thank you for this information!  I am conducting research on my own for an FHA loan, and have been considering looking at house hacking a duplex.  If it makes sense, why not try to go for a triplex or quad?  I am sure the time involved would be relatively the same right?

I will definitely put your spreadsheet to good use, and will reach out if I have any more questions.

Mark Nolan · Answer

@Sean Cabrera

Welcome to Bigger Pockets. Consider sending messages to other members for specific guidance.

New Member, New to Real Estate, What Do I Do First?

Most Popular Reply