what to do after I've been humbled

Question

So I've  been so diligent in my study of real estate investing for the previous 3 months or so and have wanted to get into real estate since I was 16. However life choices hampered those plans which were not so well laib and now I feel like it'll be nearly impossible.  The more i listen to the podcasts I realize I don't have many options presently. I have about 8000 in debt. Only make 17$ an hour single income with wife and three kids, and only have about 400$ in savings. Its obvious my investment dreams will be put on hold but how do i keep the fire burning? I've made the commitment to change my spending and saving habits. However im worried ill lose hope. I thought wholesaling would be the answer but it seems like I may have been wrong. How were you feeling before making the jump??

Account Closed · Answer

Do you own or rent your current home?  My first thought is to buy your first home.  Can you do an FHA purchase?

Second thought is WOW!!!!  You're making $17 an hour and supporting a wife and three kids.  That's freakin' amazing dude!  You should be proud of that alone and I'm sure your kids and wife are grateful for all the work you're putting in.

Baby steps...pay off the debt, save your cash (payments you were putting toward debt + any future raises/bonuses/overtime worked) and then take over the world.

James Masotti · Answer

*Warning - This will likely be a long post - but like your journey in REI if you can stick it I hope it adds value

I manage a team of over 80 people. I make much more than they do, and I am blown away at their spending habits. Every day they come in with nice cars, fast food, designer brand clothing, newest smart watch, etc. I think you get my point here. On the flip side I buy my clothes at thrift stores, I eat cup of noodles, cereal, and peanut butter and jelly and I nearly own my car (I will have paid it off in 2.5 years because I bought something I could afford and have been making large payments on it as quick as possible. I drive almost 25k miles a year and needed something good and reliable...) I guess what I'm saying is that if you're like many of my employees, stop. Don't try to keep up with the Jones' in this regard, because they actual make fun of me that I save my money to buy houses rather than the "cool" stuff. Most people don't want to make the sacrifices necessary in their life to get the things they want, and will ridicule you for wanting to be different and dare I say better than them. When I say better though I mean it in the sense of not submitting to your condition, but rising against it.

You said you've listened to the BP Podcasts. Keep doing it. I know it took me many months to literally start with Episode one and go the whole way through. With 206 episodes at roughly an hour each you'll be spending a lot of time listening. If you have listened to many of them so far, you'll know that there have been people who with time and dedication and focus have gone from situations worse than yours (i.e. actually broke, jobless, and homeless) to successful in real estate. So in my mind step number one is to know that it's possible. Don't view it as an "investment dream" as you called it. KNOW that it is your eventual reality. If you question your commitment, everyone else will too. Stop saying "If", start saying "when" and then make the transition to "do".

Grant Cardone, Hal Elrod, Tony Robbins - These are the names of authors you should get to know and get to know very well. They're stories and actions will show you what things are made of. Hal Elrod was dead for 6 minutes and couldn't walk. Now he runs ultra marathons and is extraordinarily successful.

Now I can keep going on and on and on, but for the sake of everyone's sanity I'm going to pivot to a new topic now (whether that is really a good thing I will let you decide)

Okay great now that you've gotten all the warm and fuzzy stuff out of the way, you're looking for some more concrete advice, and honestly @Andrew Syrios hit the nail on the head for a lot of the good advice, but I'll add to it.

1) Don't set goals, set achievements. Most people think about goals as something they want and many still associate it with things they never get. I'm not the biggest Dave Ramsey fan, but in your shoes I'd say take a page out of his book and start with $0.50 a day. Can you manage to save $0.50 a day for a week? Don't just say yes, actually do it. Now can you save $0.75 a day for a week? Again don't say yes, actually do it. Now we're going to step things up to the big time and go for $1.00 a day for a week. Does this seem ridiculous to do when you've got big dreams and want to get their fast? Maybe. But again remember if you can't get started who cares what your end goal is. Right now you should be concerned with building habits which will enable your success.

2)  Become a real estate agent. I know this is controversial on the forums, but here's my thought...you'll get paid for your education. The more you can gain access to houses and knock on doors and everything. Maybe you get lucky and you get a couple of listings. Maybe you get even more lucky and you make a few sales. However in the worst case scenario you'll be able to be your own agent for when you buy your first house and that along will save you some money and cover the cost of the agent classes. (Also worth noting, because when am I not being long winded in this post. All instances of the world luck should actually be replaced with words like hustle, grit, massive action etc. I don't believe luck exists, but I do believe if you take enough action that you make your own luck because you, instead of someone else ends up in the right place at the right time. Odds of something awesome happening to you while you sit on your couch reading this forum post, which obviously I hope you're still doing right now, is just about 0. )

3) House hacking/Live in flip. I am sure that you are like most people in the world and that shelter is one of the most if not the most substantial item in your budget (And I certainly hope you actually have a budget, if not make that step 0 because you can't save, let alone invest, money if you don't know where it's going in the first place). The purchasing of a small multi-family to eliminate this big money drain will be the biggest win you can reasonable encounter in the short term. You will instantly start equity building, you will gain experience as a landlord, you will be able to pay down debt faster, you will most likely be required to do much of the work yourself. You can use it as an opportunity to bond with you family as they help you fix things around..all the while you're eliminating your living expenses and getting into real estate. This is how I did my first investment property at age 22. Took me over 18 months to fix that place up. When I moved it I had electricity (which I barely used except to run appliances, and I mean that my monthly bill averaged $30), heat (which again I barely used...nothing that cheap sweatshirts and blankets can't fix if you're just sitting on your computer looking at BP), and running water...and in this regard I literally mean running because I had a 4 foot hole in my dining room ceiling with a plumbing leak and a red Solo cup to catch the drip while I slept on an air mattress on the floor. Doesn't sound very glamorous does it? That's because it wasn't. But ever so slowly I started fixing one thing at a time as I could afford to do it on my own. I learned on You Tube and every where else I could.

Anyway...I'm honestly going to spare you, and everyone else for that matter, from quite literally turning this post into an entire book as I'm hoping you've gotten my gist by now. Taking small achievable steps will go A LONG way to helping you realize your goal, it's just a matter of how much are you and your family willing to do in order to get that goal. I wish you the best of luck and look forward to seeing you more around the site on BP.

Account Closed · Answer

@Jeremy Williams Changing your spending and savings habits, that's a start. But outside of that statement, re-read what you posted and look at all the negativity!  "impossible", "I don't have many options", "only make", "only have" "i'll lose hope". It's good to be realistic about your situation, but to take a step in the right direction will require changing your attitude. "It is possible", "I have options" etc. Stop reinforcing the reasons why you CAN'T and focus on ways you CAN. Like Account Closed stated, baby steps. Maybe a 2nd job to pay off debt faster? Maybe get your RE license to get your foot in the door? What are you willing to do to make it?

..and stay away from wholesaling! https://www.biggerpockets.com/forums/12/topics/380...Good luck to ya man!

Jeff B. · Answer

Failing in expectations is not humiliation - - it's GREAT you understand now before irrevocable damage is done.

Regroup and set smaller goals you CAN reach.  No one runs a marathon w/o training, so start with the 1k, 5k, 10k ...

In REI, the 1k is to evaluate a path to investments and what is entailed in each path.  Don't choose a path because "oh boy, no money is required from me" (if it's too good to be true -- it is).  Choose a path because you understand it, can devote time and effort without sacrificing job or family commitments, and you have the skills/interest to make it work.

The 5k is to understand every step in that path and what you have to do to get thru it.  For example, the flipper needs construction skills or be willing to pay for them.

Start SMART - - not gullible.

Andrew Syrios · Answer

There are a couple of options. The first thing is to see it as one step at a time. Don't worry about getting there all at once. Real estate takes a good long while, enjoy the process.

I would ask yourself if there's anyone you could partner with, or perhaps getting a private loan from for either flipping or holding. You do the work, they provide the capital. Or you could try house hacking. Or even better, if you can save up a little bit of money, try getting approved for an FHA loan. You have to move in, but you can buy up to a fourplex. So if you can afford to buy a fourplex, you live in one unit are rent out the other three. With three kids though, it may be easier to do this with just a duplex. But after about a year (I think) you can move out to the next property. And if you can refinance that FHA loan, you can repeat the process from there. All the while, you will be building up equity and experience.

Jeremy Williams · Answer

Thank you. My negativity has been an issue and I have begun to see the light with  positivity. I do currently rent and am only 20 points from the minimum fha  requirements.  I appreciate the down to earth advice. I think staying active on bp will help me immensely. And I do see part time work or a career with uber in my future. Lol

Account Closed · Answer

At $17 per hour with 5 people to feed and house and clothe there is no way in the world you can save your way to anything. You have to increase your income significantly. Second job, wife gets part time work etc etc. Until you get some stability there, its very hard to invest.

Eric Armstrong · Answer

@Jeremy Williams 1st off, congrats on busting your ass to care for your family. Secondly,  your limited income  will create challenges, but not road blocks, in the real estate game. My suggestion would be to keep your eyes roaming for distressed properties while you are Ubering. Do some research on the props and then share with an expierenced wholesaler or rehabber. This could be an opportunity to make 1k, 2k, 4K or  more extra cash. Not sure what kind of RE meetings there are in Salisbury(check BP or Meet up) but I do know DELREIA meets inches a month in Georgetown. Great place to network and educate. Good luck.

Kristopher Hanks · Answer

@Jeremy Williams The down and dirty answer is, take your lumps and keeping pushing forward. Life is going to dump on you from time to time. The suggestions are already out there. Changing spending habits and focus on saving. My goal in your situation would be, pay off the debt, start saving the necessary down payment, find a deal on a duplex and house hack.

what to do after I've been humbled

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