New REI trying to learn on my own!

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New REI trying to learn on my own!

Jason Caputo
Grafton, IL · Member since 2017 · 7 posts · 1 vote

Hello Everyone!

There are many things I would like to say to "new investors" that I have learned on my own. First off, don't waste your time on all the so-called "gurus" what they are selling is motivational talk and then they give you nothing once you are in. These people were not good enough to continue investing in real estate so they had to "re-brand" their desperation to take "other people's money. I will get off that soap box. 

I am still in the learning stage and have not done my first deal because of still being in the learning phase. What I have done is read a lot and not off the Internet entirely. I actually did go to the old fashioned library and started reading any Real Estate Book I could get my hands on. I even bought a real estate broker book and read that. I think as new investors we see the dollar signs and walk a dangerous path that could put us in legal trouble when following the so-called real estate gurus. It may take more time; but the best advice I can say is invest that time and money in yourself. When you feel as if you have enough knowledge in your bag, consider a mentor. Someone in your area who can and will give you sound advice. I have a gentleman who is a real estate investor in my area and has agreed to "show me the ropes." Network with people as much as you can in person!

The biggest question you have to ask of those gurus is if they made so much money in real estate? Why are they "selling" you a course on how to invest in real estate? They should be out there investing in real estate. What many new investors do not realize is that real estate investments do require money.  I would love to get to know some of the experienced investors here! Would also be great to hear how you got started? I look forward to meeting people in my local area!

Regards,

Jay

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Todd Dexheimer
Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
8y

@Jason Caputo did you go to college? Many on here went to college and spent $40k+ on school and now are doing real estate investing full time or dreaming of REI. They went to school to learn about a career path, then quit (or want to quit) that career to go into REI. Why is it ok to spend $40k on school, only to stop using what you learned years later, but it's not OK to spend money on REI courses to become successful? For some reason the REI teacher gets a bad name, but the University is the holy grail.

I am self taught, but the road was long and bumpy. Had I taken a guru course or 2 there is a good chance it would have saved me time and likely made me money. Where the guru's get a bad name is they over promise to get you in the course. People go in thinking they will make a ton of money with no effort. They then find out it takes a lot of effort, eventually quit and cuss about the guru, then go out and take another guru course on a different strategy of REI and rinse and repeat. It's the shiny object!

I know BP is not pro guru and I am not trying to sell anyone to take a guru course, but you need to decide what is right for you. I shutter when I hear someone dropped $30k+ on a guru course and hasn't done a deal yet, but then again that person may end up doing hundreds of deals and making the most of it. I think the most important part is know yourself and know what you like about real estate and focus on that. 

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  • Michael S.Pro Member
    Biggerpockets Support · Las Pinas, Metro Manila · Member since 2015 · 7k+ posts · 1k+ votes
    8y

    Welcome to the BP community Jay and all the best on the first deal. 

    BiggerPockets
    1Reply
  • Jason Caputo
    OP
    Grafton, IL · Member since 2017 · 7 posts · 1 vote
    8y

    Thank you Michael! I am definitely getting closer. I have been doing a lot of networking and building a buyers list. Sometimes networking can be exhausting! Although, definitely worth it. It is very similar to building relationships over a period of time. It seems difficult sometimes because when you are new they know it. Definitely a great learning experience as well.

    0Reply
  • Steve Kontos
    Investor · Great Neck, NY · Member since 2016 · 679 posts · 467 votes
    8y

    @Jason Caputo

    While I agree with you on certain points, a few I respectfully do not.  I am a HUGE advocate for Respecting the Business you go into.  What does that mean?  In any business you get involved in, simply reading and even listening to pod casts will not suffice.  In my opinion, going out there and learning the ropes from a successful investor is one very effective and powerful way to dip in.  

    I have been investing (specifically out of state) in buy and holds for a decade now.  My wife and I spent an entire year reading and attending dozens of networking events (literally every other week).  It was through one of those events that I meant one of my mentors and YES I had to pay him to learn which I was perfectly fine with.  

    At the end of the day it's not about the cost of learning that counts, it's the value you get out of it.  I would NEVER take on a newbie in my company if they didn't go through my education first.  This is to insure that we are all on the same page and they are properly equipped mentally.  It's not a "guru" thing or some silly scam, it's too simply Respect the Business and go into something properly rather than because a commercial said to you that you can rich from real estate (which I agree with you is total hog wash).  

    Awesome post and I really wish you nothing but the best!  I look forward to hearing about your first deal.

    0Reply
  • Jason Caputo
    OP
    Grafton, IL · Member since 2017 · 7 posts · 1 vote
    8y

    Steve,

    Thank you for your post. I agree with you about "respecting the business." Of which, I honestly do. My point was merely that some of those "gurus" specifically want your money and do not teach all aspects of real estate. I do not pretend to know it all about real estate, because I don't. With each day, I learn more and that is important to me. I have attended local REIA meetings, and actually have attending seminars on real estate investing. My problem with some of them is that the points you take away are awesome but in the end it is just another way to delve into the pockets of a new investor.

    The mentor I have has been in Real Estate for almost 25 years; albeit he does mostly buy and holds but we have agreed that if I find deals we split the profit with him teaching me the value of what he knows. He has done flips but wants to do more. I have no problem whatsoever paying someone for their knowledge. I believe that real estate does not make one a millionaire over night like some say but in the future it does aid some financial security that many do not have nowadays. 

    When I first started this I thought I must be crazy. The more I learn the more intrigued I become. I am by far not young. But, I truly thank you for your insights. Any insight that I receive is very valuable to me. Be well!

    Jay

    1Reply
  • Todd Dexheimer
    Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
    8y

    @Jason Caputo did you go to college? Many on here went to college and spent $40k+ on school and now are doing real estate investing full time or dreaming of REI. They went to school to learn about a career path, then quit (or want to quit) that career to go into REI. Why is it ok to spend $40k on school, only to stop using what you learned years later, but it's not OK to spend money on REI courses to become successful? For some reason the REI teacher gets a bad name, but the University is the holy grail.

    I am self taught, but the road was long and bumpy. Had I taken a guru course or 2 there is a good chance it would have saved me time and likely made me money. Where the guru's get a bad name is they over promise to get you in the course. People go in thinking they will make a ton of money with no effort. They then find out it takes a lot of effort, eventually quit and cuss about the guru, then go out and take another guru course on a different strategy of REI and rinse and repeat. It's the shiny object!

    I know BP is not pro guru and I am not trying to sell anyone to take a guru course, but you need to decide what is right for you. I shutter when I hear someone dropped $30k+ on a guru course and hasn't done a deal yet, but then again that person may end up doing hundreds of deals and making the most of it. I think the most important part is know yourself and know what you like about real estate and focus on that. 

    2Reply
  • Jason Caputo
    OP
    Grafton, IL · Member since 2017 · 7 posts · 1 vote
    8y

    Hello Todd,

    Yes, I did go to college. I became an RN. After many years in the field (I want to forget what I learned due to the horrible things you see in the medical field) from abuse and beyond. I did invest money in a course and I did take a lot out of it. That was my stepping stone to learning more. The problem I had is that every time I turned around they wanted more money. I learned many facets and even had a 1 on 1 coaching program. Turned out the coach did not seem to know much more than I do. While I do not want to mention the name of the the program I bought because I don't want to bash anyone the information was good but not enough to avoid possible legal issues in real estate. 

    I think the bottom line of it is that the courses can be valuable but the claims of experienced investors helping you along the way is not valuable. I am using some of the information I learned from that course to take the steps to take action. Although, I have found that reading real estate books and real estate broker course books has taught me a lot about local laws and regulations and investing. Although, even with the books I ask my mentor questions. I am definitely not here to "bash" anyone at all. 

    I definitely do not pretend to know it all. I hope that helps clarify for you. I am definitely not a course hopper. 

    Jay

    0Reply
  • Tommy Spijkers
    Dayton, OH · Member since 2017 · 74 posts · 49 votes
    8y

    Welcome Jason, good luck in your REI career!

    Personally I would try to have a more positive outlook. To me you come across very negative in your post. It is pretty much an "introduction" in which you bash guru's for 3 paragraphs. It seems like you paid a guru and were very unhappy with the product/coaching/training, and now want to write of your frustrations. If this is the case I'm sorry you wasted your money. I'm not saying I would pay a guru or they are worth what they ask, but I wouldn't take such a hard line either. When looking at people I want to work with, being positive is one thing that is very important to me. Constructive feedback trying to make things better rather than complain.

    We obviously don't know each other, so I hope I'm misunderstanding the idea behind your introduction. Just wanted to give you my perspective, as you may unintentionally turn off some people who could be a great resource, partner, seller, buyer, etc.

    0Reply
  • Jason Caputo
    OP
    Grafton, IL · Member since 2017 · 7 posts · 1 vote
    8y

    Tommy,

    Thanks for the advice. I am actually a very positive person and in retrospect I do agree with your statement. I look forward to adding value to Bigger Pockets in the future, as well as, gaining value. I am learning that as investors we have to be careful where we invest our money. That was the whole point in my post. There is so much to learn here on Bigger Pockets. I hope that in the future I will also be able to provide value to new investors.  

    Be well,

    Jason

    0Reply
  • Laura Alamery
    Investor and RE Mentor · Miami, FL · Member since 2010 · 560 posts · 219 votes
    8y

    @Jason Caputo

    Hello Jason! I see that you are located in Grafton Illinois. I have lived in St Louis (across the river) for 25 years and I have done most of my real estate investing (so far ...) in St Louis.

    I got started back in 1987, pretty much the same way you are. Reading a lot  of books and then going out there and try it on my own. There were a lot of trial and errors in the beginning, but I made it through and invested successfully, and I still am to this day.

    I think that the benefits of hiring a "true" mentor and real estate investor, are, like a lot of the comments I read on this thread, to expedite your learning curve and also help you avoid a lot of the beginner mistakes and pitfalls that beginning investors do (I have made my share.)

    As far as the question, why "those gurus is if they made so much money in real estate? Why are they "selling" you a course on how to invest in real estate?" - I don't know the answer for most of them, and I wonder myself some times ... :) I can only tell you that in my case, I am still an investor, but I feel like I am giving something back by teaching other people to be an investor the "right way," making it a win-win situation, while keeping integrity and being professional. I have been an investor for 30 years and I spent a lot of money in the business, while making a lot of money. There are also administrative expenses in teaching and of course my time, plus people are more dedicated if they have "skin in the game" (money on the table.)

    At the end, it is a personal choice. You can certainly do it on your own, like I did, or work with someone who is active in the field. Good luck!

    0Reply
  • Erik W.
    Real Estate Investor · Springfield, MO · Member since 2017 · 1k+ posts · 2k+ votes
    8y

    I think the original poster makes a good point to be aware that there are scammers out there.  As with all things in real estate (and in life) we need to do our due diligence.   The difference between why some folks will say it's okay to spend $40K on college vs. $10K on a seminar is that there is a PERCEIVED amount of accreditation with universities and colleges, although one can certainly argue that there is little economic value in some degrees too (example. History of Underwater Basket Weaving).

    My favorite "guru" is the local guy/gal who has been doing it for at least 10 years. They've seen the ups and downs of the local market and have many connections to valuable suppliers and labor pools. Find them at your local REIA. Get into a group and meet a few dozen successful folks. A wise man once told me, "Only take advice from happy, rich investors."

    What I've found is most of the information the gurus provide is available for free.  There are not any "secrets" to real estate investing.  Real estate has been around for thousands of years, so the only thing that might be worthwhile is advice on changing taxes and laws, but those can be found via a competent CPA or attorney who specialized in real estate.  Gurus don't have the time or expertise to stay current usually...too busy selling courses!  

    I like books by John T. Reed (very no non-sense, lots of case studies), The Section 8 Bibles (v. 1 and 2), and Nielsons' "How to Buy and Rehab Foreclosures".  Another good one is David Krulac's "How I Started with Nothing and Made $12 Million in Real Estate."  Some of his numbers are a bit more generous than what I would use for my own calculations (i.e. he considers gross rents totals toward his $12 million vs. I consider net rents), but the strength of his book is he had so many different examples of deals and what worked well, what didn't.  As with any resource, you'll find stuff you like and bypass stuff you don't.

    There may be a guru out there worth the $10K, but my guess is you'll get the best bang for your buck stating off by meeting local investors, reading books, and web searches.

    0Reply
  • Jason Caputo
    OP
    Grafton, IL · Member since 2017 · 7 posts · 1 vote
    8y

    Thank you both for the advice! I would have to agree that learning from people who have over 10 years of experience is definitely worthwhile. I think many new investors live in the paralysis of fear, of doing something wrong. Perhaps that is not everyone's experience but it has been my experience. The biggest thing for me is getting over that fear!

    Regards,

    Jason

    0Reply
  • Tom Echols
    Investor · st louis, MO · Member since 2014 · 57 posts · 26 votes
    8y
    Jason, the best thing I ever did was...just do it. It took me 20 years to muster the courage to jump from my w2 job. And you know what? I only regret not starting 20 years ago. Remember the Carleton Sheets stuff? Still have them. There is absolutely no replacement or better learning tool than just doing it. Seriously. You WILL make mistakes, and you will loose your *** once or twice. That’s called learning and it is absolutely ok. Lick the wounds and move on. There are thousands of ways to make money in RE. Decide on a path you like, then put one foot in front of the other and move forward. Always forward. Do not pause, but no need to race forward either. You just need to move forward, one single step at a time.
    0Reply
  • Jason Caputo
    OP
    Grafton, IL · Member since 2017 · 7 posts · 1 vote
    8y

    Thanks Tom, I just bought my first deal at Auction; it is a foreclosure due to a tax lien. The previous owner removed the kitchen in entirety and some of the landscaping, among some other small items. My mentor and I split the deal, and we bought it for 11,700. ARV is 79,440 right now. The total renovations will cost us $15K. Rental income is 820-900 per month for the house size in this area. My mentor wants to rent it for a year then sell.

    We are in discussions on which avenue to take after the repair. He does buy and holds often and owns of 200 properties in this area. He also discussed wanting to get into flipping. We are having lunch today; hopefully we can talk about his plans, and why he wants to wait a year. Either way, not a bad deal for my first one. He already has a construction team he utilizes. It will be interesting to oversee the renovations myself. I can't say that I am not nervous. But, also excited I stepped over the "fear" factor. 

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