Entering real estate in the current market

[Sian Poteat]

Hello, I am a 3rd year college student. With graduation and the ability to generate capital in the horizon I’ve been gaining as much knowledge as possible concerning real estate investing as that is my long term strategy for wealth. I am growing impatient and would like to step in as I see numerous success stories starting people my age (21) and younger. I understand the current market cycle is unpredictable at the moment and that it likely won’t be corrected by the time I’m financially stable and ready to invest, however that is why I am currently considering wholesaling real estate for the chance to jump start my plan and take action as I can’t help but feel guilty for simply going to school ( I aim to be a medical laboratory scientist and eventually a director). 

Everyday I spend relaxing after work or class I feel is a day wasted if I am not chasing a deal or finding a way to make it work. This is why wholesaling real estate has caught my eye. It has been advertised as a low cost way to break into the real estate market given enough hard work and time however several factors are deterring me from taking action.

1. The current state of the market, as it benefits sellers it’ll be much more difficult to get a deep discount as even motivated sellers seem likely to follow this wave of selling overpriced homes due to low demand.

2. Emotional reservations, even if I can lock down a contract at a deep discount if feel as if I was cheating the seller, they’d be selling their home for much less than others and would probably receive their asking price from a more desperate investor with deeper pockets. Even then they may be unable to buy a new home after selling given the low inventory.

3. Data, I rarely act without knowing everything I can. Becoming a new wholesaler in the virtual market seems like a tall task as without an existing buyers list and mls access I’d be left with out of date information such as that found on Zillow and Redfin. I am not sure of the legitimacy of prop-stream either.

4. Marketing costs, being a broke college student marketing seems like it would quickly drain my funds, even now. I rationalize the situation as this; low supply and high demand > higher saturation of wholesalers and investors vying for deals > less deals or even hits on a good lead. Combined with the fact that I learned speed is a key factor in real estate. Being a student athlete how can my schedule compare with that of a professionals with the data and the funds?

Sorry for the long post, my mind is racing and I honestly can’t wait to jump in. To me real estate is more than a way to build wealth, I have a dream of building something long lasting that can change the lives of those like me. Any advice or insight would be greatly appreciated.

[Jocelyn Kaufman]

I was in your situation not too long ago. I think there is nothing scarier than working your whole life in a 9-5 job until you turn 60 and retire. I will answer each of your concerns in my opinion but I will keep it brief. 

1. The market will always be changing and I personally don't see home prices going down anytime soon in most areas. The sooner you jump in the better assuming you are in a good spot financially.

2. I think it is always important, to be honest, and not try and take advantage of the sellers. If you find good deals and are a good human things will work out in your favor more often than not and people will be more willing to work with you. Think of it as a business when you are offering to buy a house. You want a good deal but you also want a relationship to maybe get more deals from that person in the future. Plus I believe in Karma. 

3. I think a great place to start would be reading "rich dad, poor dad" and listening to podcasts like "the bigger pockets podcast" and "The real estate CPA podcast." Once you learn more it will make more sense. 

4. I am not sure what you mean by this question but I think a great FREE way to start would be finding an agent that can send you an email alert for the area you are interested in. You can start looking for properties at no cost and even if you are not able to buy window shopping is always a great way to learn. 

I hope this helps! Please let me know if you have any other questions I may be able to help you with!

-Jocelyn :)