Now is the time!

[Jason Kim]

I've been studying many strategies about real estate for about a year now. As I gain more and more knowledge about investing, I feel more confident and comfortable to start now and willing jump in and do some deals around my town this year.
But I want to ask people's opinion on how you would start your real estate investment if you were in my shoes so that I have a broad range of options that would fit me best to my situation.

1. I work full time at my wife's family company and can start to work part time at any time.

2. My wife and I have approx. $30k to invest on real estate.

3. I would like to do more of short term investing like rehab, buy cheap & wholesale or sell to retail?, or maybe buy & hold?

4. I know one real estate investor who buys short sales and sell to retail but not sure how to approach to her and work with her.

5. I know few people who can fund around $50k - $100K to invest but not sure how to approach to them and how to use their money.

6. Wholesaling in short period of time is consider a fraud now so what other methods of investing are good ways to start?

7. Prefer to make deals in good school distric areas and better valued neighbors.

Thank you in advance!

[Jon Holdman]

What are your goals? Wholesaling, fix-and-flipping, and rentals are three very distinct strategies. Of those three, only the last is, IMHO, "investing". The others are real estate businesses. For that matter, the property management aspect of rentals is, too. You do the work, do a good job, and you make money. Stop turning the crank and the money stops. Investing, OTOH, keeps producing the returns as long as you have your money in the investment.

If you're looking for long term income and wealth building, rentals may be the right approach. They don't produce much immediate cash, though. Truly making $100/month would be a pretty good rental, and a lot better than you can do in many places. If you're looking to replace your paycheck, you need a lot of rentals. But if you buy a rental, even just a break even one, and hold it for long enough to pay off the loan, you now have a very large asset. You can continue to rent it, you can 1031 exchange it to a larger one, you can sell it, or you can re-mortgage it and take the cash.

Wholesaling, IMHO, appears to be much harder than the gurus make it out to be. As far as I can tell, it really amounts to real estate brokering. You find a seller, find a buyer, put them together and collect a fee. Yeah, yeah, its dressed up with transactional loans, assignment of contracts, double closings and all that stuff to avoid it actually BEING brokering. But at the end of the day, you're putting a buyer and a seller together and that's brokering. If you want to do that, get a license, sign up with a broker and go to it.

Fix and flipping can produce nice profits. You have to know what you're doing. That means understanding values, finding good deals, managing the rehab and selling quickly. You also need more cash than your $30K. Sounds like you have a couple of sources. You'll have to find a deal, and get these folks to agree to fund it. Find an especially profitable one the first time, since a lot of things can go wrong. Be conservative in your value estimates.

But first, figure out your goals for the investments.