Thread: Real Estate Help

I know somewhat mentioned my issue in another thread, but I would like to have a dedicated thread so I won't take over the others.

Like previously stated I am 20 years old and I live with my parents in Knoxville, Tn. I have a job a Dollar General that as of tomorrow the minimum wage goes up to $7.25/hr. I don't make much and I will also be going to college. I stated these things to give you an idea of my background if that happens to influence your comments.

Bottom line is that I want to get into real estate, but I don't have the money and as of right now I don't have the knowledge. My question is what would be the best route to take?

I am speculated getting someone to invest in the property and let me take care of the rest. When the deal is done and I eventually sell the property I would share the profit 50/50. This is might be the solution to the money side. I would like to know if you have a better solution.

As for the property, I am not sure what I should buy. I heard that renting a property takes a lot of time and if that is the case I don't think that would be for me at this moment since I will already be juggling school and work.

An idea that I though of would be to find a REO, possibly fix it up and resell it. I do not know if I would live in it for the time being since I would acquire expense such as food, electricity, etc that I am not paying now since I live with my parents. Again, If you have anything to add or help, it would be appreciated.

To sum it up in a few words:

I am 20 years old, go to college, live with parents and have a low paying job. I want to buy a real estate property, but I don't have the funds or know what property would suite me the best.

If you could set me in the right direct as to how to get funding, finding good deals and getting knowledge on real estate itself that would be terrific.

Another thing I am also mildly concerned with is my age. I feel like I would be taken advantage of since I am new and not mention very young for a real estate investor.

Thanks

Here's a quick idea that will only cost you time and give you a "feel" for what real estate investing is all about - team up with a local investor (someone that advertises "We Buy Houses" or someone from HomeVestors, for example) and offer to be their "bird dog". Have them teach you what types of properties they're looking for (type of property, condition, percent of discount they buy at, etc.) and go find these for them.

A bird dog basically goes around looking for potential deals and sells them to the investor - not quite wholesaling (unless you get the deal under contract - that could be your next step, btw) but it could earn you some cash and help you decide if this is the path you want to pursue.

I honestly don't even know what wholesaling is in terms of RE. This is a really good idea and it should help me alot.

Is "bird dog" a universal term in the RE world? I don't want to just say "hey, can I be your bird dog?" and them have no idea what i'm talking about lol.

Because you don't have experience with house values, estimating repairs, and selling I think it would not be a good idea to actually buy a REO to rehab. There's too much risk.

It's better to make money with real estate while you're learning and before you actually buy a house. You can do that by wholesaling houses.

On one of the posts in the real estate section, there's a free ebook called Real Estate Profits on steroids.

It will teach you how to build a buyers list before you do anything else. Then it will teach you how to understand a contract and finally you'll learn how to find deals that you can flip to people on your buyers list.

I originally wrote the book as an instruction guide for my kids to use when they turned 18.

My son made $7500 on his first deal. He had 8 investors on his buyers list. He followed the instructions in the ebook to find deals and got a contract on a house in a few weeks then sold his contract to one of the buyers.

My daughter made $11,800 on her first wholesale flip.

With both of these deals, they never bought the house, never did any fix up, and never had to come up with any money and didn't have to have any credit to buy.

After you get a buyer's list, you just find an old run down house, get a contract on it, then sell the house ( or the contract) to one of your buyers.

You can make a lot of money fast with wholesaling and avoid all the risks associated with rehabbing.

oh wow. I will definitely check the book out. Making quick cash and learning at the same time is exactly what I need. I'm really excited. Thanks

Originally Posted by maximus20895

Bottom line is that I want to get into real estate, but I don't have the money and as of right now I don't have the knowledge. My question is what would be the best route to take?

Read, learn, read and learn some more. Search through these forums and find the type of real estate that appeals to you most. You said it yourself that you don't have the knowledge. When I was 17 I didn't have the knowledge either. Right now I am 19 and I could write a book on the investments that I have researched for countless hours (minus the hands on experience, which I am acquiring right now ).

You need to take ACTION. That does not mean you need to go jump into a property and go into massive debt when you run into you first problems. It can simply mean heading to your local library reading everything you can get your hands on. Joining local REI clubs and putting together the team you will work with on your first deals.

As MJ, Russ, and many others here have said..."Create a business to solve others needs, and you will never run out of clients."

If you are only in it for the money, you will be out with your head stuck in the sand, and fast. You already know you want to do real estate, so you are essentially solving the "shelter need" for your clientele.

Just figure out what your real estate niche is and then attack it full force.

Many different people here have had huge success with very different strategies, even just in the real estate world.

Find the path that appeals to you most. Enjoy your work. Solve needs. And make millions.

G. Alexander

Keep in mind that there are LOTS of ways to make money in real estate, and given the motivation, you could likely succeed doing many different things.

That said, when deciding which route to take (wholesaling, rehabbing, bird-dogging, landlording, etc), you need to take into account your personality, your strengths, your weaknesses, your time commitment, your financial situation, etc.

As an example, I would never want to wholesale. To be a successful wholesaler, you need to spend quite a bit of time working directly with buyers and sellers. Personally, I don't like dealing with buyers and sellers; I'm not a sales person, and while I love to negotiate, I don't like the "relationship" part of the business. Wholesaling requires a lot of time marketing, selling, and talking to people -- things I want to avoid.

On the other hand, I can flip 15-20 houses a year pretty easily without ever having to deal with a buyer or seller directly. The way I do it, flipping houses is all about running numbers and making quantitative decisions (for the most part). I don't need to do any marketing (I have a full-time real estate agent on-staff), I don't need to do any selling (again, my agent does that), and other than dealing with contractors, I don't need to talk to people. And to avoid having to deal with contractors, I employ a full-time project manager.

So, for me personally, flipping houses is MUCH easier than wholesaling.

Of course, for people who enjoy the relationships, the sales, marketing and legwork required to build a buyers-list and a pool of leads, wholesaling is probably a whole lot of fun.

Just like every other job out there, your personality, skills, and desires are going to play a big role in how you perceive different types of real estate investing. If you pick an avenue that's consistent with what you're good at and enjoy, you'll likely be successful. If you pick an avenue opposite what you are good at and enjoy, you'll likely fail.

So, do some research, learn about the various types of investing, and then pursue something that coincides with who you are and what you want to be doing day-to-day...

when you wholesale you do not spend 3 minutes with your buyers if you handle it right.

when you have a great deal under contract, all you have to do is send out an email to the people on your buyers list and say, house at 123 zaza street for sale for $25,000 - first person to fax in a contract gets it. The door will be unlocked from 12 - 2 today. You leave a contract on the countertop in the kitchen ( if there is one)

Within 30 -60 minutes you usually have a contract on your fax machine.

While others are rehabbing one house ( getting a loan to buy, paying for materials and labor to fix, dealing with contractors, getting permits from the city, legal liability of ownership, finding a retail buyer and hoping their loan does not fall out at the last minute) Turn around from the time you buy until you make a profit is 90 days minimum.

Plus rehabbers have holding costs. They are making payments on a loan every month, have to pay for builders risk insurance up front, and have property taxes

I can flip 4-5 houses in the same time and make just as much or more money with NO loans, NO liability, NO mortgage payments, NO risk. Typical turn around from the time you write a contract until you make a profit is 10 days.

I often make as much or more as a wholesaler than the person who buys the house, fixes it up, and sells to a retail buyer.

AFTER you get experience finding deals, negotiating prices, estimating repairs, finding contractors, then you may want to do a few rehabs for properties you want to keep as rentals -- but if you just want to make money with it then I think wholesaling is the way to go.

Fast cash with NO RISK & NO PAYMENTS is good...especially when you're new.

Well to me it seems like your biggest problem is your lack of knowledge. You need to do some research and educate yourself on this subject a little bit. No RE investor is going to want to take the time to teach you everything from scratch, so your going to have to get yourself up to speed.

Their are a million ways to make money in RE, you need to find an area you like and go with it.

Once your up to speed and know what you want to do, than find a couple of investors and bird dog for them.

For me I love new constrution and rentals. I hate dealing with old houses, and other peoples junk; and I'm not a big fan of the constant selling and bird doging that wholesaling requires. My profit margin on new houses is pretty decent still, in my area I only need to sell 3-4 a year. For me at least I much rather just make a lot of money on a few deals, than a bit on a lot of them.

Maximus,

It appears you are getting barraged with all sorts of ideas and recommendations. I read in your initial post that you are concerned with time - working and going to school full time consume most of your day.

One thing you can do to get more time and get experience is meld must-dos with want-to-dos. Ie. get a job in RE.

There are plenty of avenues to get involved in for RE, and your minimum wage at Dollar General is doing nothing for your end goal of being involved in RE. You can make min wage ANYWHERE, so why not work where the experience will be conducive to your goals.

You want to get into the rental business, go work for a PM.
You want to own/operate apartment buildings, go work for a large complex.
You want to rehab property, go work for a construction or maintenance company.
You want to buy/sell, go work for a real estate office.

You can get in on the ground floor as a landscaper, office manager, gofer, assistant, whatever.

If time is an issue, use it wisely. You only have 50-60 years left in your life, don't waste it doing something you get no value from.

Originally Posted by RealOG

Maximus,

It appears you are getting barraged with all sorts of ideas and recommendations. I read in your initial post that you are concerned with time - working and going to school full time consume most of your day.

One thing you can do to get more time and get experience is meld must-dos with want-to-dos. Ie. get a job in RE.

There are plenty of avenues to get involved in for RE, and your minimum wage at Dollar General is doing nothing for your end goal of being involved in RE. You can make min wage ANYWHERE, so why not work where the experience will be conducive to your goals.

You want to get into the rental business, go work for a PM.
You want to own/operate apartment buildings, go work for a large complex.
You want to rehab property, go work for a construction or maintenance company.
You want to buy/sell, go work for a real estate office.

You can get in on the ground floor as a landscaper, office manager, gofer, assistant, whatever.

If time is an issue, use it wisely. You only have 50-60 years left in your life, don't waste it doing something you get no value from.

Great post Mike ++rep!

...There is a saying out there, "You become what you study--so be careful what you study." This is so true. Find a job/apprenticeship/internship in the field you want to get into--it's by far the best use of your time if you are going to be punching a clock anyhow.

Originally Posted by CashFlowDepot

I often make as much or more as a wholesaler than the person who buys the house, fixes it up, and sells to a retail buyer.

How much do you average per wholesale deal?

How do you find your deals?

I certainly don't disagree that wholesaling can be very easy money, but you have to have the personality to excel at it. Personally, I can't imagine having to negotiate with desperate sellers or having to make phone calls to investors to build my buyers list. These are the sorts of things I hate doing.

On the other hand, I can flip a house without having to talk to a single buyer or seller, and at this point, I only need to spend about 3 hours at the property in total, from purchase to sale. The rest of the time I can spend working on spreadsheets, managing budgets, and building the business. These are the things that I love doing.

There's no "best" way to make money in real estate...there's just easier and harder ways, and that will depend on your resources, skills, and desires.

Sorry for the late reply I have been out of town.

Thanks everyone for the replies, they are all really helpful. What I think I will do for now is to start wholesaling since I do not have any capitol at all.

Then, once I acquire capitol as well as experience I will move on to bigger and better things that require risks, but a bigger reward. Of course, I will make sure it is a part of real estate that I would like.

It is very interesting to know that you can pick what part of real estate you want to get into depending on your personality. To be honest, I really don't like talking to people as I am not a social butterfly by any means, so I think I will find a way to make money via real estate that doesn't involve much talking. Of course, I will probably be more willing to talk to people in terms of real estate as I gain more experience and more confidence.

Again,

Thanks for your replies.

Originally Posted by maximus20895

It is very interesting to know that you can pick what part of real estate you want to get into depending on your personality. To be honest, I really don't like talking to people as I am not a social butterfly by any means, so I think I will find a way to make money via real estate that doesn't involve much talking. Of course, I will probably be more willing to talk to people in terms of real estate as I gain more experience and more confidence.

Even within types of real estate, there are variations that may suit your personality a bit better (or worse)...

For example, wholesaling requires a good bit of interaction with buyers and sellers of property. But, if you don't want to deal with distressed sellers and their problems, one option is to wholesale foreclosure (REO) properties. There are some nuances to doing this that makes it a bit harder than wholesaling regular properties, but the trade-off of not having to deal with sellers may be worth the extra effort and learning curve.

There's nothing more rewarding that helping desperate sellers solve their real estate problem

When someone has a house that they can't sell and you can come up with a win-win solution they will be your biggest fan.

I never negotiate. I just ask the seller, if I can pay you all cash and close next week, what's the least you would take.

I let them tell me what they will take.

Sometimes I ask, is that the best you can do.

If the numbers work, I do the deal. If they don't I just tell them so.

It's that easy.

Very often, I never meet the seller because they are in a different state. So we do everything through email or phone calls. Then I fax or fed ex a contract. It doesn't get much easier than that.

Jackie,

I just finishing reading "RE Profits on Steroids" and I am really exciting to start implementing the tactics in it.

Chances are you will get alot of questions from me since I tent to over prepare and make sure I know 100% of what is going on.

Once again, thanks for this wonderful book and strategy. I just can't wait to get started!