Starting Out In Real Estate Investing
Posted by admin | Posted in Realtor | Posted on 04-07-2010
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If you’ve been thinking about beginning real estate investing for awhile, but haven’t made any actionable steps toward making the first start, you’re not alone.
It can seem daunting at first, but try and learn from others. Joining a real estate investment club is a good idea. You can find plenty by searching the internet.
There are many people who would like to get started in real estate investing but keep putting it off for one reason or another. Some people are intimidated by the thought of getting involved with something as obscure as real estate.
Most people only purchase one house during their entire lifetime and even this is being generous. There are some people who never purchase real estate. It is likely that this is the kind of thinking that causes you to procrastinate beginning real estate investing.
If you want to make progress towards your goal of beginning real estate investing, you must first put aside everything that is hindering you from making the first step.
The first thing you need to do is figure out what has been keeping you from beginning real estate investing. Once you know this underlying reason, then you can begin taking steps to become more comfortable with beginning real estate investing. There are some obstacles that are common among new investors.
Lack of training and understanding is one thing that might be keeping you from beginning real estate investing. If you feel like you don’t understand the world of real estate investing well enough to make a start, then you can take steps to familiarize yourself with the components you do not understand.
There are a number of resources available to provide you with the information you need for beginning real estate investing. You can purchase books, use the internet, or attend a training event to get more information about real estate investing.
Another reason that many people are afraid to take the first step in beginning real estate investing is because they feel they do not have the cash necessary to get started. One thing that you should understand before beginning real estate investing is that there are many ways you can get started in real estate investing without having any money.
In fact, many experienced investors will tell you that you should never have to put any of your money into a deal. There are many creative real estate investing techniques you can use so you never have to come up with cash yourself. Conduct research on some of these techniques to learn more.
One way of beginning real estate investing without much risk is to first work as a birddog. Essentially, a birddog is someone who informs other real estate investors about investing deals. The investor then pays the birddog a referral fee once the deal has closed. Being a birddog gives you experience with locating investing deals. Once you are comfortable with locating deals, then you can begin closing the deal yourself.
Beginning real estate investing is not as easy as it first may seem. There are a lot of details that make many new investors weary of getting involved. If you first figure out the aspects of investing that cause you to be fearful, then work on settling those issues, it will make beginning real estate investing easier.
Watch the video related to real estate
Coldwell Banker Real Estate LLC did a survey on the real estate differences between men and women. This video takes the survey to the streets to get live reactions from both genders.
Help answer the question about real estate
How do you start a real estate holding company and a real estate development company, can I combine the 2?I am 14 and when I get older I would like to start a real estate holding company LLC and a real estate development company LLC. How much money would I need to start one? With the real estate holding company do I get capital gains? Also I would like it to be publicly traded. So what is the best way to go about doing this?
I think you should wait until you are able to be more aware of what is happening in that state you want to invest in. It's kind of like being blind to what's going on if you can't be there for a while. I think you should wait. The market will always have a favorable time again to buy if it changes.
If you want to do this deal, first learn how to do tax lien/tax deeds in your county. If you check it out thoroughly and it is a great deal, you would put it under a purchase contract that allows assignment. If you don't know all of the details of a tax lien/tax deed in your area, you may not be getting what you think you are. Then you have to find an end buyer who wants it, and assign the contract to them for a fee. (Or you could purchase it outright and then sell to the end buyer, but then you need to get the money to close unless you can find a title company that will do a simultaneous closing.
Get educated and good luck!
Bitch! You sprayed my weave!
Sonia Can’t fight for anything for real!
go burn in hell
I have a few answers to that questions. One good way to start out in real estate investing is to get your real estate sales license and pick up a part time job as a real estate agent. You can still keep your day job, and it's a great way to learn the real estate business from the inside and to find good deals before they hit the market.
Another good way to start out in the business is to buy a two-family home (half of which you would occupy), or even a single family with a room you can rent out. Instantly you're a landlord and you can start learning how to be a property manager. You need to learn this well if you're going to be a successful real estate investor.
As for partners, it all depends on the individual you partner with. If you wind up with a good one, they are wonderful. If you wind up with a bad one, they are a nightmare. Partnerships are like marriages, and like marriages, there are more bad ones that end in divorce than their are good ones. If you can do it on your own, that's the safer path. At the least, make sure you sign a pre-nup!
Isnt it funny how us blacks are so Hard working ( well SOME of us) and others make it seem like were so low class. It’s so annoying.
Trash like you smell worst than a dirty pussy!
Flipping or renting depends on your long term goals. If you are in for a quick, dangerous, profit, then flipping would be the way to go. If you are more interested in possibly retiring early with a good cash flow throughout your retirement, I would buy to rent.
When you research an apartment building to rent out (duplex/triplex/quadplex or a multiunit building), just be sure that your income will be higher than your expense, and you will be safe. It sounds easy, and it really is. Example? Sure!
Lets say you pay 100k for a quadplex on which tenants pay electric and gas.
100k mortgage would be roughly $1400 a month including taxes and insurance. (Try to get them included and then you don't have to worry about it!)
Put aside a set amount each month in a seperate account for repairs if you need them. Lets go with $150 for this example.
Lets say each tenant uses $40 in water a month, so your expenses would be easy:
$1400 mortgage
$150 repairs
$160 water
_____________
$1710 in expenses
So each unit would have to pay $427.5 a month for you to break even. If you can charge more than that (say $600 a month?) then the extra is profit in your pocket.
When you do your planing on what you can afford, try to keep in mind that all units might not be rented all the time. For my apartments, since they are in a college town, I figure everything with 3 months of vacancy a year on each apartment.
If you are okay on money at the moment, but want to retire early, get mortgages for like 20 or 25 years instead of 30, and pay over your payment every month. If you pay just $100 over on your principle every month, you can pay your loan off up to 10 years earlier.
To purchase properties, I have had great luck buying on contract. For roughly 10% down, I have had owners finance me for up to 5 years before I had to get a commercial mortgage. All the improvements I've made to apartment buildings have come from that repair fund I mentioned earlier.
Flipping is more work when it comes to research. You have to find where to get the money, find out how much (exactly) the repairs are going to cost you, and how much the home will sell for. The first house I put a purchase offer in on to flip had 2 months of planning behind it.
Good luck.
Patience and Perseverance.
BUILD your credit rating, SAVE for down payment. You need 3.5-5% down for most purchases. 0% down are a very BAD idea and gone now. If you buy property as investment, you need MUCH higher down payment and pay a higher rate. So start with a twoflat that you will live in, build up equity and buy another property later.
First thing you need is a plan. You ask a lot of good questions, and as Eddie G said, a real estate book may be your best bet. Once you are done with that, meet with an financial planner and an accountant. This way you have a better idea of what is your strategy and what direction you want to go in.
Are you looking at long term residual income? If so are you looking at Commercial, residential, land opportunities, easement options? Do you want to flip properties for short term capital growth? Do you want to start off on your own home and growth from there? Know the tax advantages of all as well as exit strategies.
You can go to your own bank for a loan, but you probably want to work with a lender that knows what they are doing and can help direct you. You also want to make sure you get the best rate/service for the price. Banks have less options then mortgage lenders.
Down payment depends on what you buy: Land and commercial can be difficult to impossible to get now: the were requiring about 30-50% down. Residential properties that are rental require a larger % down then residential that is owner occupied. Owner occupied can be al low as 3.5% for FHA loans (be prepared for closing costs so up to 5%), or for conventional loans where you don't have to pay for PMI (private mortgage insurance) it is usally 20% but can be 25% is you live in an area that is considered trending down.
As you can see, from the few questions I answered, you have a lot of options. Read some more and make your plan.
Good luck!
Wow..these are some pretty erroneous answers!! Well, I guess you really have to be careful when reading the answers on Yahoo…:)
First off…the best and easiest deals are in the preforeclosure process, where you contact the seller directly. The individual that stated that "REO'S" or bank owned properties were the best deals was absolutely incorrect. Second of all, by buying the house directly from the seller, you're helping that individual by giving them cash to get out of their situation. The above answers are suggesting that you wait until the person gets kicked to the curb with no money and then give the bank money for it??? Oh ya..that's really considerate..:)
I prefer door knocking when it comes to individuals in foreclosure. Most of the time you won't get them on the phone because they screen their calls, expecting you to be a bill collector and there's a good portion of them where you won't have their phone number.
Plus, door knocking can honestly be pretty fun!
Here's what you do when you get to the door:
YOU: Hi, My name is …… I noticed that you were experiencing a challenge with XYZ Bank. Have you been able to get it taken care of? [NEVER SAY PROBLEM...NEVER SAY FORECLOSURE...NEVER SAY AUCTION or REPO]
Here's where they'll either spill the beans and tell u everything about their life OR Say "oh yes…ya, that's taken care of."
If they tell you everything, get as much info out of them as you can, but don't go out of your way to close the deal right there. BUILD RAPPORT! Get their trust…tell them that you may be able to help them…and keep asking questions…"When's the auction date"…"Are you working right now"…"Do you have any kind of game plan".."Have you considered selling it?"…"Have you spoken with the bank"….
If they get defensive, hit them with:
YOU: Oh, I'm so glad to hear that. You know, it's weird I was just down at the court house speaking with [Insert name of Judge's assistant] and she said that the bank was still pursuing your file and that I should stop by to talk to you. Do you think that their may be some kind of mistake?
[Then Shut Up] Let them speak
YOU: Let me do this…I'm going back down that way today, lemme get your phone number real quick and I'll double check for you. I'll give you a call when I'm down there. [ I say "Mistake" because you don't want to call them out and say "You just lied to me..:)"...Also, don't ASK for the #...Tell them to give it to you. After all, you're doing them a favor]
Now that you have their number, you've built Rapport –the person trusts you…and you have their permission to call them making you different from the other clowns that are just cold calling them. Call them back and say, yeah, "The bank is being really ridiculous on this one. They want to move forward…..and move into your pitch."
At that you point you're going to be the one that gets the deal.
Most government grants are in blighted areas where they want to spur rehabilitation of neighborhood properties. As far as I know there are no federal grants avalable unless you are revitalizing a property which will end up on the national register of historic properties, but these would have little to no profit potential due to the high cost of rehab to get the property to standards. The local programs generally only give 5-20k for help in rehabbing homes, but unfortunately come with so many strings attached that you will be begging them to take their money back just so you can get them out of your hair. Once you invite them in, you many times lose the grandfather clauses on any number of code requirements that have been put in place since the particular home was built and you have to spend as much if not more than the grant money to get the place up to the government standards that they require in exchange for the grant.
In my honest opinion, better to just get your own loan and go it alone….
fuck u
Right on tina
Buy a duplex, live in half of it and rent out the other half and let them pay for your mortgage for you. Once you've built some equity in the property, borrow against it to purchase another property and move in there and rent out the other half of the duplex to help cover the cost of your next mortgage.
U R A FUKIN DIK TECATO666