Author Topic: How to get into the real estate business  (Read 2241 times)

grosvenor6

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How to get into the real estate business
« on: November 17, 2015, 08:58:09 AM »
I am currently 20 living at home saving a lot of my paycheck.  I plan on owning my own house with my girlfriend/future wife in about 4-5 years.  I am very interested in rental properties and buying cheap houses and fixing them up.  I currently have about 17k saved up and bases on increases at my job I will hopefully will have around 100k saved up in about 4-5 years.  Any advice on how and when I should start looking into properties?

Bearded Man

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Re: How to get into the real estate business
« Reply #1 on: November 17, 2015, 02:47:01 PM »
I am currently 20 living at home saving a lot of my paycheck.  I plan on owning my own house with my girlfriend/future wife in about 4-5 years.  I am very interested in rental properties and buying cheap houses and fixing them up.  I currently have about 17k saved up and bases on increases at my job I will hopefully will have around 100k saved up in about 4-5 years.  Any advice on how and when I should start looking into properties?

Start looking at them now. Look online, visit them, etc. Not many agents will show you the house without a letter of approval from a lender, but you can still start to learn about the process, areas to buy, how it all works, how to rent them out, etc. Learn about the taxes, contractors, etc. Put up a few fake, recon ads for listings, see how many responses you get. If you get a lot, you priced it right.

Learn about 10-31 exchanges, landlord tenant law, long distance investing, etc. I have been a landlord for about 3 years now and have two rental properties. I'm debating buying another one. It's been lucrative for me, but largely because I bought at the bottom/near bottom and kept buying. Between the low prices, cash and low interest rates, I made it work for me in one of the worst rental markets in the country as far as price to rent ratios. But alas, that makes my area an equity play area, so I feel fortunate to have seen my property values skyrocket over the past five years, while I've been making money on them all the while...

But it's largely because I bought right...
« Last Edit: November 17, 2015, 07:40:32 PM by Bearded Man »

lthenderson

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Re: How to get into the real estate business
« Reply #2 on: November 18, 2015, 04:15:02 PM »
I am currently 20 living at home saving a lot of my paycheck.  I plan on owning my own house with my girlfriend/future wife in about 4-5 years.  I am very interested in rental properties and buying cheap houses and fixing them up.  I currently have about 17k saved up and bases on increases at my job I will hopefully will have around 100k saved up in about 4-5 years.  Any advice on how and when I should start looking into properties?

Ditto on starting now to learn about housing in your area. It takes awhile to get a feel for what prices are reasonable for what areas and for what amenities. Even though I am not in the market for buying a house, I always keep tabs on what houses are selling for in my town so when I am in the market, I won't be going in blind. It really doesn't take all that much time. I probably spend maybe 10 or 15 minutes a week looking at the online sites and real estate ads in the paper.

EAL

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Re: How to get into the real estate business
« Reply #3 on: November 18, 2015, 04:32:07 PM »
It really depends a lot on your area and the cost of homes but in general the best thing you can do is to keep saving.  The first one is probably going to be the hardest.  I started saving for my first rental property at 17 years old.  I bought my first town home at 23 and rented it out while in grad school ( I was living in a different town for college and paying rent while I went to school).  After college, I moved back in to the first home I had purchased and bought another town home in May of this year (25 years old) that we now rent to tenants. We are in the process of buying our next property.  It's three units, a front house and a back house with an upstairs and downstairs apartment.  We will live in the front house, rent out the back two, continue to rent our current rental, and rent out the town house we live in now.  This next move is going to be the best jump we've made property-wise. I would definitely recommend finding a multi-unit property if you can and are willing to live in it. Be aware, depending on how many units, multi-unit properties can be a little different for financing so that'd be a discussion for a mortgage-broker.  Each time, we've saved large amounts of money. Usually, when you purchase an investment property, you will be required to put at least 20% down.  There are ways around this, for instance living in the home for a few years before you rent it out or obtaining a different type of loan.  It is so easy to get discouraged because you have to save so much between each purchase but it is definitely worth it in the long-run.  Just hold fast and keep saving.  Also, like everyone else said, keep an eye on your local real estate market. Even when I know I can't buy a new property at the time, I am always watching the market and very aware of what is available and being built and prices and such.  It's good for you to grow familiar and knowledgeable.

www.mindfulmoneymatters.com

Fishindude

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Re: How to get into the real estate business
« Reply #4 on: November 19, 2015, 08:45:40 AM »
I think a great entry into the real estate business is to purchase a duplex as your first home.
You will learn the whole rental / landlord business, it's right next door so you can keep a good eye on things, and with any kind of luck the rental generates enough income to pay most of your mortgage.

If than goes well, pay it off and start planning your next deal.

CashFlowDiaries

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Re: How to get into the real estate business
« Reply #5 on: November 19, 2015, 10:04:18 AM »
17k is enough for a down payment on a "cheap house" but you have to make sure you can qualify for financing to pay the rest of it.    Once you get preapproved, you can start looking at actual houses you are interested in and scoping out what kind of work needs to be done on it in order to make it rent ready.