With your credit score, I am sure you are getting many credit card offers. Accept credit cards from Chase, Discover, Bank of America, or Washington Mutual. These banks will give you higher credit lines then others. Buy things on them but make sure you can pay them off right away. You often get free or 0% balance transfer offers when you open one so keep transferring the balance between cards, then after 6 months ask for a credit line increase. You could have upwards of a $25,000 credit line in just a short period of time. I purchased 3 fixer upper homes last year with my credit cards then refinanced them within 6 months after I fixed them up. I’m expecting to make $25,000-$35,000 per house. In fact the second one this week I just refinanced it with a no cost equity loan which I am using to buy a 4th house. All properties purchased with no out of pocket cash.
How can I realistically get into the real estate business? I have decent credit with a score at about 680. I was thinking about looking into buying a rental property like a duplex, but wasn’t sure if that was the smartest way to go out of the gate. I tried a wholesale deal about a year ago, it would have gone through if I would have gotten it under contract for a lower price. I ended up losing $100 on that whole thing, but I chalk it up to a good learning experience.
Basically I was hoping to get some insight from all of you pros. Are rentals a decent way to start out nowadays? Thank you very much for your time.
A duplex or triplex would be a great way to start, especially if you get it cheap because it needs some cosmetic repairs only. If you have limited resources (i.e. no bucks), take your time and scout around to find a better deal rather than accept one that needs foundation, roof, plumbing, or electrical repairs. When you’re in fix-up mode, really crunch it rather than let it slide and take too long. Lastly, be as precise as you can in your goals; instead of saying, I want to achieve x dollars through real estate, say I want to achieve x dollars doing that subtask that I do best and enjoy the most, whether it’s in real estate or not. R.E. is a good way, but only one way to build capital. If you like the selling part, it may lead you in different directions than if you like carpentry. My two cents…good luck!
Go join your local Real Estate Investors Club. Meet and talk to
SUCESSFUL RE investors.
I never bought system or even went to any seminars. I joined my local
RE club and read everything on this site.
Talked to people in the business. Everyone has to eat. Buy em lunch
and ask em questions.
Become a sponge. At 21 you could position yourself to be retired in
another 15 or 20 years.
Get an EIN number and a business bank account so in two years you
can get business lines. Don’t rack up personal credit cards, this will
destroy your credit and lenders will turn you away.
Look forward to seeing you on the Forbes list kid.
Wish I had started in REI at 21! You can do it with the resources you
have, but you need to educate yourself how to leverage your resources.
Read everything you can get your hands on, try your local library or
buy used books at Amazon. Authors: Bill Bronchick, Mark O.
Haroldson, Robert Allen, Ron LeGrand, Dave Lindahl, Wade Cook (avoid
his stock market stuff), William Nickerson, Albert J. Lowry, Scott Scheel.
You might want to read about the top of the real estate food chain,
commercial real estate investing and developing. Go for it.
I agree with the last two guys. I went from being a tenant to a homeowner/landlord overnight by buying a duplex. Over the years it has become very beneficial with equity and cash flow.
Our first house was a duplex. The rent certainly helped towards the payment. Years later, in hindsight I realize a triplex would have covered our rent, and a fourplex may have had cashflow!
But Chris, the key here is to learn how to effectively screen tenants. Especially if you are going to live in the same building with them.
I would suggest your first transaction to be a property that you actually live in yourself. You’ll be at a serious disadvantage talking to homeowners, if you’ve never owned property yourself.
I would look at purchasing a 2 or 3 unit bldg, and live in one of the units. Try and find something below market value, that may only require a some cosmetic work. You’re living expenses will be very low, so you’ll be able to devote your time and money to your real estate education and pursuits. Just make sure that you can afford the mortgage payments by yourself, without needing the rents to get you through.
Ok, The best way to get started is reading some books. You need to educate yourself as much as possible because you will make mistakes but if you can realize what was done wrong you can get yourself out of it quicker.
Check out the Guru listing and see what is reccomended. I personally like the Jay P. DeCima book. He has some quirky stuff and the numbers are probably out dated but the theory is still sound and could help in formulating a good plan.
If I Recall Correctly PA has high CAP rates. This means subject to existing mortgage, lease/option, wholesaling, high LTV buy and hold and discouraged owner financing are all possible.
Profit = Income - Expenses
One time, recurring or a combination of both types of Income and Expenses are possbile. That’s why Financial Statements have a balance sheet and an income statement.
What’s the best deal you can come up with?
If you don’t have an actual deal what do your think a good deal in your area is realistic?
Give us a trail of breadcrubms to follow Your credit rating seems to leave a good selection of possibilites to be available.
Your credit rating seems to leave a good selection of possibilites to be available.