Posted by Shawn J. Dostie on July 26, 2003 at 10:54:49:
You can find most of the information here for free. But, if you prefer a step by step manual, there are several courses available. My recommendations are by Bronchick, Lonnie Scruggs, Joe Kaiser, and John Locke… and of course Carleton Sheets. I have included an article I wrote about starting out.
Good Luck!
The most common question asked in the Real Estate arena is, how do I start? I?ll attempt to answer that with a question. If you wanted to take a road trip to Alaska, starting in Miami Beach and wanted to stop in Atlanta, Raleigh, Knoxville, Memphis, Paris (Ky), Peoria, Minneapolis, Helena, Saskatchewan, the Yukon, and finally Juneau, what would be your first step?
Hopefully you said a map, or I?ve wasted 2.75 minutes of one fingered keyboard tapping. Real estate is very similar in that you can?t get to where you want to be if you don?t have a roadmap.
First, you need to set concrete goals of where you want to go and the exact steps necessary to get there. If you have a full time job and like it, you may be interested in the time honored traditional method of buy, rent and hold till you
die strategy. There are many ways to acquire income-producing properties. Some require good credit and cash, others don?t. Start doing your homework.
If you want to, have the know how, and the time, money or credit, you may be interested in buying beat up properties and rehabbing and profiting on the finished product. Unless you live in the property, or have the means to carry the costs of a property and it?s rehab, it is more difficult to start in rehabbing.
If you have the sales acumen, you might want to start in lease options, and subject to. These perhaps take the least amount of cash and credit to work with. However I caution you, There are times when you better have a cushion, like when three properties stop performing at the same time (tenants miss a payment)
Maybe you have cash and want passive income without the headache. Learn about buying and selling paper, and start investing in notes.
Maybe you want huge yields on your investment. Learn how to buy Mobile homes in Parks, turn around and sell them on Land Contract or Contract for Deed and see 1000% yields.
Maybe you are interested in buying tax liens. Learn all about them. Buy Liens that guarantee you at the worst 16% interest.
The next step is education. People spend tens of thousands of dollars for their BA in psychology or communications and then squawk at a course that can change your life if it is over forty bucks. Folks, you say you want to be a millionaire. Do you really expect to get what you need for forty bucks? If you are lucky, maybe, but don?t be afraid to invest in yourself. Does that mean to pay $6,000.00 for a phone mentorship? In my opinion, and strictly for me, no! I don?t learn well that way. You have to decide what works for you. But if you are the type of person that blooms under the careful tutelage of an experienced mentor, then by all means do so. Just make sure you understand who is going to be teaching you, and their specific expertise matches your goals.
If you have issues with your credit, work on it. You didn?t destroy your credit overnight, and it takes a while to rebuild. But if you don?t start now, where will you be in ten years? How do you go about rebuilding your credit? Start by paying your past due accounts and your present obligations. This is by no means glamorous, but over time you will feel better about yourself, and so will your creditors. Guess what, those creditors love to lend money to those who have proven that they can pay their promissory notes AS AGREED. Yes, you should even pay those pesky collections. Somewhere, you signed your name to a promise to pay type of agreement. It is a direct reflection upon your character whether you pay or not. Next, if you have to, deposit funds to a local bank (the smaller the better), and borrow against that amount. Over time you can build your credibility to that specific lending institution.
Now that you have the direction in which you want to go, and the education that specifically tells you how to get there, it?s time to start your engine and put it into gear. This is where the rubber meets the road. It is easy to get analysis paralysis. It is easy to say I need to learn a little bit more. When you first rode a bike, did you start out on a big hill with a 16speed titanium alloy $3,000.00 racing machine? Would you have been successful if you had? Just like you started on a little American Flyer with training wheels, don?t try to start with a 100 unit apartment building that is currently run by drug lords (needs a little rehab), with no money down, $150,000.00 cash back at closing, and interest only payments for 16 years. Start by all means but start with something that if and when you make a mistake, isn?t going to financially crucify you. Don?t put off starting, whatever your current status. You can always do things to improve your position, which improves your odds on the sweeter deals. If you are credit and cash poor, please realize that unless you are incredibly lucky, you will have a tough time getting that tremendous deal where there is only one caveat, the seller wants all cash by next Tuesday. However if you do a Lease Option on a house that you subsequently move into, and get yourself closer to having equity and credit, you will be in a better position when the next deal comes by.
As you get financially stronger and credit worthy and have a little more jingle in your pocket, you can be the one giving out advice to the newcomers. Again, I ask you, if you do nothing more than what you have done in he past and what you are doing today, where will you be in 2,3,5,10 years.
I wish you all well on your journey through this life.
Shawn J Dostie
Coshocton, Ohio