Posted by REnewbie on March 13, 2006 at 19:13:23:
Thanks John-actually your response to Larry on flipping vs rentals was a help also on the “bigger picture”…
How to get started in RE investing with ~$50k - Posted by REnewbie
Posted by REnewbie on March 13, 2006 at 12:55:28:
Help! I have been looking at franchising opportunities to start my own business. I have roughly 50k cash and would have to finance up to another $130k. I have spent months in due diligence with franchisees, etc. But considering this investment and the return, not to mention my much higher interest in real estate investing, I am wondering what the best way for me to get started in/consider real estate investing. I am an accounting major, have great access to “fix-up” help in the family and love doing it, great credit. However, I have no real estate background. I have owned two of my own houses and have read all the popular books like “flipping properties”, “buy it, fix it, sell it”, etc but I would think finding a mentor would be critical? I basically have start-up capital, have the will to work (80hrs/wk is not unheard of for my current corp career)and am well read-but what is best way to begin to get some “real world” experience and get started applying the reading/sweat equity? Flipping, rentals, combos? I am in the midwest (NE Indiana) in somewhat slow market (as compared by U.S. averages/appreciation figures). I am very familiar with the area. What are some tips to get started or any recommendations of flipping over renting, etc.? Thanks in advance…great website…
Re: How to get started in RE investing with ~$50k - Posted by Bill
Posted by Bill on March 13, 2006 at 13:30:34:
First of all I am new also. I haven’t yet completed my first deal although I am almost there.
I would tell you to flip a couple properties wholesale ( buy and sell right away to another investor for him to fix) or retail( buy-fix-sell) right away before considering the rental game. Rentals may bring you more $$$ over the long haul but I’ve been advised to get a few flips under my belt first before I get into the rentals.
As far as finding a mentor, you need to find a local REI club. On the creonline homepage on the left hand column you’ll see “Real Estate Clubs”. Click on that and then go from there. REI clubs are great places to learn the game and find other investors with properties for sale or investors looking for properties to buy.
Do you have financing yet? $50k is a great place to start but you’ll probably need to get some more to buy fix and sell your first couple places.
Re: How to get started in RE investing with ~$50k - Posted by John Corey
Posted by John Corey on March 13, 2006 at 13:27:27:
RENewbie,
The long thing you are lacking is the will to get off the couch.
Many investors have started with less than you have. If you are reading some of the more well known books you do not need to know much more to start. Having already owned a couple of properties helps a lot.
IN can be a good state for a cash buyer looking to do rehab projects. There could be diamonds in the fields just outside the door.
You do not need a mentor. A mentor may help but you do not need one to start. If you have not attended a local REI meeting then find a local group. Networking with others can be a great ego boast.
Oh, read the success notes and the archives here.
John Corey
Thanks Bill-and more questions - Posted by REnewbie
Posted by REnewbie on March 14, 2006 at 11:43:16:
Thanks Bill-good advice. I know I will have to figure it out with some more due diligence but what kind of financing would you recommend? Like an operating line of credit/home equity on my current home? I am just not sure how much to put into a house to “flip” vs what I will get back out-that was my main question on having a “mentor”. I also assume you would have to buy/sell without a realtor to make good margin. Any good sources for contracts to use? Do you list properties using any FSBO local advertising or just newspapers, etc? Thanks again…