Reader mail: Beginning real estate investing - How to
I am new to real estate investing. I have to recently set up an LLC to begin my journey in becoming a success. Obviously like most people who start out they have little to no money. I am a carpenter by trade (union)but im finding it very frustrating in taking the next step to becoming a
success. If you could provide me with some general information or perhaps words of encouragement it would be greatly appreciated. Thanks in advance.LM Says: Christopher, thanks for contacting me. I would probably need to know what specifically you are having difficulty with to see if I can help.
Without knowing more the first thing I would recommend would be education, education, education. There is no faster way to loose money in real estate than by not knowing what you are doing.
Once you educate yourself some then the next most important thing to do is to set some goals and create a plan to achieve them . I have met too many people investing in real estate to make money but I can tell you that is not enough. You need some solid goals and a plan in order to, like you say, define success and reach it.
If you want to get an idea of how you can get started you can look at my own example and see if that helps you out.
That is by no way the only way to do it. The great thing about real estate is that there is more than one way to skin a cat.
You say you have no money, but I will tell you that is not a stopping point, that is just one
obstacle (of many) that you will have to overcome. I'll be honest and tell you that not having money makes things harder but by no means impossible, and one of the things you will have to work on will be finding money. First determine how much you realistically need and then how to find it.
In real estate unlike the stock market, you can control a $100,000 asset with as little as $3,500 and possibly $0. Plus you say you are a carpenter so I am sure you can do some repair work, therefore saving you money.
An example would be finding a house for yourself. Lets say, you find yourself a great foreclosure deal, buy it for, say, $50,000. Since you are buying it to occupy it you can get a loan from FHA for it for as little as 3.5% down ($1,750). You fix it up and live in it for the next 1-2 years. You want to find something where the cost of repairs is something you can handle. Then sell it in 1-2 years for $130,000+. That could net you anywhere from $20,000-$40,000+ profit. You can then reinvest that profit into another investment. See how it can work?
That is just an example but a realistic one since I run into those deals frequently. There are many other ways of doing it and your "homework" would be to find out what those are given your circumstances. Please come back and let us know how it goes.
If you have this question I know other ones will so I will post it on the site for the benefit of others. I will remove your full name and email address.