8 answers
Asked Viewed 303 times Translate

How to purchase my first real estate investment?

I’ve worked as an entrepreneur since I was 17 years old #business while also working on and off at odd jobs. #business #entrepreneur #finance #networking #business-management #investing #realestate


+25 Karma if successful
From: You
To: Friend
Subject: Career question for you
10
100% of 7 Pros

8 answers


Updated Translate

Andrew’s Answer

There are a number of ways this can be achieved.

Financing: You would need some solid credit or collateral.

Building Up Cash: You essentially need to save money for a cash purchase.


Now if you want specifics steps on how to achieve these things that becomes a more complex conversation. Especially when it comes to the specific numbers and strategy.

Andrew recommends the following next steps:

You first need to put together a plan (Dollar amount)
Then figure out how much work for how long to get to that amount.
Next I would recommend going to Real Estate events here in Houston and holding some conversations. You'll learn a lot of things from some of the people you meet there.
Execute.

Thanks so much for your response, this info was extremely helpful because now I know where to begin. Thanks a bunch!! Kevin E.

0
Updated Translate

Amanda’s Answer

Dear Kevin, I am so excited for you.

Investment properties are always good to have in your portfolio. Here are some items/steps to consider:
-Is this a good time to buy? Do you mind buying at high or low times?
-What area do you want to buy? Have you studied the area (i.e. crime rates, school ratings etc) and that will help you understand the marketability of it.
-What type of property do you want to buy? Multifamily, single family etc. I suggest ones without HOA fees because they keep going up.
-What is the age range you want to buy? Older homes have more maintenance and younger homes don't but maybe more costly. Do you prefer or mind already having a tenant at the place you buy?
-Get a preapproved loan so you know what price range you can buy. Remember that is based on gross income so be sure after you factor in taxes and insurance etc that you can still afford it. Be conservative and assume some months if there is no tenant rent that you can still afford to pay the place.
- Do you have at least 25-30% down payment funds you can use to pay the down payment?
-Will you property manage the place on your own or hire one? If so there are fees/charges to consider. Century 21 is a big firm and they provide that service but there are many others too
-Get a real estate agent

These are some things to get started.

Best wishes.

0
Updated Translate

brian’s Answer

I love real estate but will also point out that there are more passive (easier) ways to invest in real estate that require much less work: as a limited partner in a partnership if you know and trust the general partner and they have a strong track record or even buying stock in a publicly listed real estate investment trust (REIT).

0
Updated Translate

Mike’s Answer

Many first time investors begin investing in single family homes since they are generally less expensive than multifamily assets such as apartment complexes. Without steady full time income and credit, qualifying for a mortgage will be difficult. Many new investors go to family and friends to borrow money for the purchase, or to co-sign on the loan. If that’s not an option you could bring in a partner to provide the funds for the down payment, closing costs, rehab costs, etc. You can offer them an ownership percentage in the asset, or a predetermined return on their investment when you refinance or sell the property. Make sure you have a contract that spells out all the details.

A good place to begin is with a duplex, triplex or quadplex. Even though these are multi-unit properties, they are still considered single family (up to 5 units). If you don’t already own a primary home you could obtain an FHA loan to finance the asset but you must live in the property for a specified period of time. Usually 6 months to 1 year. In essence you live for free while the additional units pay the mortgage on the property. After you meet the length of time required to satisfy the loan, you can rent your unit out for additional income. If there was any appreciation you can then refinance the loan, pull cash-out and use it to purchase another property. Technically, you can only use this method one time through FHA. The beauty is the down payment on this “owner occupied” unit is only 3% compared to purchasing it as an investment property or second home where the down payment is 20%. Good luck.



0
Updated Translate

Brad’s Answer

Great advice from many others on this topic!

** I would reiterate the importance of getting your financials in order and finding a specific target area to focus. Being prepared financially and having an understanding of value/deals will allow you to move quickly when an opportunity surfaces.

**There are also many great books and podcasts on this topic. Dive into these resources, read/listen to what other investors are doing and looking for. This is a great opportunity to learn from some of their mistakes!

**Finally- a primary residence can be a great first investment. Start small, add sweat equity, and there can be advantages with capital gains..



0
Updated Translate

Puneet’s Answer

Hi Kevin - Real estate investments can be very rewarded provided you understand the risks. There is lots of greet advice in the answers on this page. Most important is you do the research and understand where you want to invest. Here is a great article that goes in to the details of different types of investments. I hope this helps and good luck.


https://www.investopedia.com/mortgage/real-estate-investing-guide/


0
Updated Translate

Megan’s Answer

Great answers here! I would also add to reach out to a loan officer. They'll be able to tell you about different loan types you may qualify for, the loan amount you could be approved for based on your current income, a sense of how much money you would want to have for a down payment, etc.

Further, do your research! Once you know what area/kind of home you're looking for keep an eye on the market. Get a sense for what's a 'good deal'/ what comparable units sell so you're able to act quickly and confidently if the time and opportunity is right for you. This also means you can be an informed negotiator and avoid overpaying!

0
Updated Translate

Adam’s Answer

I would recommend looking into fundrise.com. It will give you the opportunity to invest in larger real estate platforms without the need for large sums of cash. The fees are low and it gives the ability to select a investment strategy that fits your personality.

0