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How to Start real estate

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Subject: Career question for you

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James’s Answer

Eli - it is wonderful you want to have a career in real estate. You can get started in real estate is many ways, but here are three main areas that you can get started in with very little investment. You can even get paid for working in an entry level jobs in three areas of real estate:

1) Selling Real Estate - get a job in a realtor office and take your local exam to become a licensed real estate agent. You goal is to learn the business of selling Real Estate.
2) Buying Real Estate - get a job with a local real estate investment or management company that is searching for under-valued investments. Or join a real estate investment club in your area. The goal is to learn how others value and buy properties or buildings.
3) Managing/Improving Real Estate - get a entry level job with construction, refurbishment, contractor or property management companies in your area. Real estate investments will appreciate in only two ways, either as market valuation increases OR if the owner makes investments to change the property into a higher-value class of real estate. Making improvements to increase property valuation using existing cash flow from your property is a great way to grow your portfolio value without growing debt.

James recommends the following next steps:

learn more about how you might like to work in selling properties, buying properties, or improving properties. Once you decide which you like or can do with your funds/skills, then go get that entry level job
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Ivan’s Answer

When you turn 18 buy a duplex and live on one side and get the other side to pay for your mortgage. You will learn a lot if you start there.

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Leanne’s Answer

Hi Eli, I'm not sure if your question was targeted toward getting your license in real estate as a salesperson and selling as such, but I can help to answer that. Each state has it's requirements in terms of the hours of pre-license education that you need prior to taking the real estate exam. Once you take the classes and study, you'll schedule the real estate exam. There is a national portion, as well as the state portion. Once you pass the exam, you'll then apply for your real estate license. Each state is different in the process, so this is just a general answer, but it's usually easier to reach out to a brokerage in your state to guide you through your state's process. Keep one thing in mind, though.... before you apply with a brokerage, do your due diligence and interview multiple brokerages to ensure that you're choosing to with a brokerage that aligns with your values and goals. Best of luck!
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Alex’s Answer

Real estate is a pretty broad topic, so I'll cover a few things here. In real estate, there is real estate investment, brokerage, and financing. Here's a little more on these:

Real Estate Investment - Buying, renting and selling real estate are the basic forms of investment. My wife and I buy single family homes (SFH is the acronym) and rent them out to tenants. This particular real estate investment strategy is referred to as 'buy and hold'. The other primary investment type is 'fix and flip' where you buy a house, fix it up, then sell it for profit. In either case, getting a property at a good price is a key component to success. That's where the brokers come in.

Real Estate Brokerage - Most brokers are real estate agents that have a license and work for a real estate agency. They handle the listing, marketing, showing and selling of properties (for a fee). There are also wholesalers that offer cash for properties, but then turn around and find cash buyers to actually close the deal (they have the selling party sign an 'assignable contract'). I think of real estate agents and wholesalers as middlepersons in the process of buying and selling houses. Doing some googling, my knowledge on this front might be incorrect concerning the 'broker' term, but basically, there are people that connect buyers to sellers. In order to buy houses, you need money. Most people don't have enough in the bank to buy a house with cash, so for that you need financing.

Real Estate Financing - The majority of real estate is financed through the banking system. These are usually traditional loans that are then held in aggregate by large entities (Freddie Mac and Fannie Mae, specifically). There are also commercial loans available through banks to purchase commercial property like office buildings. There is also a segment of real estate financing called 'hard money' lending, where people that have cash lend it for short durations at a high interest rate.

To get into real estate, you'll need to have some sort of strategy. Some people focus on wholesaling. This is a relatively low barrier to entry, as you simply need to understand how to setup an assignable contract and send out mailers to home owners. Another strategy is to acquire and profit off real estate somehow. This could be through purchasing a home using hard money from a wholesaler, fixing it up, then selling it for a profit. Alternatively, you could pursue a more traditional career in real estate, becoming an agent or home inspector.

Hope this helps! Real estate investment is a lot of fun!
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