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Real Estate Investing: How to Get Started

Congratulations! You recognize that today’s real estate investing opportunities are the best that we have experienced in many years. But real estate appears to be so complicated and risky that you never do your first deal.

Many new real estate investors get stuck at the starting line, and so many others start down the wrong path. How can you avoid the mistakes and risks associated with being a brand new real estate investor?

What Should You Do First?

Getting Started

Don’t get stuck at the starting line.

What should you do first? They make “fixing and flipping” look so easy and profitable on TV, so why not fix and flip a house?

Some guru’s say just take over someone’s payments and do “subject-to” deals. Other guru’s say invest in tax liens, lease options, use hard money lenders, or just buy houses with cash and rent them out.

What about wholesaling? Why do gurus make it so complicated now? New wholesaling terminology comes out every couple weeks. It’s flipping houses, flipping contracts, virtual wholesalingfront flip, back flip, sideways flip, and so on.

I just have to laugh at all the hocus pocus. Wholesaling is…well, just that. Buy low, sell higher. No matter what you call it, that’s what it is. Done the right way, it’s simple, easy, and very low risk.

It Doesn’t Have to Be Complicated – Start with Wholesaling

The good news is that investing in today’s market is very forgiving if you apply some simple concepts and follow some simple steps to minimize your risk.  Instead of starting with complicated transactions that are speculative and risky, why not start creating income by wholesaling houses?

When you wholesale houses, you learn to buy houses directly from sellers, without needing a bank and without needing an agent or broker. You learn to control real estate without owning it.  By controlling it, you gain equitable interest, and you can assign or sell your interest to another real estate investor.

You learn about contracts and about the settlement process, without the risk of attempting a complicated transaction. Wholesaling teaches rookie real estate investors to do some deals, create income, and learn about real estate investing without risk. It’s not complicated when you follow the right roadmap.

Add “Buy and Hold” for Cash Flow and Long-Term Wealth

After you learn to do some wholesale deals and enjoy your success, you will gain the confidence that will lead you to wanting to buy and hold. That is the key to long-term wealth and residual cash flow streams.

The key to buy and hold with minimal risk is buying the right house at the right price without needing a bank and becoming a great property manager.

Your wholesaling transactions will teach you to buy houses directly from the seller with the big discounts that minimize your risk. Once you begin to buy and hold without banks, you can create excellent cash flow while building your net-worth with a portfolio of rentals.

Fix and Flip – For Experience Investors Only

Along the way, you may want to venture into the fix and flip arena. Trust me, this is the riskiest form of short-term investing, and there are a lot of moving parts.

You have to buy the right house, at the right price, get the renovations done, and resell the house for a quick profit. The good news is that this is working great in most markets right now, but you need to follow specific steps to make it work well.

You Need a Roadmap

If you were driving from Boston to San Francisco, you would not venture out without a roadmap and a specific plan. The same is true of your real estate investing plans. Don’t jump in blindly and get off to a bad start. Choose your investments and strategies wisely, create a specific step-by-step plan, then execute it while minimizing risk and maximizing your profit.

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Are you ready to jump in?  It is a great time to start.  Let me know the one thing that’s holding you back by leaving comments for me.

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About the Author...

Jim Ingersoll is a real estate entrepreneur who has bought and sold hundreds of homes. He is the author of Investing Now and Cash Flow Now (both available at Amazon.com), and enjoys speaking and coaching others on how to obtain their financial freedom.

You can visit Jim at http://www.bigmoneyinvestor.com/ and http://www.investingnownetwork.com/

You can find Jim on Facebook and Twitter.

Comments

  1. Ralph says:

    What about lease options where an investor would find a home that is under water but the owners need to sell or get out but cannot sell. And than finding a person or couple that needs to buy a home but cannot get a loan. This is something that I’m strongly considering getting into as a first time RE investor on a part-time basis. From what I have read and studied, typically the RE investor in the middle here is getting an average of $5,000. just for hooking these two parties up. This is called Lease with an option to buy.

    Is this potentially more safe or equally safe vs. wholesaling?

    Thank you,

    Ralph

  2. kKelvin says:

    Two things are holding me back: 1. finances. 2. scepticism.

  3. Bob Cherry says:

    You know, I understand that Mentors want you (me) to have “skin” in the game. The whole reason for getting into this is the lack of skin! I would love to be a student to a Mentor who would be willing to show me how to do a deal and take a share, 75%, of the ‘profit’ as my skin. I have yet to receive any offer such as that.

    • Ralph says:

      Hey Bob,

      That is a great point! I have asked this of several RE Guru’s but no one has every taken my offer. You would think that if you could generate $10,000 on your first deal thanks to the help of an RE Guru that this would be mutually beneficial to both – you learn and get $2,500 and your mentor get’s $7,500. That is more than most RE Investment programs that I have seen and I have seen quite a few.

      Ralph

    • Jim Ingersoll says:

      As a mentor myself, I would not be comfortable taking 75% or any percentage of a deal from a student. There are very affordable alternatives that are available including the one right here at CREonline that is $97 per month.

      http://coaching.creonline.com

      Jim

      • Hi Jim,

        Believe it or not, even $100. per month is tough for people today. I have very little money left over after all the bills and helping my family. Although yours is probably one of the more affordable, if someone like your self could agree to a 75/25 or 50/50 split for the first deal only and than $100 per month, than you just helped a new person to have some cash infusion ($2500 to $5000) that would allow for monthly coaching payments. You could than see the light at the end of the tunnel.

      • Nabeel Haider says:

        I think the problem for most students is that while real estate investment strategies like seller financing or lease options theoretically make sense in a perfect world, it is often much much harder to apply in the real world. Most investing courses and mentoring programs simply throw more theory at you, the mentoring programs are usually nothing more than the college equivalent of having a professor available to answer questions for you as you stumble around in the dark. They call it hand holding, but it is NOT the equivalent to an on-the-job training approach. Going back to the college analogy, how many of us were really competent in our professions straight out of college? The majority of us learn our professions on-the-job with access to real mentors working by our sides from day one. What Ralph is implying is essentially the same concept, mentor via example, most affordable programs do not offer this type of approach, the few that do limit their time and charge fees that are practically mortgages in-themselves. Now really, why don’t mentors walk their students through a couple of their transactions from start to finish? After all, it sounds as if they are doing real estate investment transactions every day of the year. Maybe there too busy making money teaching real estate?

  4. Amaeds says:

    Ditto: My observation exactly.

  5. Icshawn Prayor says:

    I’m very eager to start wholesaling in NYC but im not too sure if it’s legal in this state & if so what steps do I need to take to close on homes without hassle. Thanks

    • Jim Ingersoll says:

      Icshawn

      Yes, you can wholesale in NYC. We have others in our coaching program from Manhattan, Brooklyn, etc.

      Jim

      • Icshawn Prayor says:

        Okay that’s great to hear I’m still a bit skeptical in terms of needing an attorney for the whole transaction or is wholesaling more of a do it yourself kind of thing. I’ve made a tremendous amount of contacts & still haven’t pulled the trigger out of fear of the unknown. I have buyers lined up & sellers alike. This will be my first real estate transaction on my own without any outside assistance & it’s driving me up the wall. Is there anyone here that has conducted sucessful wholesale closings with experience in NYC or NJ that can in anyway assist my over standing of the whole transaction process when it concerns wholesaling properties? I’ve encountered a lot of beating around the bush but no real direct in your face simple step by step information from anyone who truly wishes to help. I believe that it’s because of fear of competition on part of the experienced. Remember when you bless others GOD will bless you in return.

        • Andrew Murabito says:

          I’ve yet to do a deal, but this is my understanding so far. I’ve been studying this for a few weeks and am starting to get a more complete picture. This is what I tell myself: Keep it simple, stupid (KISS). 1.) find (a) motivated seller(s), make an agreement and put it in writing (get in under contract). 2.) Find (an) investor-buyer(s), make an agreement and put it in writing (get it under contract). You now have two contracts – one in your left hand and one in your right. 3.) Find a local title co. and attorney and schedule a ‘simultaneous’ closing with both contracts. 4.) Get handed your middle-man check. There are two different contract templates you will need – one to put it under option from the seller and one to lock in your buyer. I’m pretty sure you can get these types of contracts from the county assessor’s website, or recorder, or some county website, just do your research, it’s free that way. 5.) Don’t be in a hurry, don’t quit your day job, keep reading the material on this website over and over and the picture will get clearer until, lying in bed, you will materialize your entry strategy and investing model. Make it make sense and then do it the way that it makes sense to you. Good luck to everyone here.

  6. Kheam says:

    Im new to real estate investing,but I have invested at least $65,000 on real estate courses and I have followed and studied all courses. I’ve tried calling my so called mentors from Utah to South Carolina from wholesaling,fix and flips,buy and hold anything to get me started. It has been 10 years I’ve only purchased one house and the market went upside down. I ended up losing the house and my marriage as well. I have not given up real estate investing because in my heart I believe I can still achieve my dream. I live in San Diego,CA,English is my second language that is another obstacle I have to overcome. As you can tell by reading my comments. Finding deals in San Diego County is very challenging and competitions are everywhere. I have lost everything and ended up living and sleeping on park benches. I was homeless with no family or friends to turn to.But I still believe only real estate investing is the only wheel to my financial freedom. I got back on my feet and began a truck driving career and was able to reestablish my credits. I really don’t like telling people what I went through because I know there are plenty of people out there that are in worse situation then myself. I really would like someone to guide me and show me to get over this hurdle and close my first deal to give me the confidence that I really need to move forward.

    • Jim Ingersoll says:

      Kheam

      Congratulations on your resolve to succeed. I am sure you will find your road map and that your trials and challenges will be your stepping stones to get there.

      Jim

  7. Marcus says:

    was working full time. i didn’t have much time for this. i am now not working a J O B , have been trying to do this for about 6 weeks, so far it seems to be a lot. i am not afraid of hard work,but have not made any money yet. my wife and i are working hard at this, not sure where we are going wrong.

  8. Mike Nelson says:

    Very well-said, Jim!

  9. Jim Ingersoll says:

    Mike – Front flip, back flip, sideways flip….

    Keep it simple and succeed!

    Jim

  10. I too have invested much money on courses and out of state mentors. It has been frustrating because I’ve found out that it’s a much more competitive business and will be harder than the guru and his salespeople make it out to be. I’ve been doing many of the action steps and learning as much as possible from many sources. I’ve come a long way in three months but know I’ve got far to go. My resolve is strong to make this work, but sometimes I get overwhelmed and confused as to how and when to jump in as I’m now feeling a bit of fear because of how much I’ve spent on education and business set-up. Honestly, this is the first time in my life I’ve ever had trouble sleeping. Jim I’m sure alot of what I’m going through is normal, but can you give me any advice on dealing with this and which way you advise beginners to market in order to find and control more deals in the market today. Just had to vent a little. Thanks

    • Jim Ingersoll says:

      Hi Joe

      Knowing where to start and how to start can be confusing. I personally started with wholesaling and used it to quit my corporate america job.

      Learning to wholesale sets a foundation for a lot of other investing methods.

      Jim

    • Orson says:

      Hello Jim.
      Hang in there . I have been ripped off also. Lost a lot of money.
      Don’t give up. This is something that has to be done.
      My wife don’t want to hear about real estate.
      I have been trying with this from 2001 and I am not about to
      give up now.Some day I would get my first sale.

      God bless.
      Orson

  11. Joanne Lipa says:

    Does this also work for Canadians like me?

    • Jim Ingersoll says:

      Hi Joanne

      There are a ton of Candiens investing, using the methods from the U.S. so I would suspect that it does work there. I would suggest double checking. The process is likely similar, but paperwork is likely different.

      JIm

  12. Jim Ingersoll says:

    Hey Everyone

    Continue reading on this subject with the special report right here on CREonline. Click on it at the top-right of this page or follow this link to download it.

    http://www.creonline.com/special-report.html

    Thanks!
    Jim

  13. Gloria says:

    Hi everyone,

    I hope this message will get to those who will continued to strive and make their dream come true of becoming a real estate investor. I know it got to be an easier way to accomplished your first real estate transaction. I’ve read so many courses myself and still waiting to do my first deal. It seem that people are really busy nowadays and don’t have the time to take someone under their wings. I remember the old saying give a man a fish and he’ll eat for a day, teach a man to fish and he’ll eat for lifetime. Maybe someone who have become successful would pay it forward and help someone along the way.

    God Bless You, and Keep The Faith

    Gloria

  14. anthony says:

    I want to invest in real estate and wholesaling but, I not have money to or the credit so can you help me?

  15. real estate assistant jobs says:

    Hello,
    Great work.Given precise but very relevant information needed in real estate business.I had my real estate business but i am having some of the complications in management side so could you please help me and provide me tips for having better management?

  16. kriskrohan says:

    Investment in real estate market is very profitable.Real estate market has provides lots of different types of properties for investing with a high range of money making opportunities.

  17. Lorna says:

    I just want to say to every newbies, that the day will come that we will all look back and say wow!!!! I maid it, me myself lost a lot of money with different seminars go back and forth from 2004 until now, I decided not to spend anymore money, when you go through mentors they leave you hanging it really hurts, to see that you pay your money and put your trust in someone and they can’t even walk you through to make the first deal. I learn from this not to put my trust in man ,and trust God that will be at my right hand and lead me to the right people I trust God , I believe all newbies should do same.

    Isaiah 41:10 fear thou not for I am with thee, be not dismayed for I am thy God, I will strengthen thee , I will help thee , I will uphold thee with the right hand of my righteousness. May God be with us all newbies, so far cre online seems to be the best online real estate that’s open with different ways of making it happen
    Lorna

  18. Muhammed Bangura says:

    I intend to start a Real Estate Investment in Sierra Leone targeting medium and low income earners with a ready source of income using a unique business strategy but Financiers are so stuck on traditional processes of granting finance. Anyways, thanks so much i have learnt something to make this venture a success.

  19. Andrew Murabito says:

    You guys, you guys. . . please quit with all this “waiting to get my first deal” nonsense – and definitely stop waiting for someone else to take you under their wing and show you step by step how they did it That will never happen. Besides, how they did it was determined in their own time by their own personality. It will probably be totally different for you. Think in terms of simple facts – 1.) Somewhere out there, there is a motivated seller. 2.) Somewhere out there is a motivated investor-buyer. 3.) Take matters into your own hands and use your brain to do some critical thinking on how to put the 2 and 2 together. This is a bake recipe. You will need some cooking ingredients: a buyer, a seller, a title company, an attorney and your own brain power. Start preheating the oven by networking yourself as a wholesaler- somebody here to help, not somebody looking FOR help. Now stick it in the oven. i.e, buy the house (option contract- no obligation), bring your buyer to closing and you have made your deal. Now immediately move on to the next one. P.S. correct me if I’m wrong. I’ve yet to make a deal, but I’ve only been at this for a few weeks and I certainly will not be spending tens of thousands or even thousands of dollars on coaching material. Knowledge is for the taking if you know where to look. This website has tons of it. Best of luck to everyone here. See you at the top.

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