How do I get started in real estate, from scratch?

Derek S: How do I get started in real estate, from scratch?
My landlord, who owed the house I lived where I rented a room, does part time real estate and I got some ideas, like renting or buying a 2/3/4-bedroom apartment and renting out the rooms and then have growth by renting out other apartments and so forth. What’s the money like in this and how can I get started? If you’re knowledgeable and open-minded about this profession, that would really help.

Answers and Views:

Answer by RICHARD S
learn to sell scratch

Answer by Puddinhead
Well, it sounds like you should pick up as many tips as you can from your lanlord.

Right now isn’t the best time to get into the Biz tho…

Answer by Ray G
Well Real Estate for most people is like owning a travel agency. They do it on the side of their real jobs because it doenst make a ton of money, you dont have to be qualified to get into the business, and they generally have a little bit of extra initial capital to burn to get started. I assume you are talking about becoming a land lord yourself and not being a realestate agent and just selling homes, so going off of that assumption basically you are going to have to have a pretty decent ammount of capital to put down to buy something to rent out. The key is to put as much down as possible (20% minimum) on a home or apartment complex so that the mortgage you get isnt as much, and the interest wont be as bad if you put the 20% down. I’ve heard that a good rule of thumb is that most rental properties make around 8% profit per renter. So you figure after the renters basically help you pay the monthly payments on the mortgage, you have to charge them that plus 8% (or so i’ve heard). So depending on the size of the rental property, it is not going to be really lucrative unless you have a large number of rentals with low overhead cost, and consistant tenants that dont trash the rentals and pay their rent on time.

Answer by Venice Girl
Well, first, you can’t rent out other apartments in a builiding where you only rent yourself, you would have to own it. So, you would need to buy a rental unit, just as you would any private home. That means you need to be approved for a loan and be able to put down, usually, at least, 10% of the purchase price. Qualifying for a loan and saving the down payment is always the difficult part, but if you can do it, you’ve got a huge majority of it dealt with. Keep in mind, that unless you intend on being a real slumlord, you will have ongoing regular monthly maintenance and repair issues to deal with. You will have to repair things that are not only your responsibility, but also that are the renters’ responsibilities. If your renter caused a problem with a unit, such as a flood or a fire, you would be responsible for repairs, but then you would have to sue them for reimbursement. You would need insurance, not only for general reasons, but for these specific reasons as well. You are responsible to take care of every corner and problem in the building and keep it up to code and pass city, county and state inspections. You have to hire managers and repairmen and landscape maintenance workers, etc. You will be responsible for paying at least some of the utilities, and those monthly bills are going to be huge! A lot of work. Owning a rental unit is not the cakewalk it appears to be. You don’t just sit back and watch the money roll in, but if you are willing to invest a lot of money, time and energy into this, you can make some money. One rental is not going to make you a whole lot of money. The more rentals, the more money. Figure that even a small rental unit is going to cost probably easily $ 1 million dollars. 10% is $ 100,000. Once you’re close to saving your down payment, seek out a real estate agent who specializes in commercial rental property. They will be able to show you buildings in your price range and size that you’re interested in. Once you find a building and have your down, then you apply for approval of the amount you need to borrow. Once approved, you apply for the loan, pay your down and you own a building. It’s a complicated process, but this is the simple explanation.

Answer by Brenda M
Are you considering becoming a Real Estate Agent or are you wanting to buy properties to rent or repair and then sell? If you want to buy properties to rent and manage, then you don’t actually have to have a real estate license. But, being a prior real estate agent, I would say it wouldn’t hurt to take the course and get your afilliate broker’s license because it is very informative and it doesn’t take a very long time to obtain this license.And obviously, you would have the advantage of having this education…it would help tremendously. Now, of course there are other things to consider but first, find a real estate school or a college near where you live that offers the course. I’m sure that it differs from state to state, but where I live, the tuition cost me around $ 550.00 and that included my books. I was working a full time job so I attended class two or three nights a week for 3 hrs. each night(at a local community college) and this lasted for approx. 3 months. Then after I felt ready to take the exam that the class prepares you for, I think it cost somewhere around 75 dollars to take it and you have several hours to complete it. It’s mostly multiple choice and you take it on a computer in most places. Most places will tell you immediately if you passed the exam and then you send a certain amount of money to the Real Estate Commission in the state where you live. (you’ll know all about this from class). And when you do this then you can start practicing real estate…listing, showing, selling properties. Depending on the company that you choose to work with(you will be self-employeed), you might pay this company so and so much a month to rent a desk space in their office and some company’s do this differently…so I’d check around where you live and see what the typical procedure is. You will have monthly and yearly fees such as insurance, dues, fees to be a member of multiple listing services…again, you will learn all about this in school. It is definitely something that most people would reccomend that you have another job for a dependable income, because in real-estate, you are working for commission and you don’t get paid till a closing takes place..sometimes can be weeks or months in between. So until you get established, I’d definitely plan accordingly on money for the first year or so to live on. The whole commision doesn’t go to you. if it is your list, your sale, then you will split the commission with your broker…diff. companies do it different(some 50/50, some 60/40. etc.) and if there are other agents involved, then the commission keeps getting broken down so that each agent and each company involved in the sale gets their part. I know this is a very long answer and I hope it doesn’t sound negative…there are many very successful real estate agents. It’s just something that requires much more time and money to stay in than most people realize unless they have been there. There are other fees and dues that I probably left out. Also, some places offer the realty course like a crash course. There is a place here in the state where I live that you can go for 2 weeks , 8 hrs a day and finish the course! i just opted for the other because I thought it would be hard for me personally to learn so much in such a short amount of time. And when you get started, your broker and other agents are there to help you…they don’t expect you to know everything right off the bat. It’s one of those professions that you can really do well if you really apply yourself. The most successful agents and brokers I know live,eat and breath real estate…so to speak. I hope this helps you and I do apologize for such a long answer..just so much more to it…which I’m sure your landlord can fill you in on. Good luck to you and if you decide to do this, then I hope that you become very successful!

Answer by bcauble1
Wow man it seems like you got a lot of negetive feedback and a lot of don’t do this junk. Or it’s a bad market out there. Thats a load….I sold two this year and did just fine. It’s all about how you buy the home and the way you go about it. You never buy an investment property unless your buying it .25 cents – .45 cents on the dollar. It’s just a safe bet. This way even if the market bubbles you are still good.

That being said I only buy forclosures and believe me there are plenty of them out there too. This is where you find your deals. Your local tax office will have them listed within and it will have the sale date on the home as well.

Now if you choose to stand on the court house steps and bid you will need a line of credit and some know how. You must know the market you are buying in and make sure not to pay more for it than its worth but you should have plenty of time to do the research before sale time. Just pick the ones you like go see them personally decide what its worth to you and how much you think it will cost to fix it up and go for it.

I started with 10000 dollars on credit cards. I also never put one in my name I was always able to talk the seller into leaving it there name with some type of benefit for doing so.

So now I have told you the BARE basics on how to do it with money and with very little the rest has to be learned on your own with a little trial and error..be careful and watch out for second mortgages and owner financed homes. Good luck I hope this helps buddy.

Answer by danauito
Feel free to give this free getting started E-Book a read: !1-s.pdf