Hi, I'm new to the forums.

I am a Business / Real Estate Finance Major at Portland State Universtiy. I am serious about getting into Real Estate. I am optimistic, willing to take risks, and am excited to learn everything I can about real estate.

My questions are:

What field should I go into? Apprasil? Intern at an agency? I want to work for myself or with partners, but I'm willing to start wherever I have too. What factors should I consider when picking a field?

As far as my first investment, From what I've heard residential homes are the best place to start for a begining investor, is this true?

Recomended readings? I've been reading every book/magazine/newspaper article I can, is there any "Must reads" out there?

Thanks in advance.

whats your thoughts of being an investor, agent(commercial or residential), loan officer, etc?

are you looking to get a license?

here's 1000 articles ive collected within 2 years since i started real estate. most of the stuff in this zip file are non traditional strategies that will help you think outside the box.

www.preferredvalleyhomes.com/Articles.zip

im currently learning how to do commercial real estate right now so if you want to get started with me, ask a few questions on that forum and we can help educate each other on our learning curve.
since youre a finance major, you might be comfortable learning how to do commercial since it deals with cashflow analysis, creative financing, and other math formulas.

others will say to start off residential since it might be easier and less risky. if youre a risk taker why not aim high to begin with? would you invest in 5 single family rental properties or 1 individual apartment with 5 units?

Seth,
I would suggest a duplex or possibly a 4-plex for a first investment property. Pick up a copy of Quicken Rental Property Manager to manage the property.

You need to decide between Commercial and Residental. Talk to several top commercial and residential agents in your area. Ask then what they like about the business. If you want to intern then contact a brokerage that has both a Residentail and Commercial department and tell then you are not sure which you will like better and want to learn about both.

Wow, This is the first forum I have ever posted at as a new poster and not been flamed. Thanks for the warm response, it is much appriciated.

As for where I want to start:

My first Investment:

I have a credit score above 700 (I have been carefully watching it), and about 10k as a down payment to start. So I can't go too large. So I just assumed residential would be the most practicle place to get my foot into the door.

As for a Job in the real estate field:


I'm interested in learning every aspect of real estate, including being able to appraise, agent, loan officer, residiential, commercial, ect. Is this the wrong approach? Should I begin focusing on a specific area such as getting an appraisel license?

Thanks for the reply's and I will look into that book, and start reading those articles.

hey seth,
with $10k, you can put $4k as max contribution into a self directed roth IRA and use this investment asset for options or downpayments. you can also use this asset to buy beneficial interest in a trust or memberships from another investment LLC.

your $4k will be secured by real estate based assets and your returns will be tax free.

sorry if i got too technical on ya. lol

read those articles.
before buying into a property(acquisition), make sure you know of an exit strategy within your contracts and seller negotiations. subject to financing, inspections, appraisals, title, property liens, etc. you will also need to know whether you want to do this as a long term or short term investment. are you a wholesaler or retailer? you also will need to think of exit strategies when you want to get rid of the property(disposition). you can either do a traditional sale with a Realtor and pay their commissions, sell fsbo, or you can be a bank and do owner financing such as wraps, lease options/purchase, contract for deed, straight lease, etc. make sure you understand the pitfalls when using these techniques. understand your flooring costs such as maintenance, repairs, monthly payments, marketing expenses, taxes, utilities, insurance. factor in realtor and mortgage commissions, closing costs, capital gains tax, tax reassessments, low ball offers, etc. try to negotiate some equity into the property to build a cushion for reserves. you want to make your profits buying into the property - not when you sell. dont count on appreciation.
try to acquire the property with little to no money invested. dont buy at retail prices and get stuck with holding the bag. lol. investors usually buy at a discount. if you think you've found a deal, tie up the property with a contract and look for a partner. dont be afraid to walk away if you have doubts or if you cant sleep at night.

I have about 5k in a seperate Roth IRA. This money I will not be touching. The 10k right now is in a fidelety mutual fund, which is liquid with a 3 day notice.

*****beneficial interest in a trust or memberships from another investment LLC.****

What do you mean by this? LLC means?

The value of negotiation seems to be big in real estate. What is the harm of tossing low ball offers at different sellers? Is there a reputation aspect to the trade where you wouldn't want to be labeled as a bottom feeder?

lets say i find a property for $100,000 and place the property into a equity title holding revocable land trust, i can sell you 25% beneficial interest in this trust in exchange for your $5000 roth IRA. i have 75% beneficial interest. lets say the property is worth $125,000 after 5 months and the property were to be sold or refinanced. we then split that $25,000 accordingly to our percentages. so if your initial contribution to the trust was $5000 roth IRA for 25% interest, your tax free return is $6,250.

LLC is a limited liability corporation

youll get alot of sellers who think youre an idiot, or they'll laugh at you. you have to remain unemotional with the end results. who cares if you throw low ball offers. they dont know you and why would you care if they say "no"? its a numbers game when youre doing shotgun offers. if you throw multiple low ball offers to realtors, theyre definately not going to take you seriously. youre gonna have to do these with private motivated sellers.

Alright I gotcha.

why is that $6,250 tax free? If I dump my profit back into a down payment for another property is the money taxable? I know tax is a beast all on it's own, but approximatly what rates would I be taxed after cashing as a begining investor? I plan on re-investing everything I make into more real estate if that matters. Can you defer the taxes by doing that?

im not a CPA but consult with him/her and your IRA custodian before you invest with your roth IRA. they can help determine where you can and cannot invest.

the $6250 is tax free because thats how self-directed roth IRA's work. your roth IRA should now be worth $11,250 which can be used again to purchase property. you cant cash out on the profits you've made on your roth IRA not unless you want to pay high tax penalties. there's UBIT restrictions in terms of self dealing if you use your own IRA's with personal investments. your investments must be at arms length transactions meaning you can't invest with your spouse or direct family. cousins, aunts, uncles, friends are acceptable.

you pay taxes when you make intial contributions to your roth IRA. remember youre getting taxed on the "seed" not the "crop." when you use the roth IRA for investments, any profit returns you get are tax free.

if you want to defer taxes, you can use a 1031 exchange. thats another story.

I never knew I could use my roth IRA as a down to invest. That's a good idea. While were talking, Do you have any tips on building up my credit so I can get the kind of loans I need to make these deals?

I have 1 6k loan I've paid off thus far. I also have one credit card, and I'm working on another. I've never been late on a payment for bills/rent/credit cards anything.

Any tips would be great, you have been more then helpful thus far alvin.

thanks a lot.

Seth,

Hello and welcome! I would have to agree with Paul. A multi-family property would be the safest way to enter the investor market.

I would also suggest narrowing your field aspirations. I would not recommend brokering, appraising, investing, loans, etc...all under one hat, too many conflicts of interests. It doesn't hurt to learn about each aspect to round your knowledge of the industry, but you don't want to be a Jack of All Trades and a Master of none.

Getting a sales license to form a foundation of the Real Estate laws in your state is a good idea. But I would then spend my time researching, talking to others and really narrow down where your interests are.

Investing... is great, high returns.
Appraisal... a lot of work, but interesting
Residential sales... too much work if you ask me
Commercial sales... high returns

Everyone has a different opinion and different interests. Do a bit of research and you'll soon learn in which area of real estate your interests are drawn to.

You've already learned something helpful...this forum and it's many members have a lot to share.

Best of luck!

More amazing advice, thank you so much.

Investing is eventually where I want to be, but how does one initually make the money to invest?

I have a feeling I am going to have to go to work for a firm at first to earn the money I'm going to need to go out on my own.

I don't mean to ask thousands of questions, but I have one thing I need clarified. When you say "Multi-family dwelling", are you refering to Apartments, duplexes, or both?

anything within 1-4 units such as duplex, triplex and fourplex are under residential

5+ units such as apartments are commercial

I'm referring to 4-plexes as a sound starter investment. They will typically cash flow better than 2/3 units. However, you'll need some money for that. And once you go above 4 units, as Alvin mentioned, you're dealing in commercial property and the loan terms change (more money needed).

I would suggest if you want to get a piece of real estate with little/no money, join a local real estate investor group in your area and seek out a mentor that deals in creative real estate. Be careful that you deal with someone who has experience and a track record and who follows the law.

There are creative real estate methods that can help you pick up some property for little to no money. But before you can do that, you'll want to learn as much as you can.

A great place to start is going to your favorite online search engire and type in "creative real estate". Don't spend any money. No need to purchase expensive courses at this point. But the internet has a ton of free information available.

Also, check out these other investor forums. Some of them have extensive topics on creative real estate investing. Who knows, you may even find a mentor there.

www.dealmakerscafe.com
www.thecreativeinvestor.com

Cheers!