I received an inspiring email this week from somebody we’ll just call Jack. Jack is a senior in college and already reading up on real estate investing (very nice) and has the passion and motivation to take the next step. He’s asked me for help and doesn’t quite know where to start so I’m going to answer his questions within this blog post.
His email goes as follows:
Hello Mr. Cowgill,
I was looking up some articles this morning and found your’s at American Chronicle, as well as your blog. I answered those questions, and figured out that I was lacking the motivation to get started.
A little about myself: I am graduating senior, set to walk the stage in mid June. I will be getting my BS in business administration, and for the last year and a half, I have been reading up a lot on real estate investing.
I have read a lot of the Donald Trump books (I love his philosophy on life and real estate), and recently I just finished Napoleon Hills “Think and Grow Rich.” I read articles on CRE Online (just found that site to), dealmakerscafe.com (thats how I figured out I was a “fence sitter”), and other websites.
At this point I want to get started, but do not know where to go. I am interested in wholesaling and short sales, but for the last week I have been itching do start, but do not know what step to take first.
Real estate investing is somethings that I am certain I will be passionate about, and somethings that I do desire to accomplish. I would appreciate any and every bite of knowledge and wisdom that you would be willing to give to me.
Now Jack reached out to me since I’m an expert in the field. He’s someone I’d like to help get started and here is my response:
Jack, Thanks for the email. I’m glad you’re getting involved in real estate investing at such a young age. Most of the friends I graduated with didn’t see the big picture or reward of investing in real estate and rightfully so. It doesn’t pay the bills right out the gate and how does one come up with money to buy property?
So with saying that, I will agree — the most difficult hurdle to jump over especially coming straight out of college, is finding a source of financing. I of course don’t know your financial situation nor do you need to tell me but let’s just assume you’re either paying off student loans or have less than $1,000 in the bank (that’s what my situation looked like).
I’m going to give you three answers I think can help you best ranked by difficulty. All of them are correct and work, it’s just up to you to pick one.
Simplest Way (easiest to follow through with but takes longer)
Become more knowledgeable and learn the tricks of using other people’s money to finance your deals. Books such as “Investing in Real Estate with Other People’s Money” by Jack Cummings provide 43 tricks (not all which I agree are for most investors)
Intermediate Way (a little more difficult to accomplish but more powerful)
Find a mentor who’s willing to take you under their wing. This can be a real estate agent, investor, Donald Trump, etc. Someone who’s gone down this road before and knows how to get started. You can find people like this online or in the newspaper advertising “We Buy Houses”. Chances are you won’t be paid at first but there’s no better way to learn.
Aggressive Way (more risky but a quick way to get some financing)
Go directly to your local bank and apply for a business loan. Tell them you’re a real estate investor looking for some capital to start you business. That’s exactly what you’re doing. Starting a business of buying property. Another alternative for a short-term high interest loan is to contact a hard money lender. These guys are great if you want to get a loan for a wholesaling deal or a flip it property.
Jack I hope my answers helped you and I’m interested to hear your feedback. Feel free to ask any further questions since you’re not the only one having trouble getting started. Keep up the hard work and you’ll have your first property in no time!