How can I get into real estate investing?

by Peter Medic
(Sydney)

Can I begin in real estate investing with litttle or no money? Is it advisable to do no money down deals?

Answer

Yes, savy investors can do no money down deals in any market. It appears that you have never owned real property previously. You first need to educate yourself before starting. This way you will avoid making mistakes and lose money if things go wrong.

As an investor you will be dealing with variety of people and issues that will need your attention. You will be dealing with bank and finance companies, Title Companies, your County (taxes and deeds), realtors, lawyers and people who might know more than you do. You will also need to master the basics of legal issues related to real estate,forms, contracts, not to mention building inspectors, etc ...

Your first investment is perhaps the most important investment. You do not have the cushion for things to go wrong.

If I were starting out now in real estate, I would do the following three things first -

1. Educate myself and learn how things are done in my part of the world. Education provides better leverage than financial leverage.

2. Find a good mortgage broker who can look through your financials and advise you as to how much you can borrow to get started with your real estate investing.

3. Once you know your financial position start looking for best deals. Try and buy property below value. This will provide you with equity to to buy your next property. The property you buy must have adequate cash flow from rents to cover your mortgage and expenses. Initially buy for cash flow and you will not go wrong.

Be very conservative in your estimates when you buy your first property. Once you gain confidence you will be able to borrow more and do no money down deals.