Dire Situation 4 Newbie: Any suggestions on how to begin?

[Markus80]

Hi everyone,

I am a newbie; I wish to become a member, but I am not sure if it is feasible at this time.
I am motivated to begin my real estate investor career, but I am in a sticky situation. My current situation is as follows:

--I know a private mortgage broker
--I know one person who might give me a private mortgage
--I am unemployed (very little to no income)
--I am in credit card and student loan debt up to $29,500, with $34,500 credit available
--I have roughly $5400 in the bank
--My monthly expenses are roughly $500 (including debt payments)
--My credit rating is good (nearer to excellent)
--I live in Penticton (near Kelowna) which is not the best location
--I have a limited network of like-minded people
--I have no vehicle

I know it looks bad

. Does anyone know a method to get started, or should I find another career and be patient until the financial statement looks better? Any advice appreciated. Thanks!

----------------------------------
SUNSHINE follows REIN

 

[Jack]

QUOTE I know it looks bad . Does anyone know a method to get started, or should I find another career and be patient until the financial statement looks better? Any advice appreciated. Thanks!Where to start...

-You have no income. How could you possibly expect someone to give you a mortgage? And, on that note, how do you finance your $500 monthly expenses? With unused credit card balances? Yikes!

-You have credit card and student loan debt of about $30,000. Paying these down will offer a much better yield than basically any real estate investment you can find, especially in today`s world. Check the interest rate on your credit card and ask yourself if you think you can earn a better annually compounded yield with a real estate investment. Good luck.

-How can your credit rating be "excellent" if you have no income and $30K of debt? You might want to check that again.

Are you still in school? If so, finish it, or don`t, but before you start investing in real estate, you`ll definitely need some sort of income stream (read: a job). Once you get the income stream, pay down your high-interest debt first, as the probability of earning a higher yield in real estate than the holding costs of that debt is very low. Actually, this is a good year for you to do nothing but educate yourself in real estate while paying down that debt, as most realists are predicting a continued downturn of real estate values. So, since it`s not that smart to invest in an asset with a principal value that`s likely to go down over the next 12 months (possibly more), learn all that you can, prepare all that you can, and when your balance sheet is cleaned up, take action.

 

[Thomas Beyer]

Step one: clean up the personal balance sheet as the CEO of your own life. This means, you get a decent job in an area that interests you, possibly in another city. Then start saving and certainly pay down the CC to 0. Only then invest in real estate with real $s. In parallel you should
a) get educated on real estate, such as a REIN membership,
b) become excellent in your job so you get more money per h,
c) clean up or improve the credit side. So this means: paying the CC balance every month ..
d) get a small unsecured credit line and pay it back after a week,
e) save money like crazy
f) stabilize your life
g) find time to do real estate

Eventually you have to have time, life stability, a network of like minded people, cash and access to credit to buy real estate. Work on all those fronts.

More here on how to make money: http://myreinspace.com/public_forums/General_Discussion/61-3347-5_ways_to_make_money.html

Once you have some $s for real estate, invest in a Top 10 town recommended by REIN in a type of property that you become an expert in. This might be 2-5 years away .. so get educated, and stay motivated until then ! Then you also need a team of specialists (like accountants, lawyers, bankers, mortgage brokers, realtors, property managers) eventually, but not right now. More on how to get started here: http://myreinspace.com/public_forums/General_Discussion/61-4391-How_to_get_started_.html

Good luck .. dreaming, planning, action !

You`re in the dream stage .. good .. keep planning .. then you will be ready, one day, to ACT ! Most people fail in the planning stage. Acting is easy once the plans are in place. This takes a while .. probably a few years ..

btw: it took me over 10 years to get from "dream" to "act" .. so don`t get frustrated because by this time next year or in 2012 you do not own investment real estate yet !

 

[GarthChapman]

Markus, following Thomas` advice (and his posts) will provide a proven path to your goals.
They begin with dreams, but must soon morph into specfic goals -otherwise they remain dreams and will not materialize. So, put your goals to paper. Be specific about what you will achieve and when.

Have first a long-term vision, and then break it down into shorter time periods. For instance a dream of what your life will be like in 15 years. From that build a series of objectives with specific and attainable goals and results contained in them: a 10-year plan, a 5-year plan, a 2-year plan, a 1-year plan, a plan for the next quarter, a 1-month plan, a 1-week plan. And finally - what you are going to do today. Each segment must be designed with the success of the next segment in mind.

Let`s add up the required investment of time. The long-term dream can be created in 2-3 hours over a weekend. The ongoing maintenance takes about 1-2 hours each year, 30 minutes each quarter, 15 minutes each month, 15 minutes each week, and 5 minutes a day. Total maybe 45 hours in each year.

Review your goals frequently and adjust as necessary. When you succeed in reaching one - celebrate. When you fail to make one - look closely at why, and adjust. This process will make and keep you focussed. Focus drives success.

Measure your progress in areas such as:
-Education
-Career
-Income
-Debt (reduction at first)
-Asset accumulation
-Net Worth
-Free time
-The quality of your friends and of their friendships
-Primary relationship (spouse or significant other)
-Giving back

Hope that helps,

 

[terri]

QUOTE btw: it took me over 10 years to get from "dream" to "act" .. so don`t get frustrated because by this time next year or in 2012 you do not own investment real estate yet !

hear, hear, it took me 5 years and an illness that forced me to quit my job before I acted on it, but in that 5 years I planned and those planning years are every bit as important. DO NOT give up on your dream, and do not think that by paying down your cc debt and getting your finances in line you are not acting on it, you are, those are just part of the initial steps.

Terri

 

[RedlineBrett]

QUOTE (GarthChapman @ Dec 28 2008, 11:33 AM) Markus, following Thomas` advice (and his posts) will provide a proven path to your goals.


+1 Excellent posts by Thomas and Garth!