Today we are going to discuss how a newbie can build wealth through
real estate investing specifically through buy and hold real estate
investing.
Whether you're a fresh graduate, a young professional, or someone
looking for another way to build wealth, stick around because we are
going to cover a topic that can potentially change your life.
Real estate investing definitely changed my life for the better.
I'm going to share how I was able to do that and how you can do that
as well.
Before we dive in, I want to define what buy and hold real estate
investing means.
Simply put buy and hold real estate investing means you purchase a
property that you plan on holding for the long term.
You put tenants in it and collect cash flow every single month from
that property.
The idea behind this type of real estate investing strategy is to
build wealth over the long term by creating passive income or semi
passive income, and then you can use that income to pay off that
mortgage over time and create even more passive income.
Not only that, you're building equity in the home.
All right, so what is the first step on how a newbie can build wealth
through real estate investing?
It is to educate yourself about real estate investing, which is what
you are doing right now, and honestly, you do not have to be an expert
to get started in real estate.
When I got started, I was definitely not an expert and I am still
learning things now.
You do need a basic understanding of the industry.
Of course, you can watch YouTube videos like this about it.
You can also go to seminars or read books about real estate investing.
There's also online courses that you can take or even get a mentor,
whichever method you end up choosing, make sure that you spend enough
time getting some education on how to invest in real estate.
The way that I chose to educate myself on real estate investing was
through a mentor and actually two mentors.
I have a really good friend who is successful with real estate
investing.
He owned multiple properties, so I went to him and I asked him a lot
of questions about real estate investing at my nine to five job.
I also had a boss there who was investing in real estate and he was
also successful with it.
I asked him a lot of questions about real estate investing as well.
Not only that, my sister became a real estate agent, so I had a bunch
of questions for her too.
By educating myself first, I was able to buy a property and do it in a
lot more effective way than if I had not educated myself first.
Step two, to build wealth through real estate investing is to create a
plan for yourself.
Once you have that basic knowledge, that education about real estate,
you can create your own plan.
You can set some realistic and achievable goals for yourself, and not
that you should be limiting yourself, but we don't wanna stretch way
above and not even try to reach those goals.
But think about what do you really want to achieve through real estate
investing?
Do you want to generate passive income?
Do you want to build wealth over the long term?
Do you want to build wealth in the short term?
Once you have your goals with real estate, write them down and then
you can build out the steps to achieve those goals.
For me, I knew I wanted to create that cash cashflow every single
month for myself and not have to worry about something in the short
term.
For example, there are a lot of people who do fix and flips, and I've
seen some that have been successful and some that have not been
successful with it, and I just didn't want that pressure for myself.
My goal was to create that passive or semi passive income and build
that wealth over the long term.
That's why I chose the buy and hold strategy.
I didn't wanna have to worry about making my money back very quickly
and putting it into another investment.
If you've decided you want to invest in real estate, comment below and
tell me what one of your real estate goals is.
And also with real estate investing.
I didn't realize this in the beginning, but I wanted to create
financial freedom for myself.
I bought my first property back when I was 25, so a while ago, and I
just thought, I want to invest my money, make it work for me and get
some roommates in the property that I own so that I can create cash
flow that way.
But I had no idea that I was going to be able to achieve financial
freedom through real estate and stock market investing.
That did not come until later on when I bought my second property,
which was about 10 years later after I bought that property, I bought
another one the year after that and I thought, okay, I definitely want
financial freedom.
I know real estate can help me do that, so I figured out my exact
numbers on what I would need to become financially free through real
estate, and that was buying one more property.
I figured out if I had a total of four properties, then I would be
able to become financially free.
So that is what I did, but I did not set that financial freedom goal
in the beginning.
It would've felt way too unattainable.
I just didn't realize the potential back then.
And then step three for a newbie building wealth through real estate
investing is to build your team.
And this team can be very small.
It doesn't have to be a really large team.
Essentially, you want to have a real estate agent that you trust and
then a mortgage broker that you also trust.
And if you do not want to manage the property yourself, you'll want to
have a property management company.
And for me, since I'm not very handy, I also have a handyman.
And if you're really serious about real estate investing and growing
it into a full portfolio, you may want to have a lawyer that you work
with.
Like I said before, my real estate agent is my sister and she is
awesome.
So I feel really blessed to be able to have someone that I can work
with that I really trust.
So find someone that you can trust, and my sister also recommended
some mortgage lenders that I could work with.
And then I have a friend who is a handyman, but you don't already have
to know people that you can create your team with.
You can definitely ask other people for referrals.
And honestly, when you are just getting started, I would not just
randomly choose a mortgage lender.
I would get three different estimates when you're ready to buy a place
from three different mortgage brokers or lenders and decide who has
the best rates and the lowest costs associated with purchasing a home.
And also like the person that you're working with.
And there are a lot of property management companies out there, so you
have a lot of choices.
You can ask people who they use, or if you don't know anyone investing
in real estate, definitely do that Google search and see what comes
up.
Or you could also join a real estate investing group on Facebook and
get ideas from other people inside of the group.
And then step number four is to find your first property so that you
can start building that wealth.
Now that you've educated yourself, you have your goals, you have your
plan in place, you have your team, you want to find that property.
There are a lot of different ways to do this.
The way I did it was by using my real estate agent.
She would send me listings, but I also downloaded the Utah Real Estate
app, and I'm sure there's one in your state.
You can download that and search for properties in the area you want
to be buying so you can find properties that way as well.
Not only that, you can drive in different neighborhoods and see if
there are properties for sell by owner.
You can check Facebook Marketplace or even Craigslist or if you're in
Utah, ksl, when you're looking for your first property, consider the
location.
I like purchasing in a good, safe location.
Since I'm managing the properties myself, I'm going to be showing
people the home and I want to feel safe and I want the people that I'm
renting to to feel safe as well.
I also like having my properties near the freeways, not right next to
the freeway, so you can hear the freeway noise, but pretty close.
And I like it in a central location.
I like having them close to the mountains and then close to downtown,
closer to the bigger city, but not right in the heart of downtown.
So figure out what location you want to have a property in and then
also consider the type of property, the condition of the property.
I like purchasing homes that are ready to rent.
That way I can get renters in immediately and start collecting cash
flow immediately and going along with that cash flow.
What will be a potential rental income be for that property?
You want to do research about that beforehand as well so that you can
run your numbers and make sure that it works for you.
Comment below and tell me one thing that you for sure want in your
rental property.
And going back to my strategy of purchasing good properties in good
locations, that means I'm usually going to get good tenants.
They're going to pay their rent.
For the most part, yes, I've had some problems, but having 50 plus
tenants, one really bad tenant is not bad odds.
Just figure out the plan that is going to work for you.
I have a friend who does the complete opposite.
He invests in a little more sketchy area and he has lower income
renters, but that works for him.
Just figure out what is going to work for you.
And then step number five is financing your rental property.
Once you've found your property, you're going to want to finance that
property.
I'm just guessing that you probably don't have the full amount for a
mortgage.
You'll want to work with a mortgage lender and figure out the best
type of loan for your situation.
And just to let you know, if you are moving into that property, which
is what I did on my third property, then you only have to put down 3%
instead of the standard 20% down payment.
Keep that in mind.
I was able to move into that property.
It made it a lot easier because I was single and am single, but even
if you have a family, you could potentially buy a property with a
mother-in-law basement apartment and rent that out, and you could live
in the top half and move later on and then rent out that top half.
You'll also want to make sure that you have a good credit score that
is going to give you a lower interest rate on your mortgage loan.
And if you're wondering how to improve your credit score, I do have
another video about that.
I will leave a link above.
And then step six on how a newbie can build well through real estate
investing is managing your property.
Once you've acquired your property, you'll want to manage it.
You can hire a property management company to do that, but if you want
to do it yourself, then that is definitely an option.
That is what I have done with all of my properties.
You'll need to screen the tenants, show the place, take care of any
problems that arise, make sure that you are collecting rent, all of
those types of things.
Depending on what your schedule looks like, you may have the
flexibility to manage your own property, and that way you're not
paying someone else to do that, which would increase your cash flow.
But if you are strapped for time, it may be better to pay someone else
to manage it, and that way you don't have the stress of having to take
care of that property.
You can pay someone else to do that, but figure out what would work
best for your situation.
And if you have more questions about real estate investing, I have a
whole playlist on my YouTube channel about real estate investing, but
I also have a book that I have written and recently launched, which
talks more about how I was able to invest in real estate.
I will leave a link to my book below in the description.
You can click on that and get your very own copy.
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Thanks so much for watching.
I'll see you in the next video.