Expert: Brian Bocchieri - 5/29/2008

Question
Hi Brian. I decided to follow my entrepreneur desire and I am currently trying to become a real estate investor in the Chicago (including suburbs) and northwest Indiana area. I face a common problem that I think most face. Lack of knowledge, start up capital and credit. I have gotten over the fear of failure (though the uneasy feeling and excitement of taking a risk never goes away I hear) after going over some basics in a real estate investing class. This is a more recent class that has given me confidence and I even met three other people that is motivated like myself. Thank goodness because I ran into so many scams and people trying to prey off my inexperience and desire to learn to take large amounts of money away from me. I can proudly say I haven't been beat out of a lot of money yet so there is hope for me. My question is where do I begin to get started? My long term goal is to buy and hold multi-family units for passive income. The reason why I want to get involved in real estate is because I have done some homework and I'm developing a love for the business. My only other interest is technology. I attend meetings to more than one real estate investing clubs to learn all I can to get started. What is the first thing I want to do to find properties? I know that my lack of credit can be a problem but I have learned a little bit of different strategies I can use (wholesaling, short-selling, rehabbing, ect.)while building that for myself or through getting incorporated and building business credit. What do you think is a good approach? Thank you for your time.

Answer
Helo Earl;

Congratulations on taking the step to start investing.  

Yes you are correct there are many "gurus" that are very happy to take your money and give you very little content.

As far as where to begin you have taken your first step in identifying you niche (Multi family).  You can begin by looking at properties in you area to get a feel for the rental market, the types of properties available, rental rates and the like.

Once you have reviewed properties on your own and have gotten a feel for what you and some partners can afford you may want to seek out a very good commercial real estate brooker to help you find what you are looking for.  

An easy place to start looking is loopnet.com, craigslist.com, dealmakers.com mynextdeal.com this will give you some comparisions to establish a cap rate you should be looking for and some general costs per unit for A,B,& C class apartments.

This should give you enough homework for now once you complete this step we can speak about financing.

Wishing you all the bset. and look forward to hearing from.


Brian Bocchieri