First Real Estate Investment Trust (SGX: AW9U) is a healthcare-focused REIT. It currently has a portfolio of 20 properties (16 in Indonesia, three in Singapore,

What’s the best way to start real estate investing?

If you don’t already own your own home, go buy one. A house, a condo, whatever floats your boat. THAT’s the best way. Live in it for a year, then go buy another one and turn the first into a rental. Wash, rinse, repeat. That’s the easiest and best way. Keep in mind when you are buying the first one what you can rent it for, what upkeep will cost on it (if there’s a big yard that has to be tended), etc. and so forth with each purchase. If you can, find a small apartment building (4 units or less, otherwise you get into other laws and taxable things) and live in one of the units. Most people don’t know you can buy this with a regular mortgage, as it would be your primary residence. After a year, buy another property and move again.

If you’re looking for other ways, here are my suggestions:

Go to a 3-day seminar on flipping houses and real estate investment. But do NOT buy into their education plan. Those things are created to make money strictly off the education pitch they are selling and most people just can’t do what the “guru” did to get big enough to be able to “teach” in the first place, because mostly it was have the cash in his pocket to start with. Go in and soak up what they are talking about and network with other folks who are there for the same reasons. If you find a real estate agent who is there to learn more about it and network, you’ve struck gold.

After this, join some “Meet-Up” groups online specific to real estate investing and you’ll be able to network with LOADS of people and, because you’ll have been to the 3-day seminar, you’ll know the language of what those people are talking about. Look up ROIs, cash flow, and Cap Rates.

I can tell you from experience that the best real estate investments are buy and hold properties. They are long term, usually have a great growth rate and will pay for themselves. This is a real retirement plan. The first one might be hard to pull the trigger on (I paid cash for mine), but once you have the first one, the rest come a LOT easier. Not just to pull the trigger, but for financing them too. Banks love to lend money to investors who already own investment property.

A lot of people will tell you to flip houses for the quicker big bucks (this is a lot of what they want you to believe in the 3-day), and to do it with other people’s money (hard money, private investors, etc). What they won’t tell you is that, unless you can at least flip 4–5 houses a year, you can’t really make money at it because of the time invested, labor and the holding costs. Plus if you don’t have the cash to do your own flips, you have to use a private investor or hard money lender and a large percentage of hard money lenders are a lot like loan sharks, which increases your holding costs. AND once you start flipping, if you aren’t using your own cash, you kind of have to keep flipping for the income to keep coming in. Location for flipping is also key, for what kind of money you can use, primarily because of labor costs. You can flip houses in Nashville for a huge profit, even using hard money, but try to do the same thing almost anywhere in the state of Maryland or the metro Washington, DC area with hard money, you’re doing great to see $10,000 profit.

There are other types of real estate investing you should research too:

  • NNN commercial properties
  • Airbnb investment properties (some banks will lend for the purpose of opening an Airbnb now!)
  • Laundromats and storage facilities are two of the top 3 cash cows in this country
  • Mobile Home Parks, the other of the top three cash cows. Warren Buffet is the largest owner of mobile home parks in the U.S.
  • Large land tracts for forestry stewardship. This is not well known, outside of the Southern states, and it’s a LONG term investment, but definitely worth looking at. You can purchase land at $1000+/- per acre, often with trees already on them. Have the timber cruised and sell it in a closed-bid auction (your local county forester will HELP you do this for free!). Often this will pay a significant amount of the mortgage, as much as 3/4 of it. Once the trees are cut, pay down the mortgage but, and this is essential, with a very small portion of the proceeds (like 2%) PLANT NEW TREES. In 15 years, they can be thinned for a profit. At 20 years they can be harvested again for a larger profit. At 25 years, clear cut those trees and REPLANT. Like I said, this is a long term investment, depending on how old you are when you start, that will help pay for your kids college education, and then again your retirement. The best part is you are selling the timber (interest) and never selling the land (the principle) which will likely more than double or triple in value while you hold it this long. This is something you can teach your kids about and leave it to them to continue the timber growth. I own a 43 acre pine plantation in Mississippi that we are getting ready to do our first 15-year cutting on, and that’s just part of my investment plan!