EP72 6 Steps to Start Real Estate Investing in 2025: Build Generational Wealth

Ready to make 2025 the year you change your financial future? In this episode, I break down the 6 essential steps to start real estate investing, tailored specifically for the Latino community. From building the right mindset and setting clear goals to analyzing markets, managing properties, and creating a 5-year plan, you’ll get everything you need to start your journey toward financial freedom. If you’re dreaming of leaving a legacy, earning passive income, and learning from someone who’s been in your shoes, this episode is for you! Stick around for a special invitation to join my Rental Property Bootcamp and take the next step toward your investing goals. Don’t miss it!

Highlights from this episode:
• Establishing a clear vision and goals for investing
• Conducting a comprehensive financial audit and budgeting
• Understanding down payment requirements and financing options
• Exploring suitable real estate investment strategies
• Analyzing market trends and property potential
• Building a trusted team for management and support
• Creating a flexible five-year plan for sustained growth

Ready to turn your dreams into a solid plan? Enroll today in my Rental Property Bootcamp and learn how to start investing in real estate the smart, ethical, and sustainable way.
https://moneychisme.com/rental-property-bootcamp/

Rental Property Calculator
https://moneychisme.podia.com/investment-property-analyzer

Chapters

• 0:00 Getting Started in Real Estate Investing
• 1:56 Step 1 Find Your Why, Vision and Goals
• 3:51 Step 2 Audit Your Finances & Funding Your Rental
• 9:09 Step 3 Pick Your Real Estate Investing Strategy
• 11:33 Step 4 Analyze Your Market and Property
• 13:43 Step 5 Managing Your Team & Property
• 18:01 Step 6 Create Your 5-Year Real Estate Investing Plan
• 22:32 Real Estate Rental Property Bootcamp

Transcript

Violeta: 0:00

This year is going to be the year that you start real estate investing. Real estate investing is one of the most powerful methods out there to build wealth, especially generational wealth, and I get it. It seems scary and intimidating, but in this video, I'm going to go over six steps on how to get started and buy your first rental property this year. Hola, I am Violeta, host of the Money Chisme podcast, where I talk real estate investing, entrepreneurship and just have other money talks. Now, real estate investing is something that you don't necessarily want to like just stumble across on. Even though I did that, I ended up accidentally getting into real estate investing. I didn't know that's what I was doing, but let me tell you there was a lot of hard lessons learned that you know. I want to make sure that you don't make the same mistakes that I did, and that's why I am sharing these six steps, because these are steps that I learned the hard way throughout my journey and I'm sharing them with you so that way, you can get out there and buy your first rental property, but also become a successful real estate investor. So, number one before you even start about buying your first rental property, this is where I failed was that I didn't have a vision, a goal and I didn't have the right mindset. Because real estate investing isn't just about making money. It is about creating wealth, and especially generational wealth, and setting yourself up, and maybe future generation, for financial abundance and wealth building. And that's the first thing you need to figure out is why are you investing in real estate? Why do you want to build this wealth? And you know it could range from you want to be just super rich, you want to have a huge portfolio and just have a lot of money to do whatever you want buy your luxury things, and that's okay. Or maybe you just want that extra income just to have as a cushion, so that way you don't have to stress about paying bills or anything like that. Or maybe you want to leave something for your kids on top of building cashflow. So, whatever it is, figure it out, because that's going to affect what kind of properties you invest in, the strategy that you want to go for. And this is what's going to keep you on track throughout your journey, because you have your why and then the next thing you want to do is create goals from that why and your vision. So one thing I like to do is that I close my eyes and I think about future me in maybe five, 10 years. What is she doing? Is she, you know, out there in Spain drinking mimosas? Like, what is she doing For me? Future me is out there in El Rancho. She has some chickens. I'm growing my own food, estoy tomando café outside and I'm just like listening to music, watching the chickens, the dog, my daughter running around and I just get to have these slow mornings, these slow days, and get to do what I want like this podcast, like YouTube and things like that and really just live life the way I want to live. So that's why I am investing in real estate.

Violeta: 3:51

Step number two is finances. You want to audit your money and also figure out how you're going to buy your first rental property. So, the first one buy your first rental property. So the first one, you want to audit yourself, your finances. Look at your budget. If you don't have a budget or a spending plan, I like to call it a spending plan, because a budget sounds more restrictive and the spending spending plan feels more like strategic and planned out and all that. So, whichever one you want to use, the point is you have to have one, because you need to know where your money is going, because that skill is a very important skill to build on whenever you have your rental property, because you got to manage your expenses, your income, all that stuff. So you want to start getting into the habit now, but not only that. This will give you a clear idea of where you stand, what is your starting point, because you can't get nowhere and get to the finish line without a starting line right?

Violeta: 4:58

So here you know what your credit score is. Look at your debt, figure out what you can reduce, what you can pay off, because this is going to affect your debt to income ratio, which is known as DTI, which is just how much debt in comparison to the income that you bring in. How much debt do you have compared to that? And lenders look at this to determine how risky you are to lend to, and so it's a qualifying thing. So you want to make sure that you lower your DTI and you want to look at your credit score. Pull that credit report, go through it and make sure that everything that is in there is yours and if there's anything that's not supposed to be in there, that you disputed, and get that fixed before you go out there and try to get a loan and you know, if you don't have a good credit score, build up to it. Like, take your time in fixing these things and setting your foundation. It's not a race. You will get there You'll. You just need a little bit more time and just fix your credit. Um, there are lenders out there that you know and loans out there that you can qualify if you have a not so good credit score, but you get the best interest rates when you have a good credit score. You don't have to have an excellent credit score, but the better rates are between very good and excellent.

Violeta: 6:38

The other thing to look at is do you have enough for a down payment? How much do you need for a down payment? And if you don't like, how much do you need to save a month or whatever timeline time frame you want to set yourself? How much do you need to set aside? How much do you extra do you need to bring in and just create a plan on how you're going to come up with that money? Is it you're going to go work extra side hustles on the weekend or maybe you're just going to cut back on some things until you get that down payment, whatever it is. Create your plan on how to get your down payment. Usually it is 20 to 25%. For an investment loan, I always have to have 25%, so I would shoot for 25% if you do not plan to live in the property, if you're just going to go ahead and go out right and rent it out. But if you plan to like house hack or anything like that, then there's other loans out there that require less, like almost zero percent for like VA home loans, which is the loans that I use, and FHA loans. You can do like as little as 3.5 percent. But I do want to put like a little side note.

Violeta: 8:00

There are creative ways to get a property. It's called creative financing and it's just finding a creative way to pay or acquire a property. So this could be private money lenders or hard money lenders. A private lender is basically just someone that is not a bank or anything like that, a business that lends out money. So this could even be like your mom or dad or uncle or whoever. That is okay with letting you borrow that money. A hard money lender is a business, but it's not like a bank, it's not like an official lender. So hard money lender is going to you, going to allow you to finance that property through them, but it's usually a short term and also it is a higher interest rate because it's meant to be a short term. So those types of loans are geared towards buying a property that you might need to fix up because a regular lender is not, a bank, is not going to want to risk it, but just want to put out there that there are creative ways out there.

Violeta: 9:10

Step three is finding your real estate investing strategy, like figuring out what's your style. Are you someone that wants to do like fits, fix, fix and flips? That's not my current vibe right now. I like long-term rentals, so I buy long-term. I buy properties that I'm going to rent out for the long-term and at the moment I do a multifamily which are like duplexes, triplexes, stuff like that up to four units. But at the moment I've just been finding like duplexes. But I first got started by house hacking and using the BRRRR method, which is buy, rehab, rent out, refinance, repeat. Where you buy the house that might need a little, you know, updates or something like that. It it's not a full, complete rehab of fix and flip and you live in it, fix it up as you go, then you move out, rent that place out and then, once you acquire enough or build up enough equity, then you cash, refinance out the equity to buy another property and then you do the same thing. So that's another strategy.

Violeta: 10:24

And house hacking is basically just finding a way to make income off the house that you are currently living in. So like, for example, buying a duplex, you live on one side and rent out the other, things like that. Or maybe you charge you have space, extra parking spaces, and you charge someone to park their RV there a month, or something like that. So, or maybe you have land and someone needs to put some cows on it and you're like, okay, I'll lease it out to you. Like any way that you can find to bring in income in a property that you are living in, that's called house hacking. Or you know, you could do the short term rentals also known as, like the Airbnbs and things like that. I'm not too fond of them right now, especially now that it's kind of harder to go that route, but it's still doable. But there is now midterm rentals which are geared more towards the like professionals, like traveling nurses or just you know corporate people that you know go to, like conventions and stuff like that.

Violeta: 11:34

Step number four is analysis analysis of your market and analysis of your property. So you want to do deep dives into the market that you are targeting. Make sure that the strategy that you picked is going to work there. For example, airbnbs Is the market? Does the area allow Airbnbs or like? What are the regulations like? Is it going to make it difficult for you to have a short-term rental in that area? Allow airbnbs or like? What are the regulations like? Is it going to be make make it difficult for you to have a short-term rental in that area? What does the schools look like? What's the crime rate?

Violeta: 12:12

How much rent do you think that you can get for the amount of bedrooms that your property has? You know how much are you going to pay for the property? What do you expect that to be? So median sales price, purchase price, things like that. A lot of these things you could get like through. Zillowcom is one. Realtorcom is another good one that you could go in there, and Zillow even has a section where you could go. Put a zip code in and it pulls up the rental market and it could tell you if it's a hot, cold or warm market, how much the median rent is there for like a one, two, three bedroom, and you know it gives you a good idea of the rental market. So you could do a good market analysis. And then the next thing you want to analyze is, of course, the property itself or the condition of the property, the purchase price again how much you can get for rental income. So you're doing all the crunching, all the numbers, doing all the math here to see how much you can make off this property and you want to check things like cash flow and your cash on cash return and your cap rates and all that. And it's a lot of numbers and everything like that. But once you get the hang of how to calculate these numbers, it's just a quick, easy calculation and I do have a calculator for you that's linked down below as well, if interested.

Violeta: 13:43

Step number five is your team and property management. Like, a lot of people forget about the team part because you think that, okay, I'm going to manage this property myself or I'll just have a property manager and that's it. They do all this stuff, but there's a lot of moving parts that if you're going to manage yourself, that's a lot of people that you have to manage. You've got to have, like a handyman, a plumber, an insurance person, a realtor, like contractors, because your handyman's not going to be able to do everything, or you might not be able to do everything because some things require licensing and all that stuff be able to do everything because some things require licensing and all that stuff. So you have a lot of people that you have to work with and hire.

Violeta: 14:39

So, building a team that you trust, you know, take some effort, interview them, interview several people and just keep track of them. And especially, like property inspectors, I use the same one all the time because I've built that trust with them and I trust his expertise. There's an insurance person that I work with, a realtor that I work with. Just make sure that when you are finding these people that you're asking about, like their experience, do they have experience in what you're trying to do? Because there's a realtor that just sells houses for first-time homebuyers or people that are buying homes for themselves, and there's a difference between a realtor that goes out there and finds investment properties for you, because they have to have a more detailed eye when they go, look at these properties or show you these properties and things like that. And I will say one tip that even if you want to manage the property yourself, always do your numbers as if you were going to hire a property manager, because you never know if later down the line you get tired of managing it yourself and you need to hire a property manager. That has you covered to already have that included.

Violeta: 16:01

And then, as far as property management, of course you have to know how you're going to screen your tenants, how you're going to find your tenants, how are you going to collect rent, how are you going to, you know, take their maintenance requests and you know, fulfill those maintenance requests. And what about evictions, all the legal stuff, and like there's a lot that goes into managing your properties and a lot of legalities, which is one of the reasons I will always use a property manager, because that's an extra safeguard for me. And then also it's a lot of work. Like I want this to be as passive as possible and so far it is. I just, you know, get the monthly statements from them and just random maintenance requests that they'll ask me, and just when I have to set up the property. That's most of the work that I do. Besides, you know finding and buying the property and they take care of everything and I just, you know, get the statement every month and collect my money right. But there is still some management that you want to make sure that you're doing and that is tracking how your property is doing. So they send me statements every year, but there's still a few things that are not included, so it doesn't calculate you know how well my property did that year. So that's you know how I use cash, on cash return, which I calculate myself based on you know how that property did throughout the year, and so that helps me keep track on hey, is this rental property still making me money or is it, you know, dragging? It might be time to sell it and or do a 1031 exchange, cut my losses, do a 1031 exchange and then buy another property that's actually going to be profitable. So there's a lot of management to still do, even if you have a property manager.

Violeta: 18:02

And the last step is creating your five-year plan, like thinking long-term, one of the issues that I had at the beginning, because technically, I've been investing in real estate for over 10 years, but it hasn't been until the, I would say, the past four or five years that I actually took it seriously. And now I am actually advancing in my real estate journey, because I didn't know what the heck I was doing the first few years. And well, the first few years I didn't even know it was real estate investing. Then I figured it out and then I was, you know, just buying every duty station that I went to and then renting them out. But that wasn't a very I mean, it was a strategy. But in order to accelerate a little bit faster, I needed a different strategy, which is what I'm following now. And so that's why it's important to create a five-year plan, and the reason I like for people to set up a five-year plan is think of it as like starting a business.

Violeta: 19:11

Your first five years is your startup phase. This is where, like you launch right your first year, you're setting yourself up, you're buying your first property, you're saving up for your down payment and all that. So your first year is all about buying your first rental property. And then the second and third year you're kind of like learning. You're buying another property, but you're learning. There's things to learn, believe me. And then your third and fourth year you're kind of getting that confidence as a real estate investor because you're probably on your second, third, possibly fourth property and so you're gaining confidence, you're building a network and starting to really compound your cash flow. So that way it's easier to now buy, save up for a down payment for another property. And then by your fifth year you're like all right, I have this many rentals Now I'm ready to like, start scaling and start moving forward. And where do I go next? So it's similar to when you start a business.

Violeta: 20:23

The first five years you're just kind of getting the hang of setting up your business and getting all the logistics, building your clientele and all that stuff. And then so by the fifth year you're like all right, I got a good hang of this business and I'm starting to make money. Now it's time to scale the business right. And same thing with real estate investing. The first five years you're just trying to set yourself out, you're setting up that foundation and then you actually start making money and reinvesting it and all that. And so you want to create your five-year plan. And also another reason I want to keep it at five years is because you don't know what might happen in those five years.

Violeta: 21:12

Maybe you start this journey single, like I did. I started off real estate investing single and then now I'm married. So now my plan has to shift a little bit, because now I have a family to think about and you know it's not just my money anymore, right. So I have to think about, like the household and our goals as a unit, right, and so that's why it gives you kind of that flexibility. But, overall, take your time, figure out what your vision is, your goals, your strategy, all that combines for your five year plan, and then just that will be your roadmap for your next five years, so that way you again build that foundation and get successful in real estate investing.

Violeta: 22:05

Yeah, those are my six steps to get started in real estate. I am going to plug in my rental property bootcamp here. We go into depth. In all these six steps we create your five-year plan, so that way you have your roadmap, and so it is a self-paced course. Again, we go through every single step in detail and each one has its own worksheets.

Violeta: 22:32

You also have included my rental property calculator, my rental income and expense tracker, where you can track all your properties and it will automatically calculate, like your cash on cash, and how much profit, and track all of that to see how profitable your properties are doing.

Violeta: 22:53

And I also have a money plan. It's a monthly tracker and also has a yearly tracker, which has your network tracker, a debt tracker and, of course, where you you're spending, where your money is going. So all of that is included in the course, along with a workbook, worksheets and all of that. So if you are wanting to get into real estate investing and want to buy your first rental property, the rental property boot camp is perfect to give you all the knowledge and help guide you through these steps, and that way you have your roadmap to your first rental property and your next five years. So that is linked down below. Check it out. But other than that, if you have any other questions, feel free to DM me or email me. All my contact information is listed down below, but I will see you in the next one. Bye.