What's the best way to get into real estate?
Dear Dave,
I used to work for the city as a property appraiser. I really enjoyed the job and developed an interest in real estate after seeing what investors were doing with their purchases. What’s the best way to get started in this business?
—Brad
Dear Brad,
If there’s a real estate investors' club in your area, I’d join it. Attend the meetings and hang out with the people who are doing what you’d like to do for a living. You can also check the foreclosure sales and see who is bidding. Usually, those are your better investors and a great source of information.
Find a couple of folks at these places who have been in the business 5 or 10 years and really pick their brains. If they’ve survived that long, chances are they’re pretty conservative and have stayed away from debt by keeping a cash position.
Anyone can buy houses for a few years, go into debt and end up broke. I know, because that’s what happened to me years ago before I wised up. Don’t let it happen to you!
—Dave
Best time to start a small business?
Dear Dave,
I’m thinking about starting my own small business, and was wondering about the best time to do something like this. Should I wait until my home is paid off or until I have a year’s worth of expenses savings?
—Bernie
Dear Bernie,
The best advice I can give you is to start this business DEBT-FREE. Don’t run the risk of losing everything by borrowing a bunch of money right off the bat and becoming a slave to some banker!
You don’t necessarily have to have your home paid off or a year’s salary saved up, but you DO need a track record in what you’re doing to make sure you’ll still be able to eat and keep a roof over your head. It would be a lot easier, too, if you started this new business out on a part-time basis in your spare time. I launched my company from a card table in my living room, so I know it can be done.
I’d also examine your business idea and figure out how long it will be before you start seeing some real money in the deal. Some businesses make money sooner than others, but you need to have some idea when you’ll become profitable and able to live comfortably off this idea.
—Dave
Selling house to get out of debt ... does Dave agree?
Dear Dave,
I owe $20,000 in consumer debt. I’m selling my current home - which I don’t like very much - and want to take the $25,000 in equity to pay off everything I owe. After this, I’m planning to live in an apartment for about a year then make a huge down payment on a new house. Does this sound like a good plan?
—Dale
Dear Dale,
I think it’s a good plan because it sounds like you’re ready to get out and would sell the house anyway. But if the only reason you’d sell your house is to pay off the debt, then I’d say don’t do it – just get angry at the debt and attack it instead.
Feeling like you’re forced to give up your home is an emotional experience – one that can damage your spirit. You should always exhaust all the other options before putting yourself through that kind of stress.
—Dave
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Dave Ramsey is a nationally syndicated radio talk-show host and best-selling author. His life experience gives him an unusually deep perspective and insight into life and money matters. Be sure to get Dave's "Total Money Makeover: A Proven Plan for Financial Fitness." If you'd rather order by phone, call WND's toll-free customer service line at 1-800-4WND-COM (1-800-496-3266).