The Journey Begins

FYI, check out my new member intro for more background info on me.

In the process of making connections in my first week here on BP, I have been responding to emails with somewhat detailed commentary.  After realizing that my replies were getting to be borderline obnoxious, I remembered that I could set up my own blog here at BP to afford me the opportunity to spew forth the thoughts that continue to be generated inside of my head.  I have written many-a-blog prior and was actually a featured freelance writer on one of the more popular finance websites out there for a bit (hint: combine the first-person, a place where you deposit money, and hard round currency into one word).  

The stock market remains my passion, but I have always had a cursory interest in real estate investing.  After some brief analysis, the two types of investing actually share very little in common. 

Real estate investing is unique in that rarely does one realize a loss (though, coincidentally, I am a member of this club). With stocks, if you manage risk, employ favorable reward/risk parameters, you can still be extremely successful being right less than half of the time. The financial and logistical barriers to entry for real estate investment are far more significant than for stocks. Anyone with 5 grand can open a brokerage account and start trading immediately. 

Real estate requires far more planning and preparation, and here is where we jump off. 

I joined Bigger Pockets for the seemingly limitless educational material and networking opportunities. After hanging out here for a bit, I have realized that the scope of what I want to accomplish in real estate is far grander than what I had originally planned. 

I read J Scott’s amazing books, but after scouring MLS for a while, realized that my margins were going to be too thin to try and fix-and-flip using properties that had already fallen through the sieve. 

Then I thought: Pittsburgh is a fantastic market to acquire buy-and-hold properties for income. There are plenty of turn-key (or near) properties available on MLS that could generate positive cash flow (I happen to reside in one). After kicking that idea around in my head for a bit, I felt the amount of time to scale such a business was unattractive.

Back to the drawing board. 

My problem with fix-and-flips is/was the ability to find economically viable candidates as well as having/finding/tying up a large cash outlay for renovation. My financial problem with buy-and-holds is similar, plus I equate that strategy to that of dividend investing. The results will be FAR more beneficial as an income producing strategy when used in conjunction with more speculative ventures to add to one’s capital base. 

Back to the drawing board again, but I refuse(d) to be discouraged. 

That is when I discovered “wholesaling”. 

At first the strategy made very little sense to me, but then the pieces of the puzzle started coming together and a light bulb went off in my brain. I said: “the key to any good investment is buying at a lower price than where you sell”.  In stocks there are almost an infinite number of strategies one can employ to accomplish this task. In real estate investment, the options are far more limited. Those who find the greatest success in real estate are the people who find the deals. 

This is when I came to the conclusion that if I am going to have any sort of staying power in real estate investment, the foundation of my business would need to be focused on locating the deal. If one can have a direct pipeline to the most prized properties in (small-time) real estate investment, and have a system in place to repeat this process, I feel like that is a game-plan for sustainable success. 

So, that is where we stand (research and development).

This blog will serve as a document to chronicle my journey in trying to build my business from the ground up. The transparency found on J Scott’s personal blog was HUGELY influential on me. Therefore I will be writing posts detailing everything that I plan on doing. If I mess up, you will be the first to know. If I discover something unique that is working for me that isn’t well known, you will read about that as well. 

From developing my marketing strategy, to all of the various logistical items/concerns that come along with starting this business, they will all be documented here for the world to see. I feel like this pie is big enough (and I’m so small-time) that we can all get our fill.

Let’s build a business.