Start Small: How Purchasing 1 Investment Property A Year For 10 Years is Really All You Need

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When you’re getting started in real estate investing, you hear so much advice from experienced investors, its really hard to determine a strategy on where to start.

I have one bit of advice for you in order to help break this real estate investing thing down, and give you a model that can help make you comfortable getting started. Here it is:

Let’s see you put your goal to obtaining 1 home a year, for 10 years.

Related:  How to Build Long Term Wealth From Flipping Houses

I’ll explain why and how this mindset can give you a great frame work from which to start your career, and keep your expectations and perceptions in line with the reality of venturing into real estate.

As you get more experienced, you will naturally progress to speedier turn around times, more affordably and with less risks. But starting out, keep it simple.

Lisa Phillips

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About Author

Lisa Phillips is the first video blogger that exclusively advises everyday investors on how to cash in on working class neighborhoods for higher profits with sensible investing strategies. You can visit her hours of free videos and tips On Google + Here!

29 Comments

  1. @lisa phillips, what kind of financing were you using for the properties that you mentioned that were in the 30-40k range?

    • Lisa,

      I agree I’ve bought and sold over 800 properties and didn’t need anywhere near that. I like buy 20 houses, sell 10 and own the remaining 10 free and clear.

      David Krulac

      • @DeadRick – I have financed using different products, check out my financing video for more detail. But, for the mortgage I used, I went to an independent mortgage officer, who has access to a wide variety of products, so I did not come up against the minimum amounts. Thats more of a bank limitation than actual loan product limitation.

        @David – it CERTAINLY is nice to own property free and clear, isn’t it. The fast turn around time for working in this price range certainly makes it a lot faster. Since I have one paid off property, it pays for the second, shortening the turn around time for the second property to ~2.5 years from 5 years. It really is quite amazing.

        • Which one is your financing video? I’m not seeing an obviously named post for that.

      • dorothy smith on

        This was such a nice presentation for new investors in real estate. You are so right to start small like this, your less likely to mess up, because you have a plan that not too overwhelming. Real estate can be addictive, I think because new investors are so anxious for real estate to work. I just keep at it, for its working for alot of people. The internet is full of persons working with real estate. Ask questions, most investors are willing to answer your questions and help.

  2. Dana Nicholson on

    Hi Lisa,

    I needed to hear this!! I’m getting stressed because I felt I needed to obtain another investment property right away after my first one. Don’t quite feel like an investor with just one property. My goal is to obtain 2 properties a year for next 2 years and then increase that number after 2 years. What I took from this video is one will due and keep searching for the next, but if it doesn’t happen immediately, so be it.

    Thank you so much for this video.

    Dana
    NicholandSons Real Estate, LLC

    • Hi Dana!
      Yeah, I wouldn’t stress myself out too much (But then again, I have a long game in mind. If you need it now, stress away!). These homes we are buying and renting out have been around for 60-100 years, they can last another 30 while I get my act together, one year at a time!

      You did very well on your first rental, so you have a bit of high to cruise on. Dont worry, a great deal will come by and you’ll be at it again :-)

  3. Lisa,
    Good blog. You seem comfortable in your presentation. Where in the USA are you located??
    30-40 k price range won’t work in Northern CA.

    Warm regards,
    Mark…

    • Hi Mark,
      I have purchased in OH, VA, and MD. In northern California, I think mobile homes are an option in the 60-80k range, but they still offer decent long term cash flow. And, even where I live now, i travel 1-2 hrs away from my rentals because where I am living is too expensive to cash flow (Arlington, VA, a suburb of DC).

  4. Rob Fitzpatrick on

    Lisa,
    Great advice! One of my favorite books for all new investors just starting out, it is “Building Wealth One House at a Time” by John Schaub. John is an investor who fits the Bigger Pockets mold. He has been investing for 30+ years and he keeps it simple. When you read his books, he is down to earth and keeps it simple. Your advice for somebody who has a career is excellent. For all those out there who think I can’t do real estate investing, one house every year is the best advice. Slow and steady wins the race.

    Thanks Lisa for the video!
    Rob

    • Hi Rob,
      Thank you for the comment! I like the sound of this book, I am going to have to add it to my reading to see if I can get some good ideas. I appreciate the info, and I just hope more people start breaking this down in small chunks. Some people can big from the beginning, but hey, its okay to have a 10 year plan :-) Right? I think so.

      • Rob Fitzpatrick on

        You said it! That is the beauty of real estate. Over the course of 10 years, one house at a time an investor in real estate will be way farther ahead than investing in stocks, bonds or other financial instruments. About 7 years ago, when I evaluated my annual contributions, the rates of return and extrapolated that out to retirement, I came waaaaaaay short of my goals. When I incorporated, real estate and evaluated that over the long term, I determined that I should be able to meet my financial goals and out perform the stock market. Like you said, breaking down your goals into small chunks.

  5. Hi Lisa, this is my plan, start with one. Learn the business. See if I can do this! Then, once one is done and “working”, then I can plan #2. A year seems like the right time frame to get the first one done.

    I wonder if real estate becomes addictive for people and they just can’t stop building their business. I have experienced taking on “too much” in another job and prefer to have a really nice life balance.

    • Hi Karen,
      Its addictive to me…until I run out of money :-) Then that year is enough time to rebuild capital (Saving up for 5-10 months). This is actually my plan, and it is enough time to have worklife balance. I will admit, about 3 months after my renovations and placing a tenant, I do get the itch.

  6. Starting small is definitely the way to start. Many folks starting out have big goals which become so unattainable that sometimes nothing gets achieved. Smaller goals will help people get the experience to see what they like and do not like.

    Honestly, being a buy and hold investor is not for everyone. I know of many seasoned investors who only came to this conclusion after many, many years of experience. Being able to start out small can help folks see their preferences early on. Without the experience, despite smaller goals, it’s very hard to gauge.

    Being able to start out small is one of the reasons why I like my niche. It’s easier to get in and out of a smaller deal than a larger one. In the past, I’ve read horror stories of folks just beginning who have entered into large deals only to find out it was not for them. Some have been able to get out while others were left in a bind. As Shakespeare says, “To each his own!”

    Good advice here Lisa, nice video! :)

    • Thank you Rachel,
      We really should connect some time so I can learn more about your niche!
      Well said! First time investors, I think, can greatly benefit from smaller deals than the larger ones, especially. It gives you a lot of wiggle room to make mistakes without sacrificing security for yourself or your family.

  7. I love it. I am on year three. This year I will be buying my third property. My goal was to have four properties, but now I may change my mind.

    Thank you for sharing.

    • Alain! What a beautiful story, I think its just as great to see you on 3 in year 3, as to see someone with 20 homes in 2 years. Your method is something that resonates with my (and im sure A LOT of others’) actual financial circumstances, knowledge, abilities, confidence level. Of course this grows, but its hows the persistence and long view that will get you to wealth. Thank you for sharing.

    • Hi Patrick! I don’t think there is a right or wrong answer, yes or no to that question. You don’t HAVE to stay at a slow pace, but you can. You don’t HAVE to accelerate your real estate, but you can.

      I like the natural progression: Have this as your goal, but as you go along and feel more confident with each new experience you gain, scale up from there to more homes/multi-families/apts.

  8. Timothy Trewin on

    @ Lisa Phillips

    Thank you for that and it is good to see something that helps keep investing in perspective. I do feel like some want to invest too quickly and that can actually hurt them long term. Again thank you for taking the time to do this video.

    • Yes, when I started out, It would have been more helpful to hear the little guy (thats me now) say its okay to start small but firmly. I don’t always resonate with the breakneck speed of some investors on the site. I admire their ability to scale so quickly, but that really goes against my natural instincts when it comes to risks. Thank you for your comment.

      • Timothy Trewin on

        @ Lisa Phillips,

        You are welcome. There are those who do invest at a rapid pace and it is good for newer investors who think like that, but there are others who share your tolerance level for risk and having someone who is experienced and thinks that way like you is also very refreshing. Much like finding a niche to invest in and focusing on that, knowing your tolerance for risk is also vital and once someone figures that out they need to seek the advice of others who share that mindset.

  9. Shawn Sorter on

    Great video Lisa. This is close to what I started doing about a year ago. My goal was to get 2 properties a year for 10 years, then spend the following 10 years paying them off. I’d be 60 at the end of that and happy to retire or continue working but either way having more money coming in. I’m currently shopping for property number 2, but an upcoming relocation is postponing things just a few months. Thanks for bring up this topic and assuring me I’m not alone in the way I process things.

    • Thank you for your comment! Im glad to hear others are going at the slow and steady pace as well, its not all 0 to 100 in 5 years. Some people DO that successfully, but i think its a disservice not to mention the other more measured and pace of acquisition.

  10. Hey where do you invest in VA? I’m currently a VCU student and I’m going to be getting into the game within the next year once I graduate.

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