About to start sanity check

[Lee Whitford]

BP Family,
As I am about to enter the Real Estate journey I thought id put my baseline COA out there and see if the minds more experienced than mine can see any areas I might be missing or not considering in my plan. I am in Sterling, VA.

In order to get started, i will be using 1031 funds from my recent home sell to purchase 2-5 properties (4-10 units total) no farther than 2 hours from my primary residence for LTR. Real Estate has a very expensive barrier to entry in the immediate area. This will still allow me to do the property management myself so that i can learn as much as possible before handing over the reigns to a PM company, making those decisions with a bit more knowledge and experience.  The properties have to meet a certain criteria as far as being able to immediately host tenants , no major reno needed, etc. Is there anything else i need to consider as i push through? Are there any major gaps in my COA?

I will admit that as i get closer to finally starting (the sale of the house is already underway, as is the 1031 attorneys, and identifying replacement properties) i do find myself beginning to worry or second guessing. However, understanding that a major part of failing is never starting so i am eager to really get going!

Thanks for reading and any input!

[Nathan Gesner]

If you're not a little bit nervous, then it may be that you're too cocky or ignorant to catch a mistake. Nervous is OK.

I think you're doing it backwards. Most people make their biggest mistakes when they are starting out. It doesn't take much to cost you tens of thousands of dollars in lost revenue. My suggestion is to hire a property manager up front. Let them get the ball rolling and stabilized. Learn from them. Read books and talk on the forum to better understand why the PM screens the way they do, how they handle late rent, what to do when the tenant wants to break the lease early, when to allow pets or not, etc. Build a foundational understanding of what it takes to take over management, then do it.

This also helps you financially. If you can find a cash flowing property while including management, ending management will increase your income 10%. And if you decide to keep PM, at least you know the property will cash flow. If you start without PM and have to add it later, it may put you in a negative cash flow.