Starting Out

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Mick Murray
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Mid-life, starting from 0, setting good goals

Mick Murray
Posted Sep 27 2022, 13:13

So grateful for this site and community... this information is already starting to change our lives by giving us a new mindset and optimism as we look to build wealth.  

I'm about to turn 40, wife, 4 kids.  We have worked in the non-profit space for 17 years earning very little income but enjoying what we do in helping people.  To my embarrassment, I have not thought much about our family's financial future.  The pain is heating up, however, as our kids grow and expenses balloon.  

I earn about 60k/yr after taxes.  My wife just got her real estate license a year ago and is netting nearly 50k after year 1.  

Our income statement looks like: 
Income: about 9400/mo
Expenses: about 10,750/mo (which includes 4 kids in private school... a conscious choice we've made and are sticking to for now)

Our balance sheet is pretty bare.  Maybe 60k in equity in our home.  No liabilities to speak of (cars are paid off... no other doodads to use Kiyosaki-speak).  We have no cash to invest in a property unless we were to dip into our emergency fund, which can cover about 3 mos of expenses.  And you can see our monthly expenses are more than our income.  

Bottom line, I'm feeling the pinch and the anger at myself for allowing our family to be in this position at this stage of life.  But we have toyed with RE investing and it has come front and center in the last month or two.  We have several friends with capital who believe in us and are willing to go in on a deal or two.  And RDPD + Bigger Pockets has put some wind in my sail to see a way forward.

Questions: 

- How should I go about researching how to structure deals with partners where they are bringing the capital and I am providing the sweat equity (in terms of distribution of cash flow, depreciation, contingencies, exit strategies, etc.)?  Any tips here would be MOST appreciated. 

- I would love to be generating about 10k in cash flow 10 years from now. Is this goal too ambitious? Not ambitious enough? I don't plan on leaving my W2 non-profit job any time soon, so RE investing would be on top of that... though I do have more flexibility than most when it comes to my schedule within a FT job. 

- Any other tips for a newbie in my stage of life / situation?  I'm all ears!  

Thank you!

Waco, Texas

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Ron Brady
  • Rental Property Investor
  • Burlington County, NJ
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Ron Brady
  • Rental Property Investor
  • Burlington County, NJ
Replied Sep 27 2022, 13:40

@Mick Murray

Congratulations for making the leap. My wife and I started real estate investing after age 50, so to us, you and your wife are very much ahead of the game. And we too came from the non-profit world our entire careers.

To your Qs, here are our two cents:

Partnerships - Typically it is a veteran investor with the funds of others, not a new investor with other's funds. To be candid, knowing what we do today--8 properties in--we would not be comfortable investing with private money when we started out. We felt the same way when we started. We simply made too many rookie mistakes that would have lost our investors money. Not saying you should not do it, but we wouldn't. As an alternative, we'd recommend you consider a HELOC or cash-out refinance as a means to take as much equity from your home as you can as your starting capital. Small capital starting point strategies we'd recommend you to consider are short term renting a room in your home, mid-term rental using arbitrage or wholesaling. Once you have enough cash on hand, you can drop the start-up strategy and choose another one.

$10k/yr in 10 yrs - Not too ambitious, depending on how much time you and your wife can put into the work. Short term rentals generate big cash flow fast, but require lots of time. Single family long term buy and holds, generate far less cash but are more passive. Thus your cash flow goal and strategy are related.

Other tips: Keep reading the BP Forums and listening to the podcasts, consider joining a local REIA and try out https://podcasts.apple.com/ca/... which caters to old dawg's like me (and maybe you).

Best wishes to you!

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Aj Parikh
  • Rental Property Investor
  • Centreville, VA
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Aj Parikh
  • Rental Property Investor
  • Centreville, VA
Replied Sep 27 2022, 13:46

One of the easiest ways to get started in real estate is working with turnkey companies and investing out of state in some of the Midwest states where cash flow and appreciation is steady. If you have a full time job and you are not able to take out active time in Real Estate, working with a turnkey company is the best way to stay passive and start creating a portfolio. 

Feel free to connect if that is something you want to explore 

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Dan White
  • Flipper/Rehabber
  • Haymarket
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Dan White
  • Flipper/Rehabber
  • Haymarket
Replied Sep 27 2022, 14:17
Quote from @Ron Brady:

@Mick Murray

Congratulations for making the leap. My wife and I started real estate investing after age 50, so to us, you and your wife are very much ahead of the game. And we too came from the non-profit world our entire careers.

To your Qs, here are our two cents:

Partnerships - Typically it is a veteran investor with the funds of others, not a new investor with other's funds. To be candid, knowing what we do today--8 properties in--we would not be comfortable investing with private money when we started out. We felt the same way when we started. We simply made too many rookie mistakes that would have lost our investors money. Not saying you should not do it, but we wouldn't. As an alternative, we'd recommend you consider a HELOC or cash-out refinance as a means to take as much equity from your home as you can as your starting capital. Small capital starting point strategies we'd recommend you to consider are short term renting a room in your home, mid-term rental using arbitrage or wholesaling. Once you have enough cash on hand, you can drop the start-up strategy and choose another one.

$10k/yr in 10 yrs - Not too ambitious, depending on how much time you and your wife can put into the work. Short term rentals generate big cash flow fast, but require lots of time. Single family long term buy and holds, generate far less cash but are more passive. Thus your cash flow goal and strategy are related.

Other tips: Keep reading the BP Forums and listening to the podcasts, consider joining a local REIA and try out https://podcasts.apple.com/ca/... which caters to old dawg's like me (and maybe you).

Best wishes to you!


 This is a great well thought out answer. All great advice. 

The only thing I would add is to find out your long term and short term goals. I flip full time for income taking the leap at 48 years old - another old dog. 

My business partner and I worked on getting flips done as our primary income generator and have found buy and holds as we progressed through the last 2 years. 

Our long term goal is to keep flipping and invest in Multifamily opportunities with our excess revenue. This is more appealing to us since we don't really enjoy being landlords. It is not for everyone. We are hoping that after a few more years we will have enough money invested to have that Multifamily income completely be our only income. 

Bottomline is that there are multiple paths to financial freedom through REI.

Keep digging and see what fits you and your goals best. 

To answer your 1st question: You can get capital through hard money lenders. You will need some skin in the game on the first couple that you do. Usually they will do 80% and you need to have 20%. But they are taking the risk with the biggest portion. They will also be an amazing sounding board for a deal's viability. They won't fund a bad deal. If you are looking to flip this is the way to go. If you looking for a buy and hold you still may have to get some non traditional lending to get going. But still expect to put 20% down. 

Best of luck - reach out anytime with any questions.

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Mick Murray
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Mick Murray
Replied Sep 27 2022, 19:22

@Dan White and @Ron Brady thank you!

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