What would you do in my position? Feeling like we're ready

[Austin Phelps]

My wife and I (both 27) currently live in Cape Canaveral/Cocoa Beach, FL and make about 250k a year combined with a net worth of about 250k as well. We're looking to begin investing in real estate to increase our income for now and slowly get to the point where this is all we do for a living (tired of corporate jobs). With this base information, what would you all suggest? Initial property price range, strategy, etc. I really appreciate your time and help!

[Billy Daniel]

Hey!  Here's by take on these types of questions:

First, figure out your goals.  Wanting to leave corporate America is great, but it isn't specific enough.  What will that take?  What's the timeframe?  How much risk are you willing to assume?  

Second, find the type of investing that lights you up.  I love long-term rentals.  I also enjoy a flip every now and then.  However, you won't find me messing with short-term rentals or syndications.  Those things don't keep my attention, so I don't bother.  There is a ton of information in these forums.  There are also many books in the bookstore that every investor should read.  Take your time and study up.  

While you're doing that, save save save!  Save up for a nice-sized down payment on something.  When you have your capital saved up, engage with the experts.  Realtors are a great place to start because they can normally point you to the lenders, contractors, inspectors, and property managers you will want to speak with.  

When all this is done, TAKE ACTION!  You can't start real estate investing without making an offer.  The first one will be scary and you will be full of doubts.  Just trust the education you've given yourself and realize that a mistake is not the end of the world.  Continue to move forward and consult your experts.

Good luck and I wish you great success!!

[Sofia Hirani]

The millionaire real estate investor by Gary Keller is a great book.It has helped me.

[Austin Phelps]

Quote from @Billy Daniel:

Hey!  Here's by take on these types of questions:

First, figure out your goals.  Wanting to leave corporate America is great, but it isn't specific enough.  What will that take?  What's the timeframe?  How much risk are you willing to assume?  

Second, find the type of investing that lights you up.  I love long-term rentals.  I also enjoy a flip every now and then.  However, you won't find me messing with short-term rentals or syndications.  Those things don't keep my attention, so I don't bother.  There is a ton of information in these forums.  There are also many books in the bookstore that every investor should read.  Take your time and study up.  

While you're doing that, save save save!  Save up for a nice-sized down payment on something.  When you have your capital saved up, engage with the experts.  Realtors are a great place to start because they can normally point you to the lenders, contractors, inspectors, and property managers you will want to speak with.  

When all this is done, TAKE ACTION!  You can't start real estate investing without making an offer.  The first one will be scary and you will be full of doubts.  Just trust the education you've given yourself and realize that a mistake is not the end of the world.  Continue to move forward and consult your experts.

Good luck and I wish you great success!!

Thank you for taking the time to respond to this! We're currently eyeing long term rentals with doing some updates to it. We've set our budget at about $350k$370k. I'm actually curious to what you would recommend for the size of a down payment. We both have VA loans (0% down) available to us and we're disabled veterans, which eliminates loan fees. I would also like some guidance on location scope mentality as I currently have the mindset (ignorant of course) that the property needs to be in a touristy/prime location. Is that just me being a newbie? Again, I truly appreciate your time and guidance!

[Chad McMahan]

Quote from @Austin Phelps:

Quote from @Billy Daniel:

Hey!  Here's by take on these types of questions:

First, figure out your goals.  Wanting to leave corporate America is great, but it isn't specific enough.  What will that take?  What's the timeframe?  How much risk are you willing to assume?  

Second, find the type of investing that lights you up.  I love long-term rentals.  I also enjoy a flip every now and then.  However, you won't find me messing with short-term rentals or syndications.  Those things don't keep my attention, so I don't bother.  There is a ton of information in these forums.  There are also many books in the bookstore that every investor should read.  Take your time and study up.  

While you're doing that, save save save!  Save up for a nice-sized down payment on something.  When you have your capital saved up, engage with the experts.  Realtors are a great place to start because they can normally point you to the lenders, contractors, inspectors, and property managers you will want to speak with.  

When all this is done, TAKE ACTION!  You can't start real estate investing without making an offer.  The first one will be scary and you will be full of doubts.  Just trust the education you've given yourself and realize that a mistake is not the end of the world.  Continue to move forward and consult your experts.

Good luck and I wish you great success!!

Thank you for taking the time to respond to this! We're currently eyeing long term rentals with doing some updates to it. We've set our budget at about $350k$370k. I'm actually curious to what you would recommend for the size of a down payment. We both have VA loans (0% down) available to us and we're disabled veterans, which eliminates loan fees. I would also like some guidance on location scope mentality as I currently have the mindset (ignorant of course) that the property needs to be in a touristy/prime location. Is that just me being a newbie? Again, I truly appreciate your time and guidance!

FYI, VA financing:

YOU must move into your new home within 60 days of closing. The VA requires that this will be your primary residence; Most VA lenders intend for you to use the property as your primary residence for at least 12 months. Check with your mortgage broker about the occupancy requirements, if your goal is to live there as briefly as possible.

The ideal workaround is a 2+ unit situation, where you can live and rent out part of the home, upstairs/downstairs (or otherwise) separate units, etc. Or rent to roommates.

In order to NOT live there, you need to go with other financing, such as 2nd home or renter financing, DSCR, hard money, or seller carry. As always, check to make sure your intended use matches the lender, state and federal requirements, before getting too deep in the transaction.

[Kevin Whisler]

Quote from @Austin Phelps:

My wife and I (both 27) currently live in Cape Canaveral/Cocoa Beach, FL and make about 250k a year combined with a net worth of about 250k as well. We're looking to begin investing in real estate to increase our income for now and slowly get to the point where this is all we do for a living (tired of corporate jobs). With this base information, what would you all suggest? Initial property price range, strategy, etc. I really appreciate your time and help!

 Flip will be the quickest way out -- especially in an appreciating market like Florida.. conservative states are booming. 

Also could build a rental portfolio for long term wealth, but that takes a little longer. The REI company that I ran acquisitions for did a bit of both.

Here to help you get a second set of eyes on deals if you want. Obviously in the alternative lending space as well.

[Lyndsay Zwirlein]

Read a bunch of books and consume as much info as you can (with a caveat of focusing on people who have been through cycles!!). I really like Kathy Fettke's "Retire Rich with Rentals", David Green "Long Distance Real Estate Investing" and go crazy on Bigger Pockets! There are so many amazing stories on there and you can start to learn about the strategies and figure out what suits your goals best. Good luck! 

[David Van Singel]

I'm going to echo some of what people have said here and give my own experience. On the bright side, you have more than enough cashflow to purchase a property. You have a lot of possible avenues you could go down so it's important to set your goals. 

WHAT? What kind of property are you looking into? Single-family? Duplex? Multi-family? 

WHEN? You mention wanting to be able to leave corporate life. What is your timetable? Do you want to leave your corporate lives in the next 5 years or the next 15 years? How fast would you like to scale?

HOW? How do you plan on financing the property? How much do you want to put down? Do you have a preferred class of neighborhood? Preferred town/city? I see that you want to LTR. Do you plan on self-managing or do you plan on hiring a PM? Do you know how many properties you would eventually want? Depending on your affordability, would you do one nice property or two not as nice properties that you may need to fix up? This may depend on your current time commitments. If you don't have the time, turn-key may be a great option for you.

I realize this is a lot of questions but this needs to be fit to your needs and wants. Speaking from the perspective of an agent, I would love to sell you tons of property but that might not be the right situation for you.
 

[Jevon Shaw]

Quote from @Billy Daniel:

Hey!  Here's by take on these types of questions:

First, figure out your goals.  Wanting to leave corporate America is great, but it isn't specific enough.  What will that take?  What's the timeframe?  How much risk are you willing to assume?  

Second, find the type of investing that lights you up.  I love long-term rentals.  I also enjoy a flip every now and then.  However, you won't find me messing with short-term rentals or syndications.  Those things don't keep my attention, so I don't bother.  There is a ton of information in these forums.  There are also many books in the bookstore that every investor should read.  Take your time and study up.  

While you're doing that, save save save!  Save up for a nice-sized down payment on something.  When you have your capital saved up, engage with the experts.  Realtors are a great place to start because they can normally point you to the lenders, contractors, inspectors, and property managers you will want to speak with.  

When all this is done, TAKE ACTION!  You can't start real estate investing without making an offer.  The first one will be scary and you will be full of doubts.  Just trust the education you've given yourself and realize that a mistake is not the end of the world.  Continue to move forward and consult your experts.

Good luck and I wish you great success!!

 To add onto the great advice Billy gave, allow yourself some trial and error to figure what you want your niche in real estate to be. I love long term rentals as well, but not everyone wants to be a landlord or get a property manager. Some people prefer flips, some prefer commercial deals!

[Wale Lawal]

@Austin Phelps

Just make sure to consume contents here as much as possible and feel free to ask any questions you may have. We are here to help each other grow.

Get as much knowledge and experience as possible and find a mentor.

Join real estate investment clubs.

Get in touch with a local agent or investor and shorten your learning curve and save you a lot of headaches as they tend to understand the market better.

All the best!

[Billy Daniel]

Quote from @Austin Phelps:

Quote from @Billy Daniel:

Hey!  Here's by take on these types of questions:

First, figure out your goals.  Wanting to leave corporate America is great, but it isn't specific enough.  What will that take?  What's the timeframe?  How much risk are you willing to assume?  

Second, find the type of investing that lights you up.  I love long-term rentals.  I also enjoy a flip every now and then.  However, you won't find me messing with short-term rentals or syndications.  Those things don't keep my attention, so I don't bother.  There is a ton of information in these forums.  There are also many books in the bookstore that every investor should read.  Take your time and study up.  

While you're doing that, save save save!  Save up for a nice-sized down payment on something.  When you have your capital saved up, engage with the experts.  Realtors are a great place to start because they can normally point you to the lenders, contractors, inspectors, and property managers you will want to speak with.  

When all this is done, TAKE ACTION!  You can't start real estate investing without making an offer.  The first one will be scary and you will be full of doubts.  Just trust the education you've given yourself and realize that a mistake is not the end of the world.  Continue to move forward and consult your experts.

Good luck and I wish you great success!!

Thank you for taking the time to respond to this! We're currently eyeing long term rentals with doing some updates to it. We've set our budget at about $350k$370k. I'm actually curious to what you would recommend for the size of a down payment. We both have VA loans (0% down) available to us and we're disabled veterans, which eliminates loan fees. I would also like some guidance on location scope mentality as I currently have the mindset (ignorant of course) that the property needs to be in a touristy/prime location. Is that just me being a newbie? Again, I truly appreciate your time and guidance!

 Your down payment needs to be what you are comfortable with and makes your analysis work.  Your lender will have requirements as well.  I do recommend using debt to buy your properties.  I'd rather make a 20% down payment on 5 properties than a 100% down payment on a single property.

When it comes to location, again it depends on your situation and preferences.  I personally prefer colleges because there will always be students.  Some prefer large medical centers or other high density job locations.  Some prefer touristy spots.  In the end, what really matters is the numbers work out and you understand what you are getting into!

[Austin Phelps]

Quote from @David Van Singel:

I'm going to echo some of what people have said here and give my own experience. On the bright side, you have more than enough cashflow to purchase a property. You have a lot of possible avenues you could go down so it's important to set your goals. 

WHAT? What kind of property are you looking into? Single-family? Duplex? Multi-family? 

WHEN? You mention wanting to be able to leave corporate life. What is your timetable? Do you want to leave your corporate lives in the next 5 years or the next 15 years? How fast would you like to scale?

HOW? How do you plan on financing the property? How much do you want to put down? Do you have a preferred class of neighborhood? Preferred town/city? I see that you want to LTR. Do you plan on self-managing or do you plan on hiring a PM? Do you know how many properties you would eventually want? Depending on your affordability, would you do one nice property or two not as nice properties that you may need to fix up? This may depend on your current time commitments. If you don't have the time, turn-key may be a great option for you.

I realize this is a lot of questions but this needs to be fit to your needs and wants. Speaking from the perspective of an agent, I would love to sell you tons of property but that might not be the right situation for you.
 

 This helps so much, so thank you for taking the time to provide input. I'm very process driven, so implementing these questions into our initial decision and vetting process. Lots of stuff to think about and put on paper. If we decide to aim at property in Orlando I'll be sure to let you know!

[Austin Phelps]

Quote from @Kevin Whisler:

Quote from @Austin Phelps:

My wife and I (both 27) currently live in Cape Canaveral/Cocoa Beach, FL and make about 250k a year combined with a net worth of about 250k as well. We're looking to begin investing in real estate to increase our income for now and slowly get to the point where this is all we do for a living (tired of corporate jobs). With this base information, what would you all suggest? Initial property price range, strategy, etc. I really appreciate your time and help!

 Flip will be the quickest way out -- especially in an appreciating market like Florida.. conservative states are booming. 

Also could build a rental portfolio for long term wealth, but that takes a little longer. The REI company that I ran acquisitions for did a bit of both.

Here to help you get a second set of eyes on deals if you want. Obviously in the alternative lending space as well.

Yeah flipping sounds fun and seems interesting. I'm just blessed that we made it to Florida as we're Californian refugees :D. Maybe flipping first to get the overall process down from vetting, buying, fixing, and selling would be a good starting route and moving into LTR from there. If I need any help during the due diligence process, I'll be sure to hit you up! Thanks for taking the time to provide guidance!

[Austin Phelps]

Quote from @Billy Daniel:

Quote from @Austin Phelps:

Quote from @Billy Daniel:

Hey!  Here's by take on these types of questions:

First, figure out your goals.  Wanting to leave corporate America is great, but it isn't specific enough.  What will that take?  What's the timeframe?  How much risk are you willing to assume?  

Second, find the type of investing that lights you up.  I love long-term rentals.  I also enjoy a flip every now and then.  However, you won't find me messing with short-term rentals or syndications.  Those things don't keep my attention, so I don't bother.  There is a ton of information in these forums.  There are also many books in the bookstore that every investor should read.  Take your time and study up.  

While you're doing that, save save save!  Save up for a nice-sized down payment on something.  When you have your capital saved up, engage with the experts.  Realtors are a great place to start because they can normally point you to the lenders, contractors, inspectors, and property managers you will want to speak with.  

When all this is done, TAKE ACTION!  You can't start real estate investing without making an offer.  The first one will be scary and you will be full of doubts.  Just trust the education you've given yourself and realize that a mistake is not the end of the world.  Continue to move forward and consult your experts.

Good luck and I wish you great success!!

Thank you for taking the time to respond to this! We're currently eyeing long term rentals with doing some updates to it. We've set our budget at about $350k$370k. I'm actually curious to what you would recommend for the size of a down payment. We both have VA loans (0% down) available to us and we're disabled veterans, which eliminates loan fees. I would also like some guidance on location scope mentality as I currently have the mindset (ignorant of course) that the property needs to be in a touristy/prime location. Is that just me being a newbie? Again, I truly appreciate your time and guidance!

 Your down payment needs to be what you are comfortable with and makes your analysis work.  Your lender will have requirements as well.  I do recommend using debt to buy your properties.  I'd rather make a 20% down payment on 5 properties than a 100% down payment on a single property.

When it comes to location, again it depends on your situation and preferences.  I personally prefer colleges because there will always be students.  Some prefer large medical centers or other high density job locations.  Some prefer touristy spots.  In the end, what really matters is the numbers work out and you understand what you are getting into!

 Thanks for this perspective. We're in a touristy area since we're on Space Coast, so hoping to leverage that weather it's aerospace employees, like myself, or tourists. 

[Eliott Elias]

Go after cash flow, BRRRR and flips are not going to cut it for you. You need steady cash flow, it's what will keep you from drowning.

[John Morgan]

@Austin Phelps

20% down on a SFH in a working class neighborhood (C+ class hood). Your cash flow will be good and appreciation is the highest with starter type homes due to low inventory. And turnovers will be almost zero since most of these people won't be able to afford or qualify to buy a home of their own. Keep repeating. They'll be with you for years/decades and pay off your mortgages. Refinance after 3-5 years after they've appreciated and use that cash to buy more and more. This is my strategy and I've been able to buy 2 rentals a year for 8 years with way less income than you. Good luck!

[Austin Phelps]

Quote from @John Morgan:

@Austin Phelps

20% down on a SFH in a working class neighborhood (C+ class hood). Your cash flow will be good and appreciation is the highest with starter type homes due to low inventory. And turnovers will be almost zero since most of these people won't be able to afford or qualify to buy a home of their own. Keep repeating. They'll be with you for years/decades and pay off your mortgages. Refinance after 3-5 years after they've appreciated and use that cash to buy more and more. This is my strategy and I've been able to buy 2 rentals a year for 8 years with way less income than you. Good luck!

 Wow! That's an amazing roadmap. Thanks for that! What type of loans do you usually go after?

[Holly Hudson]

Every one has offered great advice so there's no need for me to repeat it.  In my opinion, you are in an excellent area as it offers many of the different routes you could take.  Cocoa Beach allows short term rentals and you have the tourism from the beach, multiple space programs, close to Orlando... You also have the LTR option from the space programs, school districts, and larger corporations that are moving here.  As you know, in Brevard County, there are quite a few areas that would benefit both you, and the community, for fix and flips.  And we have multi units where you could do one or all of the above. 

Take your time, read the books and forums, continue to ask for help and advice, start talking with lenders, and have fun!  

[Willie Herring]

Don't quit your W-2 until you have the cash flow to replace it!!! Its all about CASH FLOW. It's just that simple. 

[Tchaka Owen]

Quote from @Austin Phelps:

My wife and I (both 27) currently live in Cape Canaveral/Cocoa Beach, FL and make about 250k a year combined with a net worth of about 250k as well. We're looking to begin investing in real estate to increase our income for now and slowly get to the point where this is all we do for a living (tired of corporate jobs). With this base information, what would you all suggest? Initial property price range, strategy, etc. I really appreciate your time and help!

Lots of great advice provided already by other BP members! I'll add the following tidbits:

1. One of the best routes to wealth through REI is via multi-units; the downside to Brevard is the limited number. Compared to many areas, Brevard lacks. However, that's not the only path to success.

2. If you and your wife do decided to invest in Brevard, I see lots of upside (that's one of the reasons I moved here). The area got crushed at the end of the Shuttle program, a decade ago homes could be picked up for close to nothing. However, the space industry is booming. NASA isn't the only game in town and there are large tech companies here too (many in support) so Brevard isn't dependent on tourism. The county has a number of good schools, which is important to attracting brainpower. And though prices have gone up significantly, they're not as highs as in other areas. 

3. You'll want to attend some of the local REIA meetings to gain contacts and help get a feel of the local vibe. 

Good luck!

Tchaka 

[John Morgan]

Quote from @Austin Phelps:

Quote from @John Morgan:

@Austin Phelps

20% down on a SFH in a working class neighborhood (C+ class hood). Your cash flow will be good and appreciation is the highest with starter type homes due to low inventory. And turnovers will be almost zero since most of these people won't be able to afford or qualify to buy a home of their own. Keep repeating. They'll be with you for years/decades and pay off your mortgages. Refinance after 3-5 years after they've appreciated and use that cash to buy more and more. This is my strategy and I've been able to buy 2 rentals a year for 8 years with way less income than you. Good luck!

 Wow! That's an amazing roadmap. Thanks for that! What type of loans do you usually go after?

I did my first 10 with conventional loans. Then my last 6 with commercial and DSCR non QM no doc loans. Go with conventional first. Once you tap out with 10 then get them in your LLC with commercial or DSCR loans. Good luck!

[Wendy Vaidic]

Hi there!  Cocoa Beach is great for short-term rentals, but if you're looking at long-term rentals I would choose a different area.  The prices have appreciated significantly in Cocoa Beach as a result of investors setting up short-term rentals, and although the long-term rents have increased there it has not kept up with the increase in home prices.  

I would look at areas around Eastern Florida State College and FIT as you have the students as well as the families to rent to.  Look into zoning though to be sure they allow unrelated individuals to live together (students).  I know some neighborhoods by FIT do not.

As far as VA loans go, do you currently own a home that you could turn into a rental and then move to another home using a VA loan? Conserving cash will give you more options along the way.

Good Luck & let me know if you have any questions.

[Dwayne Byrd]

I'm a real estate broker in Brevard County. Everyone has given great information. The thing about it is that it will be really hard to "increase your income" looking for cash flows with a small number of properties. The increasing of income will come from having several properties that cash flow, or by refinancing and or selling and leveraging as you get equity. There are a ton of ways to look at it, approach it and solve what you are trying to do. You just have to figure out that the path that you are most comfortable with. The best advice I was once given was to "DO SOMETHING" don't over analyze it to the point to where you are a year or two on the sideline. Make SOMETHING happen :) 

As others have mentioned, Definitely sort through the VA portion as those loans are for Owner Occupants. Also, although they are "0 down", there are still considerable fees associated with them even the VA funding fee ect. Double check with your lender.