Feeling like I am stagnating with early success.
I am 22 years old and a licensed Realtor in Lafayette, IN. I am currently looking for my next investment opportunity while also working to help new clients who are focused on building generational wealth through Real Estate.
With the market being scarce at least on the listing side of things, what are some daily practices you have taken on to ensure that you are still moving forward even when it may feel as though you are just spinning your wheels?
Right now I have had a lot of time available to read many books on finance/investment/real estate, but am having a hard time deciding where the most impactful area would be to take action. I am living in one half of a duplex, which would cashflow at a minimum of $800 once I move out, so I am eager to find the next opportunity to be able to take advantage of this cash flow. I have received $7,000 so far that is set aside for expenses in high-yield savings as the property will likely need an HVAC and Roof Replacement in the future. HVAC is budgeted as a $16-18k expense to entirely replace both units (worst case scenario) and then the roof is budgeted for $12k. I have cash liquid beyond the income from the property I can draw from if necessary but I like to keep it separate and just let the CapEx account build.
The real estate sales that I have done so far have been all from family relationships and family friends and I am looking to expand my reach to help more people in the real estate industry. With the slow market, I am having a hard time finding balance between committing to either RE sales, or my Full-time job that requires about 85hrs/week, and looking for investment opportunities. Does anyone have any advice from a similar experience?
Was in a very similar place about a year ago. House hacked a 3 family that cash flowed about $1k/month when I moved out. Was super eager for the next move but felt I was spinning my tires looking for it. Was searching everywhere for another multifamily to house hack but the market had gotten crazy in my area. Had already done a cash out refi so couldn't pull anymore money out. Thought about flipping, tried for off market deals, but wasn't working. I finally broke through when I decided to consider something I never thought I would, I started considering selling the house I hacked.
It was a great investment with easy cash flow so I never thought I would want to sell it, but I decided to entertain the idea and really think about ALL my options. I realized that the equity I had in the property was enough to put 20% down on a short term rental that would 2x or even 3x my cash flow, and have additional cash leftover.
So I sold the multi I thought I would be holding for years and the last 6 months have been great. Hard work, but great. I'm doing something new in the REI world and making much more money with my new property than the multifamily (for more effort but still worth it).
Not telling you that you should sell your property, everyone's scenario is different. But if you hadn't considered whether you could get a better return on equity in another market, or another investing method, it may be worth looking into and it may get your REI journey moving again.
Hi Ryan,
Stay ready! Even in this market, there are deals to be found every day that can offer strong CF returns. In a sellers market like this, you may have to work to find deals in less conventional ways, and this all starts with networking.
If you're very busy, and already staring at about $30k in CapEx, you could consider selling your house hack and 1031'ing it into something with larger CFs.
Ryan, I felt that way as well not too long ago. You and I have a lot in common. My first Invesmtent was also house hacking. I think in this market, you could find a rental that needs some repairs, bring up the value, and then rent it out. Down the line, you could always sell it but I would rent it out and depreciate it.
I also think the right flip would benefit you! I have a construction team and investors and we usually have 2 flips going at one time. I'd love to work with you and find the right property to invest it. I have the team, just looking for the right agent to work alongside me!
Message me!
Hey @Ryan Ness - that is life, it has its ups and downs. I'm only a few years ahead of you and can relate to what you've mentioned.
You may not like to hear this, but nothing comes super fast or easy. The opinion I have is whether you've figured out what your actual long term goals are, and it's ok if you haven't, you're 22.
I only say that because when I was in a similar position, I couldn't devote my time to everything I wanted to do, and realized that only when I started cutting things out I could really go deep into what was for me. I quit my job and got my real estate license because I knew I wanted to be in real estate long term as an investor and real estate player. Doing it full time has led me to connect with other moves & shakers that I wouldn't have been able to had I still had a fulltime job and invested on the side.
I'm not saying this is what you have to do, but it will help you to get some more clarity about your long term goals and work backwards from there. I've yet to meet someone with a W2 that also has a real estate empire. Nothing wrong with a good job and salary, but it just took time away from what really excited me :)
-
Real Estate Agent New York (#10401359681)
- 929-349-8042
- http://www.ClosedByMo.com
- [email protected]
Quote from @Brandon Gale:
Was in a very similar place about a year ago. House hacked a 3 family that cash flowed about $1k/month when I moved out. Was super eager for the next move but felt I was spinning my tires looking for it. Was searching everywhere for another multifamily to house hack but the market had gotten crazy in my area. Had already done a cash out refi so couldn't pull anymore money out. Thought about flipping, tried for off market deals, but wasn't working. I finally broke through when I decided to consider something I never thought I would, I started considering selling the house I hacked.
It was a great investment with easy cash flow so I never thought I would want to sell it, but I decided to entertain the idea and really think about ALL my options. I realized that the equity I had in the property was enough to put 20% down on a short term rental that would 2x or even 3x my cash flow, and have additional cash leftover.
So I sold the multi I thought I would be holding for years and the last 6 months have been great. Hard work, but great. I'm doing something new in the REI world and making much more money with my new property than the multifamily (for more effort but still worth it).
Not telling you that you should sell your property, everyone's scenario is different. But if you hadn't considered whether you could get a better return on equity in another market, or another investing method, it may be worth looking into and it may get your REI journey moving again.
Thank you for the tips from your personal experience. This is my first one, and actually my primary residence so I actually kinda like the idea that I can move out and could even live in another country if I wanted to with it spinning off $800 in cashflow, so I have a hard time considering selling it. I only have maybe $35k invested in it, and on the cash reserves side of things, I have enough for any major repair, and while being employed full-time, I am still adding to that pile. The market around me has been super dry over the past 2 years though, with many of the homes just not having the numbers work out. Maybe I am limiting myself too in that I could move maybe 1 hour away and buy a 4plex that cashflows enough to make it worthwhile to either extend my daily commute to work, or find work in that new location.
Quote from @Jonathan Aversano:
Hi Ryan,
Stay ready! Even in this market, there are deals to be found every day that can offer strong CF returns. In a sellers market like this, you may have to work to find deals in less conventional ways, and this all starts with networking.
If you're very busy, and already staring at about $30k in CapEx, you could consider selling your house hack and 1031'ing it into something with larger CFs.
I guess I hadn't considered the 1031 opportunity and will definitely keep that card up my sleeve for future opportunities. I don't mind being too crazy patient since that is what made my first one such a homerun. Thank you for the helpful tip!
#5 Market Trends & Data Contributor
- Rental Property Investor
- Indianapolis, IN
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#5 Market Trends & Data Contributor
- Rental Property Investor
- Indianapolis, IN
I love what @Brandon Gale mentioned. We're in a similar situation with buy/hold SF rentals in Indy.
We struggle to find properties that pencil out. I don't have massive deal flow or a marketing budget and frankly I don't care. I moved to a C-class neighborhood to buy cheap houses. Nothing is cheap anymore. We have a few doors (all BRRRR-ish deals). I'm in the camp of holding for life but we have decided to list our primary and buy another. I think capitalizing on the heavy lifting completed when I bought the property makes MORE SENSE than renting it out watching it get torn up as a rental. It's over renovated anyways. The equity and tax savings justifies selling and hunting for the next opportunity.
Quote from @Mohammed Rahman:
Hey @Ryan Ness - that is life, it has its ups and downs. I'm only a few years ahead of you and can relate to what you've mentioned.
You may not like to hear this, but nothing comes super fast or easy. The opinion I have is whether you've figured out what your actual long term goals are, and it's ok if you haven't, you're 22.
I only say that because when I was in a similar position, I couldn't devote my time to everything I wanted to do, and realized that only when I started cutting things out I could really go deep into what was for me. I quit my job and got my real estate license because I knew I wanted to be in real estate long term as an investor and real estate player. Doing it full time has led me to connect with other moves & shakers that I wouldn't have been able to had I still had a fulltime job and invested on the side.
I'm not saying this is what you have to do, but it will help you to get some more clarity about your long term goals and work backwards from there. I've yet to meet someone with a W2 that also has a real estate empire. Nothing wrong with a good job and salary, but it just took time away from what really excited me :)
This is far too true and hits all of the nails right on the head. I told myself that I would pursue Real Estate full-time once I got this house hack rented out, but I found that it was actually better to continue my full-time work and sell RE on the side for added income. This worked out better than I thought it would since the added income has helped bring me to the point of having to worry a LOT less about potential repairs for the home. I have all major repairs that are upcoming covered, and steady rent coming in each month.
I definitely have viewed the potential on the other side such as jumping into RE full time and how it has led you "to connect with other moves & shakers that I wouldn't have been able to had I still had a fulltime job and invested on the side". This has been the voice in my head that always tells me that I am potentially missing out on a deal that I could have had, had I connected with a person, but in reality, I may actually have more time than I think I do...procrastination is not good. I have been looking on the MLS and in my current market, the opportunities I am seeing just don't pencil out just yet, but if I learned anything from this first deal, patience is key for sure. It took 2 years to get my first, but if it takes another 2, and I get the same cashflow opportunity, it will be well worth it!
To your last paragraph: I always play the mental game of whether burning the ships is what will set the fire in motion. While I don't have many years of experience in jobs (maybe 7 at this point, and all entry-level), I honestly do not know how I respond to burning the ships and have always thought it would be a fun experiment.
Quote from @Jaron Walling:
I really love what @Brandon Gale mentioned. We're in a similar situation with buy/hold SF rentals in Indy.
We struggle (1st world problems) to find properties that pencil out. We only have a few doors (all BRRRR-ish deals) and I want to scale. I'm in the camp of holding for life (bias on Indiana) but we decided to sell our primary and buy another. I think capitalizing on the heavy lifting completed when I bought the property makes MORE SENSE than renting it out watching it get torn up as a rental. It's a bit over renovated. The equity and tax savings (2/5 years primary exclusion) justifies selling and hunting for the next property.
I was in the camp of holding for life when I bought this one, and with the solid cashflow, I still have a hard time moving away from that goal unless an even better opportunity arose. I still really like my interest rate though. From what my CPA said, it also saved me a ton on taxes this past year too! With my W2, and maybe $16k in RE sales income, I paid almost no taxes, which was pretty new to me coming from mainly getting refunds in the W2 world and always being told that real estate can help save on taxes.
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#5 Market Trends & Data Contributor
- Rental Property Investor
- Indianapolis, IN
@Ryan Ness That fact you own a cash-flowing duplex at 22 y/o is crazy! I wouldn't sell. Affordable multiple-family is dried up and hard to find. You'll struggle to find a deal that replaces the benefits you're getting today (taxes, cash-flow, reserves piling up, location, etc.).
I've been investing for a few years (distressed SFH) and haven't made much money. Everything cash-flows but it's lunch money compared to market appreciation and forced equity via rehabs. We did the cash-out refinances but that $$$ went right back into the next deal or paid off bad debts.
If you're trying to time the market... just stop. Keep working the 9-5 job, networking, and selling properties as your side hustle. Real estate agents take on the least amount of risk. I bought my first house at 30 y/o. You have an 8 year head start!
Quote from @Jaron Walling:
@Ryan Ness That fact you own a cash-flowing duplex at 22 y/o is crazy! I wouldn't sell. Affordable multiple-family is dried up and hard to find. You'll struggle to find a deal that replaces the benefits you're getting today (taxes, cash-flow, reserves piling up, location, etc.).
I've been investing for a few years (distressed SFH) and haven't made much money. Everything cash-flows but it's lunch money compared to market appreciation and forced equity via rehabs. We did the cash-out refinances but that $$$ went right back into the next deal or paid off bad debts. If and when we selling our current primary will I experience actual money.
If you're trying to time the market... don't waste your time. Keep working, grinding, and selling properties in your spare time. Real estate agents take on the least amount of risk!
Thank you for all of the kind words! There are still quite a few flippers in my market (I drive past the houses every day), but I know that with how thing have worked with this investment, I probably would never flip unless it ended up being a cash flowing property that was too good of a deal to not sell, but that would probably be considered a "long-term flip" at that point.
Quote from @Ryan Ness:
Quote from @Mohammed Rahman:
Hey @Ryan Ness - that is life, it has its ups and downs. I'm only a few years ahead of you and can relate to what you've mentioned.
You may not like to hear this, but nothing comes super fast or easy. The opinion I have is whether you've figured out what your actual long term goals are, and it's ok if you haven't, you're 22.
I only say that because when I was in a similar position, I couldn't devote my time to everything I wanted to do, and realized that only when I started cutting things out I could really go deep into what was for me. I quit my job and got my real estate license because I knew I wanted to be in real estate long term as an investor and real estate player. Doing it full time has led me to connect with other moves & shakers that I wouldn't have been able to had I still had a fulltime job and invested on the side.
I'm not saying this is what you have to do, but it will help you to get some more clarity about your long term goals and work backwards from there. I've yet to meet someone with a W2 that also has a real estate empire. Nothing wrong with a good job and salary, but it just took time away from what really excited me :)
This is far too true and hits all of the nails right on the head. I told myself that I would pursue Real Estate full-time once I got this house hack rented out, but I found that it was actually better to continue my full-time work and sell RE on the side for added income. This worked out better than I thought it would since the added income has helped bring me to the point of having to worry a LOT less about potential repairs for the home. I have all major repairs that are upcoming covered, and steady rent coming in each month.
I definitely have viewed the potential on the other side such as jumping into RE full time and how it has led you "to connect with other moves & shakers that I wouldn't have been able to had I still had a fulltime job and invested on the side". This has been the voice in my head that always tells me that I am potentially missing out on a deal that I could have had, had I connected with a person, but in reality, I may actually have more time than I think I do...procrastination is not good. I have been looking on the MLS and in my current market, the opportunities I am seeing just don't pencil out just yet, but if I learned anything from this first deal, patience is key for sure. It took 2 years to get my first, but if it takes another 2, and I get the same cashflow opportunity, it will be well worth it!
To your last paragraph: I always play the mental game of whether burning the ships is what will set the fire in motion. While I don't have many years of experience in jobs (maybe 7 at this point, and all entry-level), I honestly do not know how I respond to burning the ships and have always thought it would be a fun experiment.
Dude - we're both still young. You can go bankrupt every year and burn every ship whenever you want and still be able to recover through your 30s & 40s.
On the point of working in jobs, it has absolutely come into play now that I'm in real estate full time. The time management and organizational skills I learn through my career in corporate & software sales is crucial in real estate - so is the ability to talk and connect with people.
Don't discount any trajectory, every single experience can be looked at from the perspective of learning.
All the best and reach out if you'd like to connect.
-
Real Estate Agent New York (#10401359681)
- 929-349-8042
- http://www.ClosedByMo.com
- [email protected]
Quote from @Ryan Ness:
I am 22 years old and a licensed Realtor in Lafayette, IN. I am currently looking for my next investment opportunity while also working to help new clients who are focused on building generational wealth through Real Estate.
With the market being scarce at least on the listing side of things, what are some daily practices you have taken on to ensure that you are still moving forward even when it may feel as though you are just spinning your wheels?
Right now I have had a lot of time available to read many books on finance/investment/real estate, but am having a hard time deciding where the most impactful area would be to take action. I am living in one half of a duplex, which would cashflow at a minimum of $800 once I move out, so I am eager to find the next opportunity to be able to take advantage of this cash flow. I have received $7,000 so far that is set aside for expenses in high-yield savings as the property will likely need an HVAC and Roof Replacement in the future. HVAC is budgeted as a $16-18k expense to entirely replace both units (worst case scenario) and then the roof is budgeted for $12k. I have cash liquid beyond the income from the property I can draw from if necessary but I like to keep it separate and just let the CapEx account build.
The real estate sales that I have done so far have been all from family relationships and family friends and I am looking to expand my reach to help more people in the real estate industry. With the slow market, I am having a hard time finding balance between committing to either RE sales, or my Full-time job that requires about 85hrs/week, and looking for investment opportunities. Does anyone have any advice from a similar experience?
@Ryan Ness I think you are doing all the right things and are doing a lot! I'm sure you'll see great results in a few years.
I think Bigger Pockets is a good place to find clients when you first get started. I've heard about many successful stories.
Hey Ryan! i have been using this time to network and read many books as well......and work on other strategies and other ways of income. I feel like as long as you make some daily progress through reading and networking.....i think that you will be ok
The reason agency is attractive is there is no ceiling to income. But you can’t be a great agent with another job and focusing on your investing goals at the same time. You can and many do but the best IMO focus their concentration and work life.
Real estate brokerage is a full time full effort industry to become an agent that really stands out that can rip 25-40 transactions a year and make $350k per year. That’s when investing on the side becomes much easier. My take.
It's great to see that you are already thinking about building wealth through real estate investing while also helping your clients achieve their goals.
To answer your question about daily practices to stay productive, here are a few tips:
- Set goals: Start each day by setting specific goals that you want to achieve. This could be as simple as making a certain number of calls to potential clients, researching a particular market or property, or reading a chapter of a real estate investment book.
- Network: Reach out to other local real estate investors or agents to learn from their experiences and gain new insights into the industry. Attend local real estate events or join a real estate investing group to expand your network.
- Stay informed: Keep up-to-date with the latest trends and news in the real estate industry by reading industry publications or attending seminars and webinars.
In terms of finding your next investment opportunity, it's important to stay patient and wait for the right deal to come along. While it may feel like you're spinning your wheels, it's better to wait for a good opportunity than to jump into a bad one.
As for balancing your time between your full-time job, real estate sales, and investment opportunities, it's important to prioritize your tasks and be efficient with your time. Consider delegating certain tasks or outsourcing work to free up more time for yourself. Also, be sure to take breaks and take care of yourself to avoid burnout.
#1 Commercial Real Estate Investing Contributor
- Developer
Get on your local Property tax GIS map.
A. Look up all taxes more than a month past due and approach them to sale.
B. Pick some neighborhoods you like. Look them up on GIS map. Look down at the bottom and look for related PID properties. Pick some that have many PIDS. Contact that owner and let them know you would like to start to buy properties from them. Google them first. You want an older owner. Preferably without property management. Come with solutions for them. Seller financing. 1031 support. Property manage. Lower sales commission fee or none. Come up with other solutions for them.
C. Use the lookup on my name and any post with Mentor. Work your way through them.
Quote from @Vicki X.:
Quote from @Ryan Ness:
I am 22 years old and a licensed Realtor in Lafayette, IN. I am currently looking for my next investment opportunity while also working to help new clients who are focused on building generational wealth through Real Estate.
With the market being scarce at least on the listing side of things, what are some daily practices you have taken on to ensure that you are still moving forward even when it may feel as though you are just spinning your wheels?
Right now I have had a lot of time available to read many books on finance/investment/real estate, but am having a hard time deciding where the most impactful area would be to take action. I am living in one half of a duplex, which would cashflow at a minimum of $800 once I move out, so I am eager to find the next opportunity to be able to take advantage of this cash flow. I have received $7,000 so far that is set aside for expenses in high-yield savings as the property will likely need an HVAC and Roof Replacement in the future. HVAC is budgeted as a $16-18k expense to entirely replace both units (worst case scenario) and then the roof is budgeted for $12k. I have cash liquid beyond the income from the property I can draw from if necessary but I like to keep it separate and just let the CapEx account build.
The real estate sales that I have done so far have been all from family relationships and family friends and I am looking to expand my reach to help more people in the real estate industry. With the slow market, I am having a hard time finding balance between committing to either RE sales, or my Full-time job that requires about 85hrs/week, and looking for investment opportunities. Does anyone have any advice from a similar experience?@Ryan Ness I think you are doing all the right things and are doing a lot! I'm sure you'll see great results in a few years.
I think Bigger Pockets is a good place to find clients when you first get started. I've heard about many successful stories.
Thank you for the kind words!
#2 Insurance Contributor
- Realtor
- Bellevue, WA
Big thing is being consistent in your efforts.
For example, if you are doing cold calling, or door knocking, commit for at least 1-2 hours a day.
You will see great results after some time!
