Ready to Invest, but overwhelmed and stuck!

OP

Member since 2024 · 8 posts · 6 votes

2y

@Nicholas L. Thank you for the feedback! For context around our area…population is less than 200 in our immediate area, nearby is 2,000ish, and closest metro area is a little over an hour. Anything worth buying would be $200k+ with most rent in the area going for $1,000 per month. We live in the middle of nowhere!

Yes, we could consider the nearby metro, which is Hot Springs. However, lots of older homes that either need a lot of work or would require a lot in the near future. This is really why we are looking in the north Texas market, which is only about 2/3 hours away. Several newer homes and growing area. Something that’s not expected in our market.

Thanks for the thread recommendation! I’ll definitely go down that rabbit hole shortly!

V.G JasonPro Member

Investor · Member since 2022 · 3k+ posts · 3k+ votes

2y

You're not ready to invest if you're overwhelmed and stuck.

Figure out what you want to get out of it, what risks you want to cap and then that narrows your pursuit.

OP

Member since 2024 · 8 posts · 6 votes

2y

Quote from @Account Closed:

Quote from @Ashley Campbell:

Background: Late 30s, married with two young kids (4 and 2). My husband and I both have solid W2 incomes (both remote). We live in small town Arkansas with a very low cost of living. No plans to move as this is where we want to raise our girls. We have been your average corp job employees for the past 15+ years (maxing out 401K, emergency fund savings, etc.). About 5 years ago we hopped in a RE syndication and pulled out of it recently to take a more active role in our investing (returns where meh), along with trying to supercharge our financial goals in retiring early. Theoretically, we are on track to retire in our mid 50s. But why not try earlier and start gaining some income outside of our W2! And the grind is getting a bit monotonous...Plus, I've always had a keen interest in RE and ready to dive in. I'm a specialty insurance underwriter by trade; therefore analyzing deals and numbers is my jam.

Our market doesn't make sense from a longer term rental standpoint, so we've been researching different areas to focus on and get started. Man, it's sooo overwhelming! We've pretty much honed in on North Texas area. We've been exploring the OmniKey Group/Slaughter Investing, which we came across through the RealWeath (Kathy Fettke) channel. Does anyone have any experience with these folks? Any feedback would be appreciated.

We have approximately $150k liquid cash ready to go and can likely gain more capital in a fairly quick manner. I keep getting hung up if we should focus on diversifying with two different houses in two different areas in North Texas or go for it on a more expensive type Duplex. On paper the duplex projects higher returns, but of course, that's just a projection. Interested in some thoughts here! PS...anything outside of our market, we do plan to hire a PM.

Now, we do live in a small town, touristy area that does lack in nicer/unique short-term rentals. Could be an opportunity here. In my head I ask myself if we should go for one less capital intensive LTR and give a local STR a try (for the tax advantages) as well. We really need to sit down with an experienced RE CPA. We've visited with 3 that just don't get it. Personally, I need to do more homework myself on the local STR part to see if numbers make sense.

Appreciate anyone's feedback!

One of our students is similarly situated in a town outside of Greer's Ferry Lake, AR. We are training them to find properties that have not been on the MLS while using strategic financing. We're finding plenty of opportunities. It just means expanding your search area a little and knowing what to look for. It can be done. Small town USA is totally overlooked and makes for a search area with few competitors, so profits are higher. I wouldn't go out of state until you've tried what's available around y

Definitely agree small town USA is overlooked! The appreciation play is just hard to come by in the SW part of AR.
I’m curious though…if I looked at a market that is in a 2/3 hour radius of my household in my state of AR, why would looking in a 2/3 hour radius be worse in the state of TX? I’m an hour from the TX border. Thanks!

OP

Member since 2024 · 8 posts · 6 votes

2y

That word “stuck” brought you to my post. Exactly why I used it 😎 Thanks for the input!

Jeremy Fleming

Investor · Member since 2024 · 52 posts · 47 votes

2y

Hey there!

First off, it sounds like you’ve got a solid plan and a great mindset for taking control of your financial future. Kudos to you for diving into real estate with such enthusiasm! I totally get the pull of investing closer to home, especially if your local market has some untapped potential. Since you mentioned that your area lacks nicer/unique short-term rentals (STRs), this could indeed be a golden opportunity. Here’s why I think investing closer to home makes sense and how you can maximize your returns:

Familiarity: You already know the local market, which gives you an edge in identifying good deals and understanding the demand. Plus, you can easily keep an eye on your investment without needing to rely entirely on a property manager.

Make Money When You Buy: This is key. Look for properties where you can negotiate a lower purchase price or find motivated sellers. This way, you build equity right from the start. It’s all about buying below market value and creating instant equity. OR you can make money when you buy with properly structured financing. (think Vendor Take Back mortgage at 0% interest)

Owner Financing: This can be a game-changer. It not only makes the numbers work better but also reduces the need for a large down payment. Approach sellers who might be open to owner financing – especially in a small town where personal connections and negotiations can go a long way.

Short-Term Rentals (STR): Given the touristy nature of your area, an STR could yield higher returns than a long-term rental (LTR). Plus, the tax advantages of STRs can be pretty sweet. If you nail the marketing and management, you could see some impressive cash flow. Just make sure to do a thorough market analysis to ensure demand.

Lastly, definitely sit down with a savvy RE CPA who understands the ins and outs of real estate investing. They can help you navigate the tax benefits and ensure you’re making the most out of your investments.

Hope this helps, and good luck with your real estate journey! Keep us posted on how it goes!

Cheers!

2 Reply

Fulton Abraham Sanchez

Accountant · CPA Miami, FL · Member since 2022 · 192 posts · 43 votes

2y

@Ashley Campbell, hi. I understand your point. But you are not alone, we are a community of RE investors and active CPAs here in Biggerpockets assisting RE investors nationwide. Do not hesitate to reach out to one with real estate experience as location is not longer an issue. Most of us work remotely.

Preferably contact us by email as we are not allow to self promote.

Sherry McQuageBusiness Member

Real Estate Broker · Moore County, NC · Member since 2020 · 168 posts · 141 votes

2y

Being overwhelmed and excited is not a bad thing. Reach out to real estate agents in BP in the areas you're thinking about. Ask lots of questions. As careful as you've been with your money so far, realize you're learning a new (to you) way of creating wealth.

Reach out to other property owners who are doing the thing you want to do...maybe even take a trip to the area you're thinking of investing in and meet some agents to get real feedback.

Best to you!

Mike ReynoldsPro Member

construction · Nacogdoches, TX · Member since 2011 · 2k+ posts · 1k+ votes

2y

Quote from @Ashley Campbell:

Background: Late 30s, married with two young kids (4 and 2). My husband and I both have solid W2 incomes (both remote). We live in small town Arkansas with a very low cost of living. No plans to move as this is where we want to raise our girls. We have been your average corp job employees for the past 15+ years (maxing out 401K, emergency fund savings, etc.). About 5 years ago we hopped in a RE syndication and pulled out of it recently to take a more active role in our investing (returns where meh), along with trying to supercharge our financial goals in retiring early. Theoretically, we are on track to retire in our mid 50s. But why not try earlier and start gaining some income outside of our W2! And the grind is getting a bit monotonous...Plus, I've always had a keen interest in RE and ready to dive in. I'm a specialty insurance underwriter by trade; therefore analyzing deals and numbers is my jam.

Our market doesn't make sense from a longer term rental standpoint, so we've been researching different areas to focus on and get started. Man, it's sooo overwhelming! We've pretty much honed in on North Texas area. We've been exploring the OmniKey Group/Slaughter Investing, which we came across through the RealWeath (Kathy Fettke) channel. Does anyone have any experience with these folks? Any feedback would be appreciated.

We have approximately $150k liquid cash ready to go and can likely gain more capital in a fairly quick manner. I keep getting hung up if we should focus on diversifying with two different houses in two different areas in North Texas or go for it on a more expensive type Duplex. On paper the duplex projects higher returns, but of course, that's just a projection. Interested in some thoughts here! PS...anything outside of our market, we do plan to hire a PM.

Now, we do live in a small town, touristy area that does lack in nicer/unique short-term rentals. Could be an opportunity here. In my head I ask myself if we should go for one less capital intensive LTR and give a local STR a try (for the tax advantages) as well. We really need to sit down with an experienced RE CPA. We've visited with 3 that just don't get it. Personally, I need to do more homework myself on the local STR part to see if numbers make sense.

Appreciate anyone's feedback!

That’s funny. I live in Texas and invest in small town AR. Not just small town though. Think about this if you will. Texas has a minimum wage of 7.50(I think it’s still that anyway) and Arkansas has one of 11.00. Houses are cheaper in AR than in Texas and so is the property tax. Even paying the state tax up there, I come out better buying in Arkansas.

Let me know what you are looking for and maybe I can help.

OP

Member since 2024 · 8 posts · 6 votes

2y

@Mike Reynolds Isn't it funny how that works! I'm really not opposed to investing in AR. Based on my research, it just seems as if more jobs moving to TX and appreciation is likely to take place in some of those "smaller" cities outside of DFW. Don't get me wrong NW AR is booming! This is my dilemma though...where do I invest? I know it's not my backyard (even though folks are trying to convince me of that). Just need to get started! I total get why I've heard over and over people getting hung up on the first investment LOL. Really our goal has been to acquire 2-3 properties by YE...so still time to hit our goal!

Do you mind sharing the area in AR you invest? How long have you been investing? I'm all ears if someone is willing to share their experience!

Nicholas L.Pro Member

Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes

2y

@Ashley Campbell

To be clear, my definition of backyard goes out 2-3 hours. I didn't know you were that close to TX, so that's a plus. I'd try to go to ALL the REIA meetings within those 2-3 hours, and see what other folks are doing.

LTR vs. STR is just something you'll have to decide.

And I really don't think that something new / turnkey is going to cash flow... but if you have sample numbers post them here. =)

Hope this helps

OP

Member since 2024 · 8 posts · 6 votes

2y

@Jeremy Fleming All great points! Really appreciate the feedback!

Mike ReynoldsPro Member

construction · Nacogdoches, TX · Member since 2011 · 2k+ posts · 1k+ votes

2y

Quote from @Ashley Campbell:

@Mike Reynolds Isn't it funny how that works! I'm really not opposed to investing in AR. Based on my research, it just seems as if more jobs moving to TX and appreciation is likely to take place in some of those "smaller" cities outside of DFW. Don't get me wrong NW AR is booming! This is my dilemma though...where do I invest? I know it's not my backyard (even though folks are trying to convince me of that). Just need to get started! I total get why I've heard over and over people getting hung up on the first investment LOL. Really our goal has been to acquire 2-3 properties by YE...so still time to hit our goal!

Do you mind sharing the area in AR you invest? How long have you been investing? I'm all ears if someone is willing to share their experience!

Mabelvale was the first place. It’s close enough to LR that’s it’s not really small town though. Beebe and signing a contract for a property in Mt. Ida later this week.

I buy properties that are below retail and there are plenty around the area. I do mobile home parks. Mostly owners that are tired of the grind and want to retire and enjoy life. The first one I bought for 60k down.

OP

Member since 2024 · 8 posts · 6 votes

2y

@Mike Reynolds Nice! Mabelvale is a growing area. South of LR (Benton/Bryant) is a growing area as well. We lived there for 3 years and could kick ourselves for selling our house when we did. Another good potential area for us. and Mt. Ida is a beautiful area!

you likely are aware of this if investing in Mobile Home parks...Benton/Bryant had one for sale recently in the last two months. Not sure if it's still on the market though. D

Do you self-manage or use someone local?

Mike ReynoldsPro Member

construction · Nacogdoches, TX · Member since 2011 · 2k+ posts · 1k+ votes

2y

Quote from @Ashley Campbell:

@Mike Reynolds Nice! Mabelvale is a growing area. South of LR (Benton/Bryant) is a growing area as well. We lived there for 3 years and could kick ourselves for selling our house when we did. Another good potential area for us. and Mt. Ida is a beautiful area!

you likely are aware of this if investing in Mobile Home parks...Benton/Bryant had one for sale recently in the last two months. Not sure if it's still on the market though. D

Do you self-manage or use someone local?

My sister is also my partner. She lives in Benton. But we sell the homes and just rent the lots. We have our days mostly free. Consider that on many SFH with the BRRRR method you rent and hope to get a few hundred a month free and clear. ThEn you still have maintenance and Capex. When we sell the homes it does many things. First, it brings in tenants with a different mentality. They are home owners and not renters. They tend to take better care of the property. They are responsible for the upkeep on the house and we are responsible for the land and underground utilities. Then we can make more than a few hundred per month per house and have much less Capex. Plus we are not bothered by diapers flushed down the toilet and late night calls about things like that.

We have one manager per about 3-4 parks. As long as they are not that far away from each other. Mostly the manager is phone duty to keep them from calling us all the time. Software takes care of the rest.

Everyone is griping about the economy and interest rates. What better inflation fighter than to offer low income housing that these people can sell later and buy something better when they are ready to make a change? I don't worry with interest rates either. We bought a park last year when the commercial rates went to 8%. We are netting 7k a month with a DSCR of 1.65. When the rates go down in a few years we will do even better. If they don't we will have equity and probably appreciation and still probably be at the same net.

If you choose to go this route and like this model, I can hook you up with a banker that is awesome and loves these. He only lends in AR though.

Roger Loesel

Real Estate Agent · Central Ohio · Member since 2024 · 10 posts · 6 votes

2y

Starting out I myself invested in my own back yard. For two reasons I could drive to the property anytime and handle whatever myself - I did not have a team in place to do what was needed to make the investment Successful and the second reason was control.

Investing on your own in real estate is a 2nd Job no matter how you look at it. Until the numbers make sense for it not to be any more! If you would like to talk more reach out to me.

Jordan Holmes

Real Estate Agent · Grimes, IA · Member since 2022 · 16 posts · 3 votes

2y

@Ashley Campbell we have seen some tremendous success with STRs, specifically in the unique destination type of properties. We have various properties projected to bring in at least $100K revenue. Most will tell you STRs are a lot of work and I won't disagree with that if you don't know what you are doing.

I will say though, we have been able to put together some rock-solid systems and processes to streamline that to minimize the work and maximize the returns.

My business partner and I are actually writing a chapter in a new book that is coming out this year about unique stays. Happy to chat more if you are interested.

Either way - best of luck with whichever direction you decide to go.

Jordan D'Silva

Investor · Dallas, TX · Member since 2020 · 104 posts · 43 votes

2y

It really depends on your overall investment goals, how patient you want to be, etc. It sounds like if you’re looking to invest in North Texas, you aren’t a cash flow investor. North Texas is an optimal market for long-term growth, so unless you get a serious discount, I would go for a single-home over a duplex. But I would warn that you should still look for a great discount on the single-family side as well. Deals won’t pencil otherwise. As far as joining a program, I can’t say yes or no, but would warn against shelling out a bunch of money for a course or mastermind. There’s plenty of solid free resources. Our thesis in North Texas is finding heavy discounts, conducting comprehensive renovations, and holding long-term in middle income markets. Happy to talk more about the market here and what we are seeing.

Joehn B.

Investor · Houston · Member since 2022 · 80 posts · 44 votes

2y

Fix & flip or Foreclosure auctions to cash up? Also, don't forget your 401k's can go SOLO, self directed and buy properties themselves.. look at the stock market lately? yeah get out of that when it recovers and self directed IRA conversion to buy more houses :)