Next Move

21 Replies

Hi Folks,

Josh,Brandon and everyone else THANK YOU!!!!

What an awesome site you guys, and gals, are crushing it! Everyone I see that is even remotely related to Real Estate I rave about this place 9 times out of 10 they get pen and paper and write down the address.

Ok,

About me, I am a 49 year old truck driver who's pension, for various reasons, is going down the toilet! My current gross income is about $70k per year.

I decided after reading Rich Dad Poor Dad....I know it gets mentioned a lot around here...lol

I knew I needed to take control of my finances.So After listening to all 109 pod casts, some several times, and reading/listening to audio books I decided to start a Real Estate investment Co.I like the idea of passive income from a buy and hold strategy.

I have $25k in cash from a HELOC and about $10k in credit cards that are all paid off.

My goal is to be able to stop driving in 10 years and manage my properties.

My immediate goal for this year is to purchase my first multi family and have it rented by years end.

I really like the Charlotte NC area since you can get so much more for your money.

I currently live 30 miles NE of Philadelphia Pa and prices are a bit high around here.

Brandon has said several times that you should be able to find something affordable within a two hour drive from any market.

I guess what I am looking for is some feed back, as to, weather or not my 10 year goal is to lofty, and also, what should my next move be?

Since, I only have $25k in cash what price range should i be looking at in order to have a modest cash flow from the start?

Thanks again for everything,

Dave

@Dave Nay  welcome! 

I found BP the beginning of the year and I've got 41 podcasts to go, that's impressive. Though I guess you spend a bit more time than me on the road huh...

I would say, it's not a lofty goal at all. My goal is to be able to be free from my 9-5 within the next 12 years (ie. be able to generate about 50k of todays dollars after taxes) and it looks attainable. Look at it this way - if each unit is spitting off $150 / month net you only need 28 units or 14 duplexes. So you'd only need to buy 2-3 duplexes a year for the next 10 years. If you can put away $15-20k per year between rentals and your job I think you should be able to hit that no problem.

On the note of prices in the area, I actually think it's pretty cheap around here. With conventional financing, you can get into a cheap duplex in north philly, west philly and norristown (I'm not sure I'd recommend blindly buying in those areas, but there are some areas worth looking at) - I know because I have about the same budget and am looking for the same thing!

As far as price range, if possible (I don't know your situation) I'd try to owner occupy a good multi - you should be able to get a 4 plex for around $150k or 7.5k down. Then depending on your patience level and risk tolerance you could either keep looking for another conventional mortgage place (20% down) for about 85k - that could get you a duplex or triplex, location depending.

If you can't owner occupy (can't move for whatever reason) then I'd shoot straight for a place in the $125k range. That should set you up for a triplex or quadplex location depending.

Note: you definitely want to have cash reserves for emergency payments, but I didn't factor that in - so you may want to curtail your purchasing a bit depending on the amount you want to have sitting around.

Anyway, let me know if you need anything in the area and best of luck.

Also, just including @Joshua Dorkin  so he can see your praise (which I echo, btw - thanks!)

What are you considering expensive?  I'm in your area and I don't think our prices are too far off from Charlotte.  Any difference would be worth having my investment closer to me.

@ John Matthews 

Thank you  for  that thoughtful response.

The  owner occupy is a great strategy ,however, since i own a property already I would have  to  transfer  it into someone else's name  and incur a 2% transfer  tax.(thanks  PA) even with that tax it may still be a viable option.

I do spend about 50 to 60 hours a week  behind the  wheel  ,so yes,  i get alot of listening  time in :)

@ Kevin Delaney

i can get a single family move in ready 3 br 2 bath on 1/4 to 1/2 acre  stainless  appliances  for  $120k. In a desirable location to boot!

In Morrisville  if i found something for that price i would need to sink another 30k to make it livable and still not be in the most desirable location.

You point about being closer is taken for sure.

Have  a  good  one  

Dave  

@Dave Nay  So you don't actually have to transfer your other house to someone else's name, you just need to live in your new one for one year. So you'd need to move, but you could keep the other one and rent it, or sell it, or...anything you wanted. After one year you could move into your next owner occupied residence, rinse and repeat. I'm 90% positive you only have to live there for 1 year, but double check with an authority since you don't want to be caught up in mortgage fraud. But the bottom line is, you can be an owner occupant in one home and own hundreds of other homes (if you wanted). 

Secondly, to use the @ (mention) function type the @ key followed immediately by 3 or so letters of the person you're trying to mention (must be a collegue or someone in the thread) and look below the reply window - you should see a drop down with their name for you to click.

Charlotte is a great area and desirable properties rent immediately. However, if the numbers work closer to home why Charlotte?  I like having my rentals close by. Hopefully one day if I'm fortunate enough to move into bigger units I may spread out more.  However, I couldn't imagine traveling a large distance for one unit. 

Medium jhb properties 01Jason Burr MBA, JHB Properties LLC | [email protected] | 864‑238‑9670

@John Matthews  

Thanks for that quick tip ;)

Since i have a HELOC in my name already most banks will only allow you to have one home as primary at a time.

You are correct about the one year to satisfy the o/o requirements.

Thanks again 

Dave 

Nice to Meet you!

It's not lofty! Very doable! There will be lots of "moment" but the key is to keep you eye on the prize and baby steps! The first step is to know what type of investments you want to specialize (we do buy and hold) and than build your plan from there! Don't get discouraged! We started at $0 , 3 years ago and now have 5 houses with another 2 in the process. 

There are tons of resources and ways to be successful!

Dave,

Sounds like you and I have had the same realization! I am brand new to "the biz" as well and am in the learning phase. My plan is similar to yours although we are going about it in different ways. A 10 year plan is a great plan with the right mindset. Stay focused on your goal and you can certainly get there! I look forward to hearing of your progress here on BP!

Welcome to the business! It's fun isn't it? After my first disaster in real estate rentals in VA on my own, I am enjoying a second RE investing career in TX. I mostly buy and hold owner finance, but when cash is short, I have done some quick flips here that worked well but this area is appreciating and no need to do much work on the house to make money. I have done well in Charlotte, and I also have had some success in KC with a friend there on a flip.

Originally posted by @Dave Nay :

Hi Folks,

Josh,Brandon and everyone else THANK YOU!!!!

What an awesome site you guys, and gals, are crushing it! Everyone I see that is even remotely related to Real Estate I rave about this place 9 times out of 10 they get pen and paper and write down the address.

Ok,

About me, I am a 49 year old truck driver who's pension, for various reasons, is going down the toilet! My current gross income is about $70k per year.

I decided after reading Rich Dad Poor Dad....I know it gets mentioned a lot around here...lol

I knew I needed to take control of my finances.So After listening to all 109 pod casts, some several times, and reading/listening to audio books I decided to start a Real Estate investment Co.I like the idea of passive income from a buy and hold strategy.

I have $25k in cash from a HELOC and about $10k in credit cards that are all paid off.

My goal is to be able to stop driving in 10 years and manage my properties.

My immediate goal for this year is to purchase my first multi family and have it rented by years end.

I really like the Charlotte NC area since you can get so much more for your money.

I currently live 30 miles NE of Philadelphia Pa and prices are a bit high around here.

Brandon has said several times that you should be able to find something affordable within a two hour drive from any market.

I guess what I am looking for is some feed back, as to, weather or not my 10 year goal is to lofty, and also, what should my next move be?

Since, I only have $25k in cash what price range should i be looking at in order to have a modest cash flow from the start?

Thanks again for everything,

Dave

 I know you will be able to do it! Find a good mentor/expert to guide you and you will make it. Consider owner financing houses rather than renting possibly. That is what i do, and I do not have to manage the properties. I have done it, and it's not something I wish to do again. 

@Joe Pickett

Thanks for  that insight!

Going  owner  financed might be a great strategy  for  me. I also  like rhe idea  of holding the  mortgage and not having any maintenance headaches :)

I am guessing these are  single family  correct?

Have a  good  one  

Dave  

@Elizabeth  Colegrove

Thank you for that encouragement :)

I would love to hear how you  pulled  those first few deals together?

Have  a  good  one  

Dave  

@Dave Nay

Point taken on the acreage. I'm familiar with both areas that you were talking about. I grew up in Charlotte and currently reside in Lower Bucks county, which is why I was interested in your reasoning. I have a list of 15 properties from the MLS that are from 75k to 120k. Some need work, some are C's, some are waiting for investors. For example, REO in Indian Creek section of Levittown 4/2 listed for 105k. I have a rental in the section next to it that rents for 1550/mth. I think your first hurdle is going to be financing. For investments, conventionally, they like to see 25 to 30% down. Doesn't leave you much room for painting, etc... That's where the owner occupied multi home comes in handy. 3.5% down with an FHA qualified loan.

yes dave, owner financed SFH. I got turned onto it a few years ago. I love it. I buy cash when I can, or do a wrap around mortgage; it works in my market usually as I can get a 5% mortgage and make about 11-12% ROI on my houses. I have been in rentals and to me, it's a lot more trouble.

I'm here in Charlotte NC there is virtually no inventory on MLS priced at a price point that makes sense for rental property to cashflow I would advise to find deals locally so you can determine for yourself what a true deal is based on your income expense criteria because rents vary from market to market

@Kevin Delaney   and @Dave Nay ,

To Make the @ work do the following:

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Raymond

@Audrey Truesdale what calculations do you use for Charlotte to determine what price points you like to use when looking to buy a rental? Do you use the 1% rule or anything similar?

If I were just starting out with those funds, I'd do some quick flips to build my cash and then do buy and holds of distressed properties for 40-60k. That's what has worked well for me over the years. 

I did two flips recently and make 5-10 on each. I do several a year of those when I need more cash. If you ever need a good OH and TX contact for cheap flips, let me know.

I base the price on area and cashflow. Comps for rentals mean nothing to me at the time I buy because I plan to hold rentals for 5-7 years free and clear. The 1% rule is good if you plan on putting bank finacing or some type of debt on the property long term IMO 

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