Ready to start a career in Real Estate, Advise

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Ready to start a career in Real Estate, Advise

Roy Gutierrez
Investor · Oak Park, MI · Member since 2014 · 299 posts · 47 votes

Hello everyone,

Technically I'm not starting my career in real estate, I have 4 rentals, I was pretty much an accidental landlord, that started out with 2 rentals and now I'm up to 4, I credit this to the recession prices, I got lucky, I wasn't savvy, just a hard worker. I quit my job last year and finishing getting organized with the vacation rental side of my business and by November will be ready to tackle this new phase in my real estate career full steam ahead and grow my business.

This is my current situation, 4 rentals, plus my own home:

Home 1 - Vacation Rental - worth about $160K - Owe 42K (conventional 4.25)

Home 2 - Vacation Rental - worth about $185K - Owe  $50K (conventional 4.25)

Home 3 - Long Term Rental - worth about $165K - House free and clear

Home 4 - Long Term Rental - worth about $95K - House paid off but have lien from SBA Owe $30K

Home 5 - Primary Home - worth about $200K - Owe $120K (FHA, 3.75 BUT also pay PMI so in reality it's 4. something)

All my houses are doing really well, I tried to get rid of the cheapest one to finance buying a more high-end home but no bites so just kept it as a rental which is fine by me.

My goal is to acquire more properties in my area (suburbs north of Detroit or something close to downtown Detroit) or in South Florida (used to live there and have family there), my options would be:

- Property to flip (have a friend contractor that has done work for flippers so I would partner with him)

- Long term rental

- Vacation rental

My first hurdle would be financing, I was trying to hold on to my high stress job until I acquired at least 1-2 more properties but it was my health or 1-2 more properties so I chose my health. So now I'm self employed, all the houses are under my name, which is something else that I want to take a look into (maybe create an LLC(s))

My plan is start listening to as many podcasts as possible, start contacting banks to see what type of financing I can qualify for and take it from there. What would you experienced investors do in my situation? Any particular way you would use the houses to help finance other properties? 

Thank you very much in advance for the advice!

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Cody Evans
Wholesaler · Fairfield, CA · Member since 2017 · 472 posts · 145 votes
8y

@Roy Gutierrez

Congratulations! I came here to give you advice but you have 5 more properties than I!

I think the best tip I have in my arsenal is to use the meet up app on your phone to search for real estate groups in your area so you can network with experienced investors that know your market. You can meet people that can finance your deals here as well but I'm not sure what their criteria for giving you a loan would be. 

I hope this was of some use to you.

@Jody Schnurrenberger

What is the price going up to? Do I still get the regular price if I do it on a monthly plan?

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  • Jody SchnurrenbergerPro Member
    Investor · Asheville, NC · Member since 2017 · 506 posts · 404 votes
    8y

    I'm not so good with recommending for the finance side.  I just do collateral loans against my own stock market account. 

    But I will tell you to be sure to use the tools to ensure you get something that REALLY cash flows, not something that just LOOKS like it will. On the most recent webinar, Brandon Turner did an example (he just pulls things from online and runs them through the tool to show us how) and he asked us to vote on if it would cash flow. Something like 80% of us said it would. It didn't. Even HE was surprised! When it comes to including things like CapEx, vacancies, taxes, insurance, etc., it's just too hard to eyeball it. You need to run it through a tool.

    However, I don't know how many times Plus members can use the tools.  But they are raising the Pro membership prices in a week or so, so if you were thinking of going Pro, do it now!  Also, there is a discount code you can use until Friday at midnight--"1025."  Also, they say we get locked into that price, so next year, when new members are paying more, we will still be paying the discounted price from this year.  :-)  I really encourage you to consider it--especially since you no longer have a regular job!

    0Reply
  • Cody Evans
    Wholesaler · Fairfield, CA · Member since 2017 · 472 posts · 145 votes
    8y

    @Roy Gutierrez

    Congratulations! I came here to give you advice but you have 5 more properties than I!

    I think the best tip I have in my arsenal is to use the meet up app on your phone to search for real estate groups in your area so you can network with experienced investors that know your market. You can meet people that can finance your deals here as well but I'm not sure what their criteria for giving you a loan would be. 

    I hope this was of some use to you.

    @Jody Schnurrenberger

    What is the price going up to? Do I still get the regular price if I do it on a monthly plan?

    1Reply
  • Jody SchnurrenbergerPro Member
    Investor · Asheville, NC · Member since 2017 · 506 posts · 404 votes
    8y

    They haven't said what it's going up to, but they have mentioned it's going up on the last 2 webinars.  As for going monthly, I assume you pay full price, but it's worth a shot to use the code.  But I'm sure when the price goes up, so will yours.  Maybe try Support and see if they know what it's going up to.  :-)

    0Reply
  • Bora Yalcin
    Rental Property Investor · Chicago, IL · Member since 2017 · 11 posts · 7 votes
    8y

    Hi @Roy Gutierrez

    So, it sounds like you got a good thing going here. I don't know how you just fall into 2 properties, but I guess that's a tale for another time.

    Based on the ARV's you've provided us to look and the information on the debt you have there seems to be one obvious route to take. Take the equity you have in all the investment properties and either take a HELOC against one or all of them. The other option is to refinance the properties, especially the one that is free and clear.

    Remember, you've quit your job, so now you need to invest like an investor...not a hobbyist, so be active not passive. A free and clear home is of no use to you anymore, you need to take that equity and translate it into more cash flow.

    If you can refinance out a few hundred thousand you should be able to acquire 6-10 more SFH's in your area (if my assumption on your market is accurate).

    Lima One Capital, Renovo Financial, and RMAC Lending will give you some initial lenders to contact since it will may be difficult to HELOC investment properties or refinance anything at all without a W2 job. You may have to LLC and transfer the properties, this way you can get commercial loans (should be easy since you already have 4 of them and good equity/cash flow).

    Don't be scared or over analyze, do what you did to get you to your current state. Now, you have more time, so use it to build quicker. Good luck!

    0Reply
  • Jessie Niu
    Columbus, OH · Member since 2015 · 210 posts · 80 votes
    8y
    Originally posted by @Roy Gutierrez:

    Hello everyone,

    Technically I'm not starting my career in real estate, I have 4 rentals, I was pretty much an accidental landlord, that started out with 2 rentals and now I'm up to 4, I credit this to the recession prices, I got lucky, I wasn't savvy, just a hard worker. I quit my job last year and finishing getting organized with the vacation rental side of my business and by November will be ready to tackle this new phase in my real estate career full steam ahead and grow my business.

    This is my current situation, 4 rentals, plus my own home:

    Home 1 - Vacation Rental - worth about $160K - Owe 42K (conventional 4.25)

    Home 2 - Vacation Rental - worth about $185K - Owe  $50K (conventional 4.25)

    Home 3 - Long Term Rental - worth about $165K - House free and clear

    Home 4 - Long Term Rental - worth about $95K - House paid off but have lien from SBA Owe $30K

    Home 5 - Primary Home - worth about $200K - Owe $120K (FHA, 3.75 BUT also pay PMI so in reality it's 4. something)

    All my houses are doing really well, I tried to get rid of the cheapest one to finance buying a more high-end home but no bites so just kept it as a rental which is fine by me.

    My goal is to acquire more properties in my area (suburbs north of Detroit or something close to downtown Detroit) or in South Florida (used to live there and have family there), my options would be:

    - Property to flip (have a friend contractor that has done work for flippers so I would partner with him)

    - Long term rental

    - Vacation rental

    My first hurdle would be financing, I was trying to hold on to my high stress job until I acquired at least 1-2 more properties but it was my health or 1-2 more properties so I chose my health. So now I'm self employed, all the houses are under my name, which is something else that I want to take a look into (maybe create an LLC(s))

    My plan is start listening to as many podcasts as possible, start contacting banks to see what type of financing I can qualify for and take it from there. What would you experienced investors do in my situation? Any particular way you would use the houses to help finance other properties? 

    Thank you very much in advance for the advice!

    All your properties have decent equities, you could refi, cash-out refi, take HELOC to buy more properties.

    0Reply
  • Roy Gutierrez
    OP
    Investor · Oak Park, MI · Member since 2014 · 299 posts · 47 votes
    8y

    Hi guys,

    I appreciate the advice, I will definitely think about the pro service @Jody Schnurrenberger, thank you for the suggestion. I just started going to the investor meetings @Cody Evans, definitely a great way to start building relationships. 

    @Bora Yalcin, very interesting, when you say HELOC against all of them, you mean try to HELOC each individual house or there's some HELOC that you can combine the houses and get one big HELOC? Thank you for the contacts! I'll provide some entertaining reading of how I got started: I lost my house in the recession in FL, I was in michigan thinking I would rent for the rest of my life and I was fine with that, mom "pressured" me to use her $50K loan (part of her retirement) to buy a house (no intentions to invest, just a house to live in) initially I didn't want to risk her money but after some thought I accepted her offer in 2012, after months of many losing bids of foreclosures I finally won not 1 but 2 at the same time, so my realtor brother said not to let go the other one so he lent me $20K, after the rehabbing, contractors, being scammed sometimes and feeling like the life was sucked out of me (and by miracle didn't get fired from my job) I finished both so I had to put one for rent, swore never to do this again but 2 years later was looking thru zillow and homepath and the adrenaline juices started flowing again, took out a home equity loan and bought 2 more, repeat same pattern, life sucked out of me, again I don't know how I didn't get fired, but afterwards I was just tired and not disillusioned with real estate like the first time; and then bought the last one where I live 2 years ago, sorry to make it long lol.

    Thank you @Jessie Niu, I'm trying to see which of the methods you mentioned will take me the furthest.

    0Reply
  • Dylan TanakaPro Member
    Real Estate Agent · Detroit, MI · Member since 2008 · 455 posts · 178 votes
    8y

    @Roy Gutierrez
    Make sure to get plugged in with all of the local investors right here in Metro Detroit.  We have a strong core both online and face to face.  Looks like you've already set yourself up a good foundation.  I'm happy to answer any questions I may know the answers to.  

    Look forward to seeing you in the trenches!

    1Reply
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