Hey BP! My name is Tim and I am new to this community.
I am looking at getting into investing with either a focus on fix & flips to either rent or sell (depends on the property.) I've done a bit of rehab work over the last few years and am confident in basic fixes, but I would say my strength is that I am just tenacious and figure out ways to "make things work." I've been working with a firm that offers legal services to real estate investors for close to a year now and have slowly become a convert to the idea of real estate, looking to dive in personally and build up a portfolio over the next several years (I am living in northern Minnesota.)
Other than second-hand experience I don't know anything about real estate. I am meeting with banks and some local connections I have with real estate agents to start getting a feel on my position financially as well as get a feel for the local market. The biggest struggle I face is all the unknowns. I am beginning to devour all the resources I can find on real estate and investing, but being so green I am just taking rabbit trails hoping to find wisdom.
What are some great pieces of personal advice you would have for someone who has never done this stuff before? What are some of the best tools and resources you have found? I am over-ambitious and know that in the past I have thrown myself into the deep end of projects, so I am working to try and educate myself a bit more and build out my resources - any advice is greatly appreciated! Also, let me know what kind of investing you personally lean toward and why.
Welcome! Familiarity with the market is the biggest hurdle IMO. When you end up buying a place, you want to make sure you are getting a good deal and you want to know what kind of return you will get. Knowing what to buy and at what price is...priceless to know.
My strategy is buy, remodel, and hold. Decisions to buy boil down to a spreadsheet I use to estimate costs and returns. I am familiar with several real estate markets, so as soon as a property becomes available in a particular location for a certain price, I crunch the numbers and then make a decision.
The best thing you can do would be to see as many places as possible and to become intimately familiar with your market. Know the sales prices and rental prices for different neighborhoods you are interested in. You want to be in a position where you can act quickly once a good deal comes onto the market.
Thanks Jay! Yeah, I have a feeling I might just go do a bunch of shopping and browsing over the next few months. I've seen several resources on spreadsheets that people recommend to crunch the numbers. Do you just create your own spreadsheet, or is there a tool that you have found to be strong enough to use for your own purposes?
I love the "free calculators," but I also know that a lot of experienced investors will include specific items that may not be generic/general knowledge - or just have a personal bent toward certain criteria. Thoughts?
I created my own spreadsheet because I wanted something very detailed. I wanted the ability to quickly change variables and to see worst case scenario #s, as well as to account for all expenses involved in a remodel (by line item). One column I use is "Projected Costs", another is "Actual Costs", and yet another is "Paid", which keeps track of whether I've paid the bill or not. The "Paid" column is useful for contract work where it is paid over time.
Having this level of details is a must for me because the more accurate information I have beforehand, then the easier the decision is with buying a place. I also use the spreadsheet to keep myself honest - it helps no one to inflate estimated profits. Using very attainable #s, like projected rent, projected vacancy, etc. will go a long ways with insuring you make solid decisions.