Having just recently bought my first property, I know for myself what was holding me back was the fear that I would overpay, especially in this type of a market. I would get analysis paralysis and basically talk myself out of every property I looked at.
I've had one rent house for 12 years and it's basically paid for itself with very little involvement from me. The renter has been in the house since I bought it and she knows her rent is a little low so she never calls me to maintain it.
I now have a chance to buy 14 houses for around $600k that are currently renting out for $7600 per month. They aren't elaborate houses but decent housing for low to middle income families. I'm a little hesitant due to my age (59) but I need something to keep me busy after retirement. We have a nice nest egg so I could just sit on the front porch but I want more out of life. If I was 40 years old it would be a no-brainer to me.
I've had one rent house for 12 years and it's basically paid for itself with very little involvement from me. The renter has been in the house since I bought it and she knows her rent is a little low so she never calls me to maintain it.
I now have a chance to buy 14 houses for around $600k that are currently renting out for $7600 per month. They aren't elaborate houses but decent housing for low to middle income families. I'm a little hesitant due to my age (59) but I need something to keep me busy after retirement. We have a nice nest egg so I could just sit on the front porch but I want more out of life. If I was 40 years old it would be a no-brainer to me.
I see three major options.
Choice One. Suck it up. You're not that old. Didn't you hear about the Indian guy that ran a marathon at 100 years old.
Choice Two. Buy it and have someone else manage at all. You'll still make a decent profit, grow your portfolio nicely, and not have to touch a thing.
Choice Three. Put it under contract with the right to assign it to someone else. There are plenty of people that would pay you some money to buy that deal. If not then it really isn't a deal.
Liquid cash...everything is tied up in properties we already own. And banks are slow on the refi's!
I can see that. Property rich, cash-poor. If I see a really great deal when I'm in that situation I just borrow money from a hard money lender. Their interest rate might be higher but they will loan on my equity quickly.
@Frank Patalano Hello sir. What's holding me back is not being sure my numbers are right & not having the confidence to take it to a hard lender and just worried if it would work out.
@Frank Patalano Hello sir. What's holding me back is not being sure my numbers are right & not having the confidence to take it to a hard lender and just worried if it would work out.
Find someone that you know in real estate. Ask them to look at the numbers. Post the numbers on Bigger Pockets if you have to. Someone will review the numbers with you.
I'm looking for $30 million to buy a large building with 96 condo's
ROI would be $14 million
Whoa. Out of my league. You can still pull it off if it is a great deal.
If you don't have a net worth of at least $30M. No lender is going to let you pull that off and most investors will be nervous.
Your best shot is to bring together a high net worth general partnership team and share the deal. If you can make that kind of money, you will have proof when you want to do the next deal.
What's stopping me, is money for down payments for loans. I've contemplated using a heloc, but the places in my area are expensive. My reasoning is. It would take the entire heloc to get a loan, but using a heloc would hurt my credit which could hurt me getting a loan from a bank. So I am waiting to start to talk to lenders to see if I'm over thinking this when I'm done traveling for work.
I have to say, I wasn't going to post here but I saw you were from RI and I grew up there. Then I looked up your company on Facebook. Your partner Jimmy, I played baseball with him and his brother as kids. His father was our coach. Small world.
I feel like I’m missing some of the puzzle pieces so I don’t want to make a move than be blindsided by something I didn’t know about. The more I try to learn, the more I realize I don’t know.
What's stopping me, is money for down payments for loans. I've contemplated using a heloc, but the places in my area are expensive. My reasoning is. It would take the entire heloc to get a loan, but using a heloc would hurt my credit which could hurt me getting a loan from a bank. So I am waiting to start to talk to lenders to see if I'm over thinking this when I'm done traveling for work.
I have to say, I wasn't going to post here but I saw you were from RI and I grew up there. Then I looked up your company on Facebook. Your partner Jimmy, I played baseball with him and his brother as kids. His father was our coach. Small world.
Lol. Yes in RI instead of 6 degrees of separation we say 2 degrees. I was networking with a guy out of Boston the other day. He was describing a deal in Providence. In the end I knew the house, his agent, and the seller. Lol.
Conversations with banks are free so talk to a few. You may get different answers. You might want to consider partnering on the first deal. That way the toll is not as hard on you and you will be able to jump in and get your feet wet.
I feel like I’m missing some of the puzzle pieces so I don’t want to make a move than be blindsided by something I didn’t know about. The more I try to learn, the more I realize I don’t know.
You are never going to learn everything about real estate. The best way to educate yourself is by taking action. Look at properties. Network at meetings. I'm still learning all the time. Set goals to keep educating, but besides that go for it.
I’m a spouse of a man that has the plan. In order for us to make our first purchase we have to move out of our current family home to lower our debt to income ratio.
Right now we have so much to do to even begin selling our house I’m pretty much hyperventilating and I can’t seem to see the exciting end goal. I know it’s me freaking out not knowing where everything is going to end up.
I’m a spouse of a man that has the plan. In order for us to make our first purchase we have to move out of our current family home to lower our debt to income ratio.
Right now we have so much to do to even begin selling our house I’m pretty much hyperventilating and I can’t seem to see the exciting end goal. I know it’s me freaking out not knowing where everything is going to end up.
That's awesome. You have a plan and are working towards your goals.
So what is the strategy? Are you going to house hack a multi or what?
@Sharissa P. I think you're in a great area to pull off a good house hack. At least from the standpoint of finding a tenant. I see a lot of commuters living in Linden and taking the train into the city. If you can work that angle you should find tenants pretty easily. I imagine the struggle will be finding a good deal in that market and pulling together a down payment. I'm not sure what your tolerance level is for rejection but I would start with the driving/walking for dollars strategy. Look for multi family properties that look slightly under maintained and see if you can find the owners. Sometimes a quick property tax search will give you a good lead. Reach out to them by mail or if you can find a # give them a call. Just have a conversation and see if they have any interest in selling. If not maybe let them know what you are looking to do and maybe they can point you towards another owner that might want to sell. Real Estate is a network business. For a decent deal your best bet is to hope for an off market deal. You'll have to put in work to find it but when you do it will pay off. In that area MLS will either be too expensive or it will get snatched up so fast your head will spin.
Well thats my 2 cents. Hope it helps and best of luck!
The space between my ears and getting my wife and sons on board
Fill that space with knowledge.
You may not be able to get your wife on board. Some family members are too cynical or worry about the what ifs.
i suggest that you set some investing goals with her. You can put so much towards real estate as and investment fund and she can save using stocks.
If that takes a long time you may have to partner to get that first one.
Thanks for the advice!!!!
BTW, do you invest in Providence, Ri?
Absolutely investing in Rhode Island. We are investing in other areas as well but I am a decent networker so it is easier to get deals in your local market.
I think my fear is over-leveraging, vacancy and being scammed. I am trying to educate myself, but I think I'm missing what is a "good deal."
Over leveraging? You decide how much you want to put down. Run the numbers. They either work or they don't.
Vacancy. A valid worry. If you purchase in a decent area and offer slightly below market rent you will never have a problem.
Being scammed? Not sure where you are going with this one. If you are buying, have a property inspection. They will walk through the property to find problems.
You are probably not finding any good deals right now. The market is tight and any decent deal is being scooped up. Keep looking for that needle in a haystack.
I think my fear is over-leveraging, vacancy and being scammed. I am trying to educate myself, but I think I'm missing what is a "good deal."
Over leveraging? You decide how much you want to put down. Run the numbers. They either work or they don't.
Vacancy. A valid worry. If you purchase in a decent area and offer slightly below market rent you will never have a problem.
Being scammed? Not sure where you are going with this one. If you are buying, have a property inspection. They will walk through the property to find problems.
You are probably not finding any good deals right now. The market is tight and any decent deal is being scooped up. Keep looking for that needle in a haystack.
You're right Frank. I think my strategy now is just to watch the market and bide capital while I learn the ebb and flow of the market.
It's my opinion that most people don't achieve the success they want because the get in their own way. It took a long time before I ever saw the fruits of my labor take form and I can tell you humbly that most of that time working was spending learning how to get out of my own way.
It's my opinion that most people don't achieve the success they want because the get in their own way. It took a long time before I ever saw the fruits of my labor take form and I can tell you humbly that most of that time working was spending learning how to get out of my own way.
Right. Goal setting, planning and just plain old work are also very important to being successful.