My financial picture & where to get started?

8 Replies

Hi,

My wife and I are in our mid 30s and have been interested in real estate for a long time. I've been lurking on here for a few years and been following the market pretty closely as well. We're at kind of an impasse and don't know where we should or could get started in real estate investing. We have approximately $330k in cash/non-retirement investments, and approximately $150k of equity in our current house we live in. We've been pretty lucky financially. I feel like there's a few different options to explore in real estate but not 100% sure where to start. If you were in our situation, what would you do? Any other suggestions?  Thanks!

With that kind of starting cash, you have some choices.  Do you want to be more conservative and just pull in a reasonable cash flow each month or maybe you want to be a bit more aggressive and build equity quickly and your not so concerned about the monthly cash flow at this time?  Or like most people, maybe you want a bit of both.  If I was in your position at your age, I would want to build even more equity now and consider cash flows deals later.  Either way, both of the strategies can be done via multi-family deals.  And deeper "value add" deals are the ones you want to be a part of...maybe as a passive investor first.  Find a deal sponsor with a track record of turning around deep value play apartment deals.  And you can find that out by networking, meeting other sponsors and especially talking to the passive investors on those other deals.  And I agree, San Antonio is a much better market than Austin.  But I think there are other great examples of places throughout Texas and beyond.

Apartment/multi family investing. My wife and I have started with single family because we didn’t have a lot of capital but now that we are getting there, we are looking at apartments for more cash flow and long term investments. 

I'm with @Reno Puente , my wife and I also started out flipping single family and while we never lost money it was a lot of work for the amount of income generated.  Multifamily is great for both cashflow and wealth generation.  You have options, invest in your own properties or participate in a syndication.  The returns aren't as high but there is less risk and it's more passive.

@Kenneth Anderson

Welcome to BP family! Congrats on deciding to start investing.

The next step for you and your wife is to determine whether you'd like to be active or passive investor. This article will shed some light on it: https://www.biggerpockets.com/member-blogs/10850/8...

After that you need to research various RE investing options available within active or passive investing and determine which one works best for you.

Then dig dipper into the option selected and learn it inside and out.

Final step is to take action!

Have you thought about buying a duplex, triplex or quad in your neighborhood and living in one of the units and renting out the others? Since it sounds like you have significant equity in your home, you can either take that equity with a refinance and pour that cash into the next purchase, and then rent out your current home. That way you get the benefit of already owning multiple rentals in the same area, can get your feet wet as a landlord and be off to the races as far as real estate investing is concerned. Now, all this goes out the window if you live in an expensive area and deals in your area won't cashflow. So the next option is to find a nice duplex, tri, or quad in an area that you think is up and coming and simply go and purchase something there. Best of luck on your future! 

@Kenneth Anderson Like some others said. I would start with the end goal in mind and work backwards. Fortunately, it looks like you may have a nice head start. Are you looking for passive or active income? It looks like you are near Baltimore. If that market interests you, there are a lot of buy and hold opportunities in the city that provide great cashflow! I would learn the landlord tenant laws though as it has been very tough on landlords. Bottom line.... get educated. Passive income rules in real estate!