Hey everyone in the Springfield/ Waynesville, MO area!
I'm a college student and I just recently discovered the business potential of real estate and I've been so obsessed with learning about the industry I've been consuming video and audio content from youtube and podcasts NON-STOP for a 3 months.
I want to learn from hands-on experience instead of just videos and podcasts, but I'm not interested in becoming a real estate agent or broker.
If you were to start over and you had nothing, where would you start? Who would you connect with? How would you bring value to individuals in the market? Are you someone I could network with or work for?
I'd like to know the most direct way to get involved in the market.
Thanks in advance for the advice, and I hope I can network with some of you soon!
Hey man. I live in SW MO as well. I have been doing this pretty hardcore for about 2 years now. Up to 6 rental properties. I’m by no means an expert, but if you have a question be happy to help.
Your thoughts about hands-on learning are good. LLing can be learned on the job, but there are a lot of mistakes to be made, and not everyone who reads a blog / watches a podcast is cut out for this. If I were starting out again today, I'd try first figuring out what area I wanted to invest in: land lording, flipping, wholesaling, notes, etc. Then figure out your target customer: Class A tenants, Class B....Class C.... lower? Some people are easy to deal with: some are hard. Some lie to your face and do not feel one ounce of guilt.
Land lording is a PEOPLE business with houses as our INVENTORY. Get the wrong customer (Tenant) and it won't matter how great a deal you got on the house itself.
Flipping and wholesaling are very labor intensive. They are not "passive" income by any stretch. Are you prepared to work 50-60 hours a week and make no money for 2-3 months....hoping at the end of all that to make a big catch, but no guarantee?
I don't want to discourage you, simply to open your eyes a bit. Blogs and podcasts are all fine, but when the reality is lots of nights and weekends doing jobs that aren't much fun. Few rise to high levels of success. It can be lucrative if you're in it for the long-play.
I'd love the opportunity to connect with you both, if possible. I plan on making the 1.5 hour drive to Springfield for the next REI meeting this month.
Mr. Whiting, I genuinely appreciate the information and I'm actually MOST interested in the more labor-intensive strategies to build capital and then move into landlording in the future. You make some great points and I'll make sure to keep a long-term strategy the core of my plans and decide on a target demographic I want to service in my area.
@Kraig Sumpter do you have any contact information for the Sprimo REI group? Do they have a Facebook page?
BUT, you can find info about the REI group through the MeetUp app. Just search Springfield, MO Real Estate and the day and time should show up for the next meeting!
@Kraig Sumpter thanks for that info. I’ll try that MeetUp app and see what I can find. I didn’t think we had a group here. The closest I could find was StLouis and Kansas City.
@Kraig Sumpter and others, I believe the Springfield REI meets at the Hilton Garden Inn on the 3rd Thursday of each month.
Absolutely! Thanks for the info!
Eric, thank you for addressing a question that’s been keeping me stagnant....
What type of investment should I start with?!
I have a fair amount of equity in my residence, good credit, and potential access for either cash out/HELOC/HELOAN, or private funding. I'm ready to build some future passive income.
My thought is to start with a small, inexpensive fix & flip, sell that, and then look for a long term rental for more steady cash flow. Then reassess. Maybe go bigger with apartments at that point..?
I’m also in a high market in CA, where I can’t afford anything locally. Open to investing in other states.
Your, or other readers’, input would be appreciated!!
Updated over 2 years ago
Oops....Erik, not Eric :)
@Joanna Lilly sounds like a good place to start. Doing some construction yourself and dealing with contractors is a good ground up strategy and many here say REI is a construction business. Please know that flipping a house is often UNDERESTIMATED, and the most value you might get out of your first one is an a$$ kicking and waisted time that makes you think harder to be smarter the next time. With that said, just be extreme on you potential profits and buy low, but don't underestimate rehab if your looking to buy distressed for a discount. For your first one, you'll either need a saint of a contractor if you invest from afar, or you'll need to be hands on and do some traveling. You can def find a low priced property in MO and very relaxed codes and laws in most smaller towns to start your REI! It's probably hard to turn a profit on flips in MO unless you're in St. Louis etc. I could be wrong but Springfield seems to be a little bit of a hick city. (All respect to hicks!)
@Kraig Sumpter that’s a tough question about where you’d start over @. A lot of this stuff is circumstantial and opportunistic, so you just have to look for deals in the different things that make sense to you, take action and then figure where you want to go from there. Just start taking action by doing something (which you are connecting). Find a deal, find some funds and try it out. I’ll probably move my whole family to SEMO in the next 6 mo. so I’ll keep you on my radar and try to connect sometime.
@Jonathan Greer Sounds great! Thanks for the insight and advice. I hope your move goes well and I can bring you value in the very near future!
@Joanna Lilly , unless you have a past track record of starting and completing BIG projects that are well outside your comfort zone, I would start with something small. 2 bed / 1 bath SFH rent, or maybe a 3 bed / 2 bath. Don't go for one that requires a ton of work unless you plan on using it as "education".
Investors fail for a variety of reasons, and here are just a few...
1) They try to DIY everything and instead of being real estate investors end up becoming a combination of "go-fers, Mr/Mrs Fix-it, painters, plumbers, electricians, land lords, attorneys, etc". Any money saved is quickly lost due to doing a bunch of things only marginally well or poorly, and in this game it only takes one moderate size mistake to eat up the profits of years. Plus you just get burnt out after hitting 4-5 units, especially if you've got a family and/or day job.
2) They jump in without thinking what their goals are. Should write down goals for 6 months, 12 months, 2 years, 5 years. Even if you change them later, that's okay, but have a plan and work towards it. It's the only way to measure whether or not your activities is achieving what you really want.
3) Strive for growth (units / doors) instead of profitability. They think they can refinance their way out of everything. Remember 2009-2011! Learn to maximize profits first, then go get those doors and they will treat you well!
4) They don't seek professional growth. Lots of Mom 'n Pops out there "winging it" , and when the stuff hits the fan and they get a bad tenant or contractor they don't know what to do, it costs a lot of money, and they get disillusioned. You should make a point to attend at least a local REI group, and at least one national or regional conference per year.
5) They aren't cut out to be land lords. Everyone thinks land lording is easy. Bad land lording is easy. Good land lording is an exciting challenge. LLing can be a burden to some people. Unless you're used to dealing with people owing you money (i.e. you have a small business), I'd recommend trying 1 house first and seeing if you like it. Lots easier to get rid of 1 house than a 10-plex.
There is plenty more, but that's a good start. Good luck!
Thanks for your input Jonathon! I'm definitely cautious, and have limited DIY skills. I've helped with flooring, building a raised garden bed, installed a toilet, etc. I think looking closer to home is probably best for my first rehab. CA is tough, but I'm right next to NV, which potentially has more affordable opportunities. I'm not desperate, I do my homework, and am always willing to walk away.
Thank you Erik!
I recently joined an investment group meetup, and am fortunate to have a local RE mentor help me get started. I went in on a virtually no-risk, low-buy in deal with him....literally making gas money every month for 6 years, haha....but it's valuable going through the whole process with the assessing the note, going through the title company, considering the legalities, going through all the paperwork. And per our contract, I can back out anytime with no penalty. I know this will not be the case going forward!
I also dabbled in the stock market and put some money into Lending Club, when I got a small inheritance a few years ago. Although I've made a little money with those, I realized that I would rather go for tangible investments, than gamble with factors that are beyond my input.
I'm at a career crossroad right now where I can apply for an 8-5, M-F good job, or continue my self-employment while diving head first into REI. As I mentioned, I have some equity to do so, and the drive to learn, and do the diligent and dirty work. But I'm also super cautious. The numbers have to work! I've enjoyed the freedom and flexibility of my self-employment schedule, and am hesitant to give that up. But I definitely have a lot more to learn, and earning the extra time and money with a "real" job is probably the right thing to do for now. Ugh. Adulting is hard.
Thanks again. I'll look for more of your posts.
ps. yeah, I remember 2009-11 well. I just recently had my bankruptcy wiped from my credit report, after going all in on my bakery business!! Lesson learned, but I wouldn't change anything :)