New investor with liquid cash.

OP

New to Real Estate · Lancaster, PA · Member since 2017 · 15 posts · 17 votes

5y

Originally posted by @Michael Magno:

Depends on what you hope to accomplish. I would figure out the market you want to invest in, and find an Investor friendly Realtor, and start there.

Hi Michael, thanks for responding! The market I currently live in was ranked recently as a top place to retire and one of the top cities to live in the country. It's been an "up and coming" market for a long time with loads of new restaurants, shopping centers, etc.

My wife is actually a current real estate agent so I have that going on for me as well!

OP

New to Real Estate · Lancaster, PA · Member since 2017 · 15 posts · 17 votes

5y

Originally posted by @Krystal Esdaille:

@Austin Smucker

Hi Austin!

I’m also located in the Lancaster, Pa area!

What’s your end goal?

Hi Krystal!

What area are you in? Do you currently have any rental properties around? I know our market is super crazy right now!
The end goal would be to have enough rental properties to "retire" from my job and live off of that income while continuing to accumulate more and more. I also love the idea that Brandon Turner does for his kids. He buys them each a rental property to have paid off by the time they are set to go to college. I have 2 little ones right now!

Ultimately, I'm working on creating a sheet with more concrete goals!

2 Reply

OP

New to Real Estate · Lancaster, PA · Member since 2017 · 15 posts · 17 votes

5y

Originally posted by @Seth Hochberg:

Congratulations on making the jump into Real Estate. A lot of people will see that 450k with envy, most people are starting out with 20k and trying to stretch that as far as possible. With a lot of capital, you should easily be able to score a cash-flowing property as long as you do your due diligence. As the common phrase goes, "Cash is King" so if you make all-cash offers, you'll have the upper hand and be able to get better deals than other people who are financing. And then, you could recoup your capital by doing a cash-out refinance afterwards. BRRRR, is another possibility to look into. Just a thought, but take it with a grain of salt, as I am new as well and still learning!

Seth,

Love your ideas! I agree, I'm very blessed right now to have the cash I do to start my journey. I've definitely thought a lot about BRRRR. I recently bought the book written by David Greene which I plan on reading next!

I appreciate your insight!

Tyler Lynn

Rental Property Investor · Tallahassee, FL · Member since 2018 · 55 posts · 48 votes

5y

Austin,

You are in a great place! When I got started in RE, I had 0$ to spend. So I partnered my way into deals with sweat equity and acquiring/managing the deals. What I would recommend is connect with someone that is currently doing multifamily deals in your market. Partner with them for your first deal; I'm sure you can work something out where you bring most the capital, they find the deal and work with you through the entire process. Investors are always looking for other investors with cash. I'm sure they would be more than willing to partner and then you will learn it first hand from someone already doing it successfully. This will put you in an amazing position to start doing it on your own after just one deal and take a lot of the risk and fear out of it.

11 Reply

OP

New to Real Estate · Lancaster, PA · Member since 2017 · 15 posts · 17 votes

5y

Originally posted by @Tyler Lynn:

Austin,

You are in a great place! When I got started in RE, I had 0$ to spend. So I partnered my way into deals with sweat equity and acquiring/managing the deals. What I would recommend is connect with someone that is currently doing multifamily deals in your market. Partner with them for your first deal; I'm sure you can work something out where you bring most the capital, they find the deal and work with you through the entire process. Investors are always looking for other investors with cash. I'm sure they would be more than willing to partner and then you will learn it first hand from someone already doing it successfully. This will put you in an amazing position to start doing it on your own after just one deal and take a lot of the risk and fear out of it.

Tyler,

Thanks, awesome idea! Any tips on networking (during this weird pandemic time!!) and finding somebody willing to take on a mentee? I agree, the capital I have would be a great starting point...

Appreciate your insight!

Steve Vaughan

Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes

5y

My uncle sold appreciated property in Lake Tahoe amd moved to small town MT with a pile of $. He bought a bunch of 'cheap' property and lost his a$$.

I need at least 15% net equity on any RE I buy. Last $600k cash buy was worth over 700.

Don't use your cash unless it gets you a discount or 8s an odd or non-bankable property at a huge discount.

Define your goal and criteria and buy below FMV.

3 Reply

Tyler Lynn

Rental Property Investor · Tallahassee, FL · Member since 2018 · 55 posts · 48 votes

5y

Being on here is a great way! I would use the search feature on here and continue to search your market each day to see who is active. Meetups are the other best way, most meetups have gone virtual and are still active. If there aren't to many active investors on here in your market or meetups in the area, go driving for dollars. As you are driving for dollars if you see multifamily that is recently updated and looks great, find out who the owner is. Most likely it will be someone who is investing in the market. And again with bringing the capital you will be going into a deal as a partner more than a mentee. You will just be more of an active learning partner. There are very few investors out there that wouldn't want to have you as a capital partner just because you want to learn the process as you go!

Jacob Malakoff

Rental Property Investor · Member since 2019 · 31 posts · 11 votes

5y

Depending on your goals I think partnering and/or doing some private lending is a good way to go. That way you can put your money to work and learn at the same time

Julian Colvard

Property Manager · Atlanta, GA · Member since 2016 · 83 posts · 42 votes

5y

1. Determine what the end goal is first. What do you and your wife want most, cashflow, appreciation, high returns with headache tenants, lower returns with tenants who almost never call you, the speed of retirement, etc.

2. After you determine what you want, either buy 2-3 books around it, buy a course/hire coach, and or watch a few youtube videos on that topic.

***3. Contact Matt Faircloth. He wrote the book "Raising Private Capital" which is published by biggerpockets. He is not far from you. You can lend him your money and basically get paid to learn from him. Since you would be lending him money, he would answer all questions you have + you get a hands on, first hand look into what a multimillionaire full time investor does regularly.****

Personally, I would invest into nicer single family homes in B+ areas with expanding populations and close proximity to grocery stores and 5+ (5 on a scale from 1-10) school, looking for cash on cash returns of at least 8%. Those areas are primed for consistent appreciation (typically 3% per year in Atlanta, GA) AND the tenants are less of a headache. ***I would contact 5 agents and have each one make 2 offers 30k below list price per week for houses on the MLS. I do this now, but I make, on average, 50 offers per months (works excellent!).*** I would not buy any of these houses cash - i would use loans (from small local banks and credit unions bc they will finance all of your properties, most likely) and partners. I'm 26 with zero responsibilities to add context as to why I would invest 450k like this.

9 Reply

Thomas J Allen

Detroit, MI · Member since 2019 · 15 posts · 7 votes

5y

@Austin Smucker

$450k? Awesome job getting to that point. I'm just curious, what did you do to obtain that? I'm trying to get to that level!

Frank Hinck

Rental Property Investor · Minneapolis, MN · Member since 2020 · 540 posts · 285 votes

5y

@Austin Smucker

It depends how involved you want to be in the process: do you want to buy turnkey, buy value add, invest in syndication, loan your money in HMLs, manage your own or have a property manager, local / in state / out of state? - there are so many options. Definitely better to start in the 2-4 units before getting into the apartment complexes.

[email protected]832-776-9582 Podcast Guest on Show #469

Carlos M.

Investor · Lancaster, PA · Member since 2016 · 94 posts · 356 votes

5y

@Austin Smucker , I’m from Lancaster as well. I’ve been in the game for 11 years now. I have decent connections here. I started with a $60k home equity loan . Fast forward 11 years , we now own 80 apartments, 20 parking spaces, 15 garages all in Lancaster. Lancaster has treated me well!! We should chat

3 Reply

Ethan Perry

Minneapolis, MN · Member since 2019 · 54 posts · 53 votes

5y

@Seth Hochberg. That’s a good idea. If you can pay all cash, you can get it right back with the refinance. Win win.

2 Reply

Wale LawalBusiness Member

Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes

5y

@Austin Smucker

Your are on the right path.

Goodluck 👍

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Nick Robinson

Rental Property Investor · Murrieta, CA · Member since 2020 · 338 posts · 344 votes

5y

@Austin Smucker
Austin I think that is a misconception on starting smaller is safer. The bigger you go the safer it is. Economies of scale, more streams of income(units), loans based on the property not on the borrower, financing, and barrier to entry. Biggest thing for me is that if you buy a house and your tenant moves out your at 100% vacancy but if you buy 20 units and one person moves out you only have a 5% and the other units help cover the cost of the vacant unit. What you need to get a loan is capital and a building that cash flows. The bank is also your friend when you get a commercial loan. The bank will not loan on a bad deal, but if you are getting a residential loan as long as your DTI looks good they will loan on it. Even if its a terrible deal.

5 Reply

Wes Barnes

Rental Property Investor · Lubbock, TX · Member since 2019 · 34 posts · 14 votes

5y

@Austin Smucker

Good Evening Austin,

Which market are you trying to invest in? What is you're primary goal, cash flow or equity?

Jake Arnold

Rental Property Investor · Scranton, PA · Member since 2020 · 44 posts · 9 votes

5y

@Austin Smucker I’m close to Lancaster!

Doug Pintarch

Rental Property Investor · Harrisburg, PA · Member since 2018 · 369 posts · 406 votes

5y

@Carlos M. and @Austin Smucker

Gentlemen! If there is any interest in a meeting to discuss options in the Lancaster area please consider me in, if you'll have me. I live in Harrisburg but have worked here in Lancaster for the past 17 years. I am a Short Term Vacation rental owner now but I am interested in doing something local.

Jake Arnold

Rental Property Investor · Scranton, PA · Member since 2020 · 44 posts · 9 votes

5y

@Austin Smucker I’m close to Lancaster!

John Egnor

Member since 2018 · 4 posts · 1 vote

5y

@Julian Colvard

@Julian Colvard intriguing comment about 5 realtors making offers. Can you give me more info about that? I like that idea.

5 realtors in 5 different markets or same market? How much are the houses worth? 30k less on 300k or 30k less on 100k properties?

Do you choose the properties or do you have the agent do it?

Thanks!!!

Dylan ThomasPro Member

Rental Property Investor · PA · Member since 2019 · 63 posts · 57 votes

5y

@Austin Smucker I invest in Harrisburg. Finishing up rehabbing my 2nd triplex this week, while flipping a SFH and wholesaling another. Hit me up. I'm always down to talk Real Estate

Brian Alfaro

Multifamily Syndicator · Houston, TX · Member since 2018 · 188 posts · 192 votes

5y

@Austin Smucker I am going to send you a PM! I believe I have a few contacts in your area that are Multifamily focused you can connect with. The response to your answer depends on how active you want to be.... if you are all about spending a lot of time being hands on hunting for deals, negotiating, managing the manager, etc then you should be finding a partner (if needed) to take down a small asset with your own funds. If not, I would suggest investing passively so you can learn the business and not have to spend much time on it.