How long did you wait/research before you jumped into investing?

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How long did you wait/research before you jumped into investing?

Manda Gouvion
New to Real Estate · Keller, TX · Member since 2021 · 55 posts · 31 votes

It was just a couple of days ago I got this wild idea to invest in real estate. The thought originated as something my husband and I could invest in as a kind of self-paying college fund for our kids! So I'm halfway through the "How to Invest" book, 2 podcasts listened and learned and I'm curious... What was the length of time from hearing about real estate investments to taking action? And by taking action I mean finding your team, proposing a deal to a lender, etc. The more details the better!!

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John MorganPro Member
Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
5y

@Manda Gouvion

I knew nothing about real estate and made a cash offer with the listing agent (via email) after a couple drinks with my wife. We literally viewed this property and made an offer on it the next day without doing ANY research. The seller accepted and we had to figure out how to come up with 130k cash in only two weeks. Talk about freaking out, wondering where the $ would come from. Lol. That was probably one of the dumbest things I’ve ever done, but it got me in the game! Five years later I had 10 properties producing $4,500/month in passive income and found a major love for real estate investing. Most of my buys were just base hits. But all these base hits are starting to produce runs! No regrets!

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  • Dmitriy Fomichenko
    Solo 401k Expert · Anaheim Hills, CA · Member since 2012 · 18k+ posts · 6k+ votes
    5y

    Manda, welcome to BP, you are in the right place!

    I was in my mid 20’s, an immigrant without credit or savings. So it took me couple years to buy my first property... you situation probably different. But don’t rush, educate yourself and find a mentor.

    17Reply
  • John MorganPro Member
    Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
    5y

    @Manda Gouvion

    I knew nothing about real estate and made a cash offer with the listing agent (via email) after a couple drinks with my wife. We literally viewed this property and made an offer on it the next day without doing ANY research. The seller accepted and we had to figure out how to come up with 130k cash in only two weeks. Talk about freaking out, wondering where the $ would come from. Lol. That was probably one of the dumbest things I’ve ever done, but it got me in the game! Five years later I had 10 properties producing $4,500/month in passive income and found a major love for real estate investing. Most of my buys were just base hits. But all these base hits are starting to produce runs! No regrets!

    39Reply
  • Melvyn Mangion
    Member since 2021 · 16 posts · 1 vote
    5y

    One has to be careful before jumping into real estate investing. At times, if you make the wrong decision, it may take you a long time to recover. It is not just a matter of time. One also has to look at the opportunity cost. 

    1Reply
  • Dennis Wayne
    Member since 2020 · 339 posts · 356 votes
    5y

    Too long ! Do it now !! The time will never be just right

    9Reply
  • Jeff WhiteBusiness Member
    Realtor · Denver, CO · Member since 2016 · 278 posts · 371 votes
    5y

    @Manda Gouvion About two months for me, I read about house hacking from a book, and then that led me to BP, and then I consumed every article, podcast and forum post I could to get me comfortable in investing in my market, and I was ready! I got an agent, pre-approval from a lender, and started looking for prospective house hacks and then closed about six months later.

    1Reply
  • Ken NyczajPro Member
    Investor · Grasonville, MD · Member since 2017 · 453 posts · 415 votes
    5y

    @Manda Gouvion after my first podcast around the end of 2017 I started writing hand written yellow letters to houses that looked dilapidated. It’s a cheap way to get into real estate and with enough patience and persistence you’ll likely get a deal that could change your life.

    5Reply
  • Manda Gouvion
    OP
    New to Real Estate · Keller, TX · Member since 2021 · 55 posts · 31 votes
    5y

    @Dmitriy Fomichenko @Melvyn Mangion 

    @Dennis Wayne haha I still need my husband to research and feel comfortable too but he works 70 hours a week and has to work from home so it could probably be a while. He really trusts me though and knows I'm not exactly the riskiest person so I'm not going to do anything I'm not confident in!! Honestly his job is the reason I want to find another way to make more today cash and not just have these rentals as a investment for college funds for the kids. I think it would be wonderful for him to work part time? haha is that too ambitious?

    @John Morgan That's crazy!! How did you wind up coming up wit h the cash??

    @Jeff White That sounds exactly like me! I'm on here 2, 3 sometimes 4 times a day reading posts, making posts, reading comments, reading blogs and also reading their book during my kids' nap times and after bedtime. I'm OBSESSED! Starting to get a little fried from everything too though. Thank you for answering! I think eventually I'm just going to have to pull the trigger and trust my so-far knowledge and learn as I go. I think I have a good gut instinct that will hopefully guide me when I don't know something and I hope my personality will lead me to a good team. 

    @Ken Nyczaj Did that work?? Writing notes? Is that kind of like wholesaling? I haven't read into what wholesaling is yet...

    0Reply
  • Corey Hawkinson
    Rental Property Investor · Bloomington, MN · Member since 2019 · 404 posts · 542 votes
    5y

    @John Morgan “these base hits are starting to produce runs.” That sounds like my journey too. I started with a very simple property, a condo for $49k. Then a second condo. Then a single family.

    Amazing how with time those 3 properties have turned into a 4-unit, a 6-unit and under contract for a 5-unit. Getting started was one of the best decisions I ever made. I did very little research when I started but I knew the condo was a good cash flowing purchase. Of course, that was 2012. In hindsight, anything worked in 2012 although there were still just as many people saying real estate was a terrible investment.

    4Reply
  • Andrew FreedBusiness Member
    Investor · Worcester, MA · Member since 2020 · 1k+ posts · 1k+ votes
    5y

    @Manda Gouvion It took me years to gain the courage to get into real estate. It's all about having that fire and not quitting no matter what obstacles get in your way. That didn't occur for me until I read Rich Dad Poor Dad during covid and my entire perspective changed. In a matter of 12 months, I have 3 units under my belt with the plan of purchasing one more in the next 2-3 months. 

    To that point, I think you are asking yourself the wrong question. You should be asking yourself, did I nurture and lay the right foundation down for your fire / purpose to burn no matter what challenge is presented to you? If the answer to that is yes then jump in. If not, then keep educating yourself until you get to there. 

    [email protected]781-964-3200Podcast Guest on Show 69 Doors from ONE Real Estate Deal Using Other People’s Money
    8Reply
  • Manda Gouvion
    OP
    New to Real Estate · Keller, TX · Member since 2021 · 55 posts · 31 votes
    5y

    @Andrew Freed This is fantastic advice, thank you. I have heard SO many people mention this book! I've never been interested though because I'm not a dad haha but now I have to read it. Can I ask how you invested in these units? 

    0Reply
  • Andrew FreedBusiness Member
    Investor · Worcester, MA · Member since 2020 · 1k+ posts · 1k+ votes
    5y

    @Manda Gouvion Of course. You have to read that book, it is the inspiration for so many millionaires out there. 

    I purchased a 3 family via a FHA loan @ 3.5% down. I have decent cash reserves but I am not paying for any of my deals via cash. I opened a home line of credit (HELOC) on the first condo I purchased in 2015, which funds all of my real estate transactions moving forward. Equity is a magical tool.

    [email protected]781-964-3200Podcast Guest on Show 69 Doors from ONE Real Estate Deal Using Other People’s Money
    2Reply
  • Peter MckernanBusiness Member
    Residential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
    5y

    @Manda Gouvion it took me and a real estate investing partner about 2 months from shifting gears from buying a house we were going to live in together then later rent out to buying a rental. If we would have went with the first option, we would have not even cash flowed in the market we first looked. We switched gears and markets within that two months, only knew to look for cashflow and no other knowledge on numbers, then made an offer. It was the best investment I made with that partner "luckily." That tenant has been in there for 8 years now with great cashflow and BRRRR the deal!

    The McKernan Group4.957 Reviews
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    4Reply
  • John MorganPro Member
    Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
    5y
    Originally posted by @Corey Hawkinson:

    @John Morgan “these base hits are starting to produce runs.” That sounds like my journey too. I started with a very simple property, a condo for $49k. Then a second condo. Then a single family.

    Amazing how with time those 3 properties have turned into a 4-unit, a 6-unit and under contract for a 5-unit. Getting started was one of the best decisions I ever made. I did very little research when I started but I knew the condo was a good cash flowing purchase. Of course, that was 2012. In hindsight, anything worked in 2012 although there were still just as many people saying real estate was a terrible investment.

    Love it! You have a great story. I didn’t start until 2015 and everyone told me we were in a real estate bubble and to wait  Glad I didn’t wait and just kept plowing through. I’m not the brightest bulb, but I knew real estate generally goes up over years/decades I didn’t need to get rich right away like many people on here. I wasn’t swinging for the fences. Base hits were ok for me. But buying a couple properties a year for five years was my way of dollar cost averaging in a way. If the numbers worked, then I dove in. People will always need a place to live and mine are mostly in C+ class hoods that have the highest demand during good times or bad. And within 5 years I had 2 million dollars worth of rentals  I still owe 700k on them with 15 year loans, but their values keep going north. And will all be paid off by the time I retire generating 10-12k/month.  Glad I didn’t listen to all the negative people who told me I shouldn’t buy! 

    8Reply
  • John MorganPro Member
    Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
    5y
    Originally posted by @Manda Gouvion:

    @Dmitriy Fomichenko @Melvyn Mangion 

    @Dennis Wayne haha I still need my husband to research and feel comfortable too but he works 70 hours a week and has to work from home so it could probably be a while. He really trusts me though and knows I'm not exactly the riskiest person so I'm not going to do anything I'm not confident in!! Honestly his job is the reason I want to find another way to make more today cash and not just have these rentals as a investment for college funds for the kids. I think it would be wonderful for him to work part time? haha is that too ambitious?

    @John Morgan That's crazy!! How did you wind up coming up wit h the cash??

    @Jeff White That sounds exactly like me! I'm on here 2, 3 sometimes 4 times a day reading posts, making posts, reading comments, reading blogs and also reading their book during my kids' nap times and after bedtime. I'm OBSESSED! Starting to get a little fried from everything too though. Thank you for answering! I think eventually I'm just going to have to pull the trigger and trust my so-far knowledge and learn as I go. I think I have a good gut instinct that will hopefully guide me when I don't know something and I hope my personality will lead me to a good team. 

    @Ken Nyczaj Did that work?? Writing notes? Is that kind of like wholesaling? I haven't read into what wholesaling is yet...

    I pulled $ out of my Roth IRA, HELOCS and 401k loans. That's how I got the cash. Then did some cash out refis to use that equity to nab more properties.

    1Reply
  • Manda Gouvion
    OP
    New to Real Estate · Keller, TX · Member since 2021 · 55 posts · 31 votes
    5y

    @Andrew Freed oh man that's genius!! Can you use the equity of multiple homes together to fund a deal? Like say you pull a HELOC out of 5 rental properties that you originally put $20k down on for a total of $100K to cash purchase something? Our original plan was to put $20-$24k down on a rental property every year (this was when we didn't know of any other option than traditional real estate investing)

    1Reply
  • Manda Gouvion
    OP
    New to Real Estate · Keller, TX · Member since 2021 · 55 posts · 31 votes
    5y

    @Peter Mckernan dang that's awesome! Did you guys have cash you'd saved up or did you use lenders? How did you fund the rehab?

    @Corey Hawkinson Yeah this market is tough. I'm not seeing a whole lot of great options where I'm from. That's another reason for my interest in Lon distance investing.

    @John Morgan that's INCREDIBLE. Why did you choose to do 15 year notes? Do they cash flow at all right now? Every time I run numbers for 15 year mortgages we're negative a good -2k a year until it's paid off. I originally had wanted to do 15 year mortgages so that if I bought a property by the time each of my kids were 3 years old it would be paid off by the time they graduated HS but after seeing the numbers I didn't think we could swing that for 15 years for all of our kids (we only have 2 now but we'll probably have more)

    0Reply
  • Ken Naim
    Investor · Lake Worth, FL · Member since 2016 · 233 posts · 140 votes
    5y

    @Manda Gouvion I was in college with no money, watched one late night infomercial which i ordered and within weeks I was looking for my first rental. This was in the late 90s.

    0Reply
  • Joshua D.
    Investor · Columbus, MT · Member since 2013 · 1k+ posts · 1k+ votes
    5y

    @Manda Gouvion

    Each person will have a different answer to this question based on where they are at with their PERSONAL finances.

    But I think way more people error on the side of learning and researching way to much. Rather than taking imidiate action on solid/proven methods.

    Depending on where you are at in life I would always start with House hacking. Get 3 books on the topic. Read them in 2 weeks and then buy a house hack.

    Next would be with flipping or BRRRR. Depending on goals and income needs.

    I didn't know about bigger Pockets when I started and had no outside info untill property #3 was bought. I would recommend learning as much as possible AS you take action. Not AFTER you take action.

    5Reply
  • John MorganPro Member
    Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
    5y
    Originally posted by @Manda Gouvion:

    @Peter Mckernan dang that's awesome! Did you guys have cash you'd saved up or did you use lenders? How did you fund the rehab?

    @Corey Hawkinson Yeah this market is tough. I'm not seeing a whole lot of great options where I'm from. That's another reason for my interest in Lon distance investing.

    @John Morgan that's INCREDIBLE. Why did you choose to do 15 year notes? Do they cash flow at all right now? Every time I run numbers for 15 year mortgages we're negative a good -2k a year until it's paid off. I originally had wanted to do 15 year mortgages so that if I bought a property by the time each of my kids were 3 years old it would be paid off by the time they graduated HS but after seeing the numbers I didn't think we could swing that for 15 years for all of our kids (we only have 2 now but we'll probably have more)

    I was older when I started (44) so I went with 15 year notes. Yes they cash flow a little ($4,500/month not including cap ex or vacancy). I’m ok with low cash flow now because I have a W2 job. My goal was always to have them paid off quick and have 10-12k/month in passive income from 10 properties to help supplement my 401k.  For you, I would go with 30 year loans if they aren’t cash flowing. Pay extra towards principal if you want them to get paid off by the time your kids are ready for college or whatever. 

    2Reply
  • Manda Gouvion
    OP
    New to Real Estate · Keller, TX · Member since 2021 · 55 posts · 31 votes
    5y

    @John Morgan Thanks! My husband is really pushing for doing 30 year notes just for more flexibility with monthly cash flow. I suggested having one 30 year mortgage for every 15 year mortgage so we have those 30 years paying for the 15 year ones. We're not too worried about boosting our income immediately since my husband loves his job (however it would be nice for him to work part time or something) but we'll just see. I think our first goal is to house hack. Currently we have baby #2 due in 3 months so I don't think we have any goals of doing anything for another 6 months which gives us a lot of time to save up and research! One problem we have though is whether or not we want to stay in Texas/how long we want to stay in Texas. How long do you have to live in a property before making it a rental without legal complications? Or how do you change the paperwork for when you move out?

    0Reply
  • John MorganPro Member
    Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
    5y

    @Manda Gouvion

    Stay in your house for at least one year then rent it out. I have a friend that does this. He’s on house number 3. He gets homes with only 3.5 or 5% down and stays in them for a year. Then rents them out and refinances later and buys the next one. 

    30 year loans are good. I’m just not disciplined to pay all the extra principal to pay them off in 15 years. I tried that with our 5 year car loans and I’ve only made one extra payment in 3 years. I was hoping to get them paid off in half the time. I suck. lol. But it seems like most people on here are disciplined to do it if they’re trying to get them paid off soon. 

    3Reply
  • Peter MckernanBusiness Member
    Residential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
    5y

    @Manda Gouvion We saved up for the down and used a lender on the financing. We used cash out of pocket to fix up the property. 

    The McKernan Group4.957 Reviews
    WebsiteView Page
    2Reply
  • Manda Gouvion
    OP
    New to Real Estate · Keller, TX · Member since 2021 · 55 posts · 31 votes
    5y

    @John Morgan We're definitely disciplined but I think I'd wind up putting the money I could be paying down the mortgages towards more properties... I'm not sure! I'm a HUGE numbers person so I'd probably run the math 4 times every other weekend to come back to the same decision. that's usually what I do with our finances lol when we were paying off $70k student loans that was basically my hobby was re-running numbers haha

    1Reply
  • Manda Gouvion
    OP
    New to Real Estate · Keller, TX · Member since 2021 · 55 posts · 31 votes
    5y

    @Peter Mckernan so it was all basically your money besides the mortgage! I'm impressed! That's what my husband wants to do. He wants to avoid private/hard money lenders and just go traditional on everything. But he hasn't read the book or researched nearly as much as me so he plans to get more educated and then we'll talk haha

    0Reply
  • Adam Martin
    Rental Property Investor · Member since 2020 · 1k+ posts · 1k+ votes
    5y

    It took me 12 years from when I decided I wanted to invest in real estate to when I had my first renter.  While this sounds like a long time in all fairness I was a freshman in high school.  I worked at a pool and my boss owned rentals I worked on on the side and from there had another family at the pool that found out I was doing it and had me work on theirs as well.  I just did simple stuff like painting, tearing up carpet, removing trash, and taking care of the lawn but it got me going.  If any of you can find a motivated highschooler looking for cash do it, I later realized I was a gold mine and thought the $7.50/hour cash they were paying me was awesome but this was also in the early 2000's.  After college my wife and I bought a house and stayed for a few years and finally had enough to buy a rental.  I was looking at some low income housing under $60k in some sketchy neighborhoods.  One house had the door kicked in and was super creepy, I realized when I was using the flashlight on my Glock partially to see, partially as I was afraid I was going to be killed this may not be the right place for me.  Decided to rent out our current home and upgrade and have been sticking to B+ class since then.  

    For the 15 vs. 30 years figure out what your goals are and this will tell you long to have a note for.  I always do 30 when I can but have had to do 20 year 4/1 arms as I have scaled and didn't qualify for conventional but I hope to refi those to 30 year soon.  I don't need the cashflow to live but want it to grow faster.  I have put my seed money in and at this point it needs to be self sustaining from rents and investing the money into stocks while waiting for the next deal.  If you want to pay it off earlier you only have to have the diligence for a short period while you set up auto pay with the additional principal and you have the option of backing off if you need to.  

    1Reply
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