Brand New Investor trying to find my start!

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Brand New Investor trying to find my start!

Edward Webb
Member since 2021 · 6 posts · 2 votes

I'm brand new and I'm still going through the forum and learning and reading.

I've found my interest lies primarily in commercial multi-family. But I've been reading so much I get myself confused. I'm going to continue reading but some answers and suggestions are greatly appreciated.
TL;DR if you had $100k to start your investment career in real estate where would you start?

My dreams: Owning enough rental properties to never miss a moment of my future children growing up. I would like to teach others through an online presence on how to become financially free, and consult the next generation that wouldn't otherwise be able to afford consulting on how to take their lives to the next level.
What I would like to happen: I'm in the DFW area. I'm planning on going back to college at UNT and getting a degree in finance. I'm going to live in a small apartment and use my GI bill to go to school and live off of. I'm considering going into the reserves(currently finishing my active contract) for various reasons. I'd like to purchase a property with an NOI of $30-50k while putting down $80-120k. I'm not even sure that it's possible. But in the short term I can manage and do the handy-man work myself to a certain extent.
The goal: wherever I start, the income from the investment will roll into my next investment, becoming a powerful snowball of income to build my dreams and security off of.

What I'm doing right now: I'm going to begin working on my real estate license soon, I think that would be a great way to network with people. I also have plans to begin some side hustles suggested by a biggerpockets blog post. I am researching and doing a basic analysis of properties every day. Once I get my car on Thursday I will be driving around neighborhoods and looking at any and all nearby properties. I'm also looking for my own small apartment to live in.

If it were possible: the short term goal is to buy a property near enough to my school that I can just live there, I'd even pay rent to myself so the rent sheets wouldn't get messed up. But the properties that I'm seeing are out of my price range. I don't qualify right now for a normal mortgage or a VA loan.

So where do you guys think I should start? I've found some cheap properties that are in Arkansas and far western Texas that could possibly make that money. But I haven't looked at them. And the idea of LoI's are kind of intimidating to me. As I mentioned, I'm new to all of this. I would really love a mentor or a coach, I'm not exactly sure how I'd pay in the long term. But I'd have to figure it out!

If you think I should take a completely different route I'm open to ideas. I've even considered trying to buy a storage facility or a car wash.
What kind of down payment % should I expect on a commercial loan? 30%? I have near perfect credit if that even matters.

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

    @Edward Webb did you read the Beginners Guide? 

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  • Edward Webb
    OP
    Member since 2021 · 6 posts · 2 votes
    5y

    @Dmitriy Fomichenko not in a while, and I probably skimmed it. I'll go through it to make sure.

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  • Deneuve Brutus
    Investor · Woodbridge, VA · Member since 2019 · 162 posts · 64 votes
    5y
    • @Edward Webb Welcome to BP! I'm a fellow veteran, reservist as well. Definitely go reserve, it really helped with schooling and networking. I'm a part-time AD agent-investor. It does wonders for your Real Estate (RE) career. Looks like you already have a great plan, with actionable items. Go to school, buy a fourplex. Things to think about:

      Have you thought about out-of-state investing to broaden your properties?

      You may want to rent out on a per-room basis this is what I did when I was in school.
    • It is normal in college towns/near colleges. However, due to the pandemic, this may be difficult.

    Since you cannot use VA loans at the moment, you should look into FHA or 203K loans. Check with your local city, city banks, and credit unions for first-time homebuyer programs, Wells Fargo has a few good ones. You can partner with other veterans in the school since you are interested in commercial property to get multi-family investments. There may be a few going up for sale due to the pandemic and school closures. You can network until you find some private lenders who will give you the loan. There are many lenders on BP under Network -> Mortgage Lenders you can work with, definitely seek "Portfolio Lenders" in your local area and let them know your business plan. I'm not sure if you've looked into triple-net retail properties, such as strip malls. It may be the logical next step after you have financial freedom, or you can jump directly there if you have $100k. Definitely join a few investor meetups in your local area. It helps with networking. To make sure your money goes a long way, invest with others so that you can increase your velocity of money. Read as many books published by BP as possible, and listen to ALL of their podcasts. I believe all their information is equivalent to a B. S. in Real Estate. I should know because I've looked into getting an M. S. In Commercial Real Estate.

    Good Luck!

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  • Edward Webb
    OP
    Member since 2021 · 6 posts · 2 votes
    5y

    @Deneuve Brutus thank you for all that great in depth advice!

    My understanding from my talks with a handful of lenders is that I don't qualify for a traditional residential mortgage because I don't have a source of income right now. That's one of the primary reasons I'm looking into 5+ units.

    I have thought about investing out of state! But I haven't looked very far. I've found two properties in Arkansas, and one that's so far west in Texas it might as well be in another state. I'll continue to broaden my scope to look for a good deal.

    I think part of my problem right now is I want to get started now now now. But I know this first property could take me several months to a year. I need to take it slower, do my research and find something great before I dive into a mistake.

    I also need to reread certain sections of BP's commercial multi family book to get ready for my journey!

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