Beginner Real Estate investor Midwest, Scale, have cash?

Question

Hello my name is Brad from the Chicagoland area. In the past couple of months I have become extremely interested in investing in rental properties. My wife and I just had a beautiful baby girl and really wanted some guidance. Ideally we would like to be financially free ASAP (Don't we all lol). Currently my wife and I hold commissioned sales jobs in which we take home anywhere from 500- 1m per year. We have the cash but want to select the correct strategies in order to maximize cash flow/ value which is why we came to this forum. RIght now all we are really doing is constantly furthering our education (podcasts,surfing MLS, books, forums etc). I see time and time again that we just need to " take action ASAP." I somewhat agree with this but would feel more comfortable with 100 more hours of education and some guidance.

I believe the the best strategy for us would be starting to look for multi- family deals and starting with 1 to gain experience ( then maybe a couple or move to apartment buildings)... not sure Chicago is the best area so maybe Milwaukee, or some chicagoland suburbs, or maybe im wrong, maybe i need to think about different areas of the country since our area doesnt seem too promising. This brings me to my next question. Should we consider Turnkey? I could invest in turnkey initially in order to learn the process, get the hang of everything (even though im sure cash flow would be less than ideal). Many people think that we should build our own team. Would love to build our own team once we decide on which cities/state to focus on. Once we secure a region to pursue should be start building the whole team before we even have any potential units to offer on? ( broker, contractor,lender, PM, etc-- or which ones are absolutely necessary when you want to offer).

Sorry I am kind of all over the place now.. but hoping someone on BP would be able to shed some light for us.

Basically, we have a good amount of cash and what people think is the best strategy for us knowing all of the above information. We would like to act as soon as we can but want to make sure we have all our ducks in a row.

Looking to connect to anyone and everyone in Chicago/ milwaukee, surrounding areas to learn as much as possible.

Bradley Payne · Answer

@Paul De Luca Thanks! Ill continue to further my knowledge in MFH in the Chicagoland area and start doing some research on which areas would best work for me. thx for the tips! Was thinking of starting to build a team in the next few weeks. Maybe we can connect in near future.

Bradley Payne · Answer

Thanks for the recommendations I will check into them today!

@Aigo Pyles

@Aj Parikh

John Warren · Answer

@Bradley Payne there are quite a few folks on BP who focus on this topic. I don't have a horse in this race, but you can look up Joe Fairless or you can look up @Ben Leybovich. He has been killing it in Phoenix. Again, there are a ton of resources out there and like anything, you want to vet the syndicator like crazy to make sure they know what they are doing and that their business plan makes sense.

Aj Parikh · Answer

@Bradley Payne Let me know if you want me to connect you with them. I would just need an email address.

Bradley Payne · Answer

@Jonathan Klemm Thanks man! Appreciate the support!

I completely agree with the whole competitive advantage statement. Going to take a step back and see what those are and see how I can utilize them. Let's connect in the future!

Bradley Payne · Answer

@John Warren I am going to start looking into limited partner syndications ASAP. do you know a good place to start? I found a couple books that I am going to read these next couple weeks. I do agree with you though. Thanks for the valuable insight I will also look for some partners. I want to go the route of syndications or apartment buildings/ MFH with property managers. I put half my money in the stock market and I really believe that real estate is the way for me to go with the other half, just need to find my path I guess.

Jonathan Klemm · Answer

@Bradley Payne - Congrats on the 1st post and a step in the right direction. I feel like we all go through your exact scenario when we discover real estate. There are so many different options and avenues to get you to your end goal of financial independence.

Getting on Biggerpockets and listening to the podcast really helped in the beginning but also created the shiny object syndrome. Definitely continue what you are doing, but reach out to some of the savvy investors here on BP and understand their story to see if it aligns with your vision. This will also help you start building your team which in my opinion is the most crucial part of real estate investing.

We all have some type of competitive advantage in life and real estate, figure out what yours is and how to leverage it to reach your goals as quickly as possible.

Aigo Pyles · Answer

Welcome to BP! I'm a turnkey provider based in Memphis, TN.

Aj Parikh · Answer

Welcome to BP!!! The income range you have, you can invest anywhere in USA. But if you are planning to go the turnkey route, I worked with Martel Turnkey to purchase a SFH in Cleveland and they have a good operation with decent COC returns. I also purchased a SFH in Memphis, TN using Roofstock and that is bringing in good cash flow as well. Let me know if you want to connect and chat about the purchase process.

John Warren · Answer

@Bradley Payne I am going to run counter culture here and recommend that you do not start out owning apartments. I think with the kind of financials you are referencing, you might be better served as a limited partner in syndications. You can get diversification and 7-8% preferred returns with 15-20% total returns. I don't have a horse in that race as I invest locally in multifamily and also am a realtor here in the Chicago western suburbs, but I think you would be potentially wasting your time on the smaller deals.

The other route you might consider is finding a strategic partner who is your boots on the ground. You bring the money and they bring the boots, etc. That might be a way to get more of the pie without sacrificing your time.

The thing is, owning and running apartments is not really passive. It doesn't take as much time as a W2, but it does take time. Your current income stream is high enough that it may not make sense.

Beginner Real Estate investor Midwest, Scale, have cash?

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