What Investment Strategy did you Start With?

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What Investment Strategy did you Start With?

Chase Yokoyama
New to Real Estate · Honolulu, HI · Member since 2019 · 42 posts · 16 votes

Aloha, everyone! Out of curiosity, what strategy (Fix & Flip, Rent, Wholesaling, House Hack, BRRRR, etc.) did you use when you bought your first investment property. I know there are so many variables to consider but I want to keep it as simple as possible. I am just eager to see what people usually start off with.

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Jorden P Dupont
Real Estate Agent · Windsor Locks · Member since 2020 · 20 posts · 21 votes
5y

Hey Chase! I have not done my first deal yet but I'm am pursuing a house hacking deal, a live in flip, or possibly even a BRRRR. These types of strategies suit my current goals, lifestyle, and situation the best. House hacking at 25 with no kids is a lot easier to pull off than someone who is older, looking to settle down, and possibly has kids already.

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  • Joe FunariBusiness Member
    Real Estate Agent · Keller, TX · Member since 2017 · 850 posts · 825 votes
    5y

    @Chase Yokoyama Start with Wholesaling. It will cost you a whole lot less if you make a mistake than if you start with flips as an example. Wholesaling helped me understand the purchase contracts and what makes a good deal to other investors looking to purchase a rental or flip. Plus, its one exit strategy that you don't have to worry about finding buyers for your wholesale deals. They will come out of the woodwork so-to-speak. Especially, if the deal is less than 70% ARV. But regardless of exit strategy be sure to do 4 to 5 deals before expanding to another exit strategy. That way you get more and more experience with each deal. Good luck as you start your REI journey.

    12Reply
  • Jorden P Dupont
    Real Estate Agent · Windsor Locks · Member since 2020 · 20 posts · 21 votes
    5y

    Hey Chase! I have not done my first deal yet but I'm am pursuing a house hacking deal, a live in flip, or possibly even a BRRRR. These types of strategies suit my current goals, lifestyle, and situation the best. House hacking at 25 with no kids is a lot easier to pull off than someone who is older, looking to settle down, and possibly has kids already.

    12Reply
  • Tapan Trivedi
    Real Estate Investor · Sacramento, CA · Member since 2014 · 78 posts · 41 votes
    5y

    I started doing flips but now I am mostly doing Multifamily. Its a lot closer to who I am as a person.

    Try to find who you are and what would work for you.

    HTH,

    Tapan

    6Reply
  • Kevin Zolea
    Rental Property Investor · Collingswood, NJ · Member since 2016 · 282 posts · 116 votes
    5y

    @Chase Yokoyama I just started house hacking. I think it's one of the best ways to get started if your considering to continue buying rental properties. There's so many benefits and it gives you first hand experience of being a landlord.

    9Reply
  • Chase Yokoyama
    OP
    New to Real Estate · Honolulu, HI · Member since 2019 · 42 posts · 16 votes
    5y

    @Joe Funari Thank you for your suggestion.  Initially, did you find end investors that you personally knew?  I would imagine that starting off with little to no creditability makes it hard for an unacquainted investor to trust me.  

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  • Joe FunariBusiness Member
    Real Estate Agent · Keller, TX · Member since 2017 · 850 posts · 825 votes
    5y

    @Chase Yokoyama No I didn't know a single one personally. Met them at local REI Club meetings and networking with other investors, Realtors, etc that gave me referrals. You will find the hard part is getting the wholesale deal under contract, not assigning it. Hope this helps.

    5Reply
  • Chase Yokoyama
    OP
    New to Real Estate · Honolulu, HI · Member since 2019 · 42 posts · 16 votes
    5y
    0Reply
  • Chase Yokoyama
    OP
    New to Real Estate · Honolulu, HI · Member since 2019 · 42 posts · 16 votes
    5y

    @tapan trivedi  Did you first flip houses out of your local market? Or did you stick to properties that you could drive to?

    0Reply
  • Chase Yokoyama
    OP
    New to Real Estate · Honolulu, HI · Member since 2019 · 42 posts · 16 votes
    5y

    @kevin Zolea Thank you! House hacking definitely seems to be a good suggestion for a first time investor.  

    2Reply
  • Chase Yokoyama
    OP
    New to Real Estate · Honolulu, HI · Member since 2019 · 42 posts · 16 votes
    5y

    @joe Funari Very helpful.  Thank you again for your advice.  

    1Reply
  • Daniel Machado
    Investor · Sacramento · Member since 2021 · 18 posts · 21 votes
    5y

    @Chase Yokoyama I’m just getting started and just closed on my first home purchase. I decided to go with buy and hold to minimize time and effort I’m putting in long term. If I was interested in real estate a few years ago, I would definitely have pursued house hacking. Best of luck!

    3Reply
  • Chase Yokoyama
    OP
    New to Real Estate · Honolulu, HI · Member since 2019 · 42 posts · 16 votes
    5y

    @Daniel Machado thank you for your input! Congratulations on your first home purchase! 

    0Reply
  • Brian G.
    Rental Property Investor · Los Angeles, CA · Member since 2013 · 1k+ posts · 1k+ votes
    5y

    @Chase Yokoyama I decided to start a Vacation Rental biz. It’s an active biz but it can be well worth your time if you have some time freedom to respond to the occasional issue and if you want to juice your returns. House hacking is a great strategy to begin with as well. If you go this route, buy the very nicest asset you can afford as desirable properties perform well and mitigate your risk. Good luck!

    4Reply
  • Chase Yokoyama
    OP
    New to Real Estate · Honolulu, HI · Member since 2019 · 42 posts · 16 votes
    5y

    @Brian G. Very nice point about the desirable properties part.  I appreciate your help.  Vacation rentals could be a thing in Hawaii but I believe there were some laws imposed recently that kind of "nerfed" the power of vacation rentals.  But still a viable option.

    0Reply
  • Aaron W.
    Rental Property Investor · Northern Virginia · Member since 2019 · 793 posts · 620 votes
    5y

    @Chase Yokoyama

    Went to BRRRRing small multifamily because we liked the scalability of having more units in one place.

    4Reply
  • Amanda JacobellisBusiness Member
    Real Estate Agent · Southern California · Member since 2020 · 95 posts · 43 votes
    5y

    @Chase Yokoyama what taught us the most was purchasing our first hone and renovating, then selling 7 years later for almost a million in profit. It wasn’t technically any of the above strategies but we learned about each aspect of flipping in a slower safer way. Then we started “uplifting” for people - which Is upstanding, renovating, staging in a minimal way to maximize sakes profits. I say play to your strengths. My strengths are in design, project management and budgeting. We now have Short term rentals and focus on Brrrr method. We do an occasional flip.

    [email protected]310-497-8385
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  • Jaquetta T Ragland
    Real Estate Agent · Winston Salem, NC · Member since 2014 · 486 posts · 303 votes
    5y

    @Chase Yokoyamai started with renting out the home that I used to live in. It wasn’t a good time to sell it so I was kind of forced.

    Also I’ll be visiting your area soon. Any recommendations on where to eat and what to do?

    4Reply
  • Ian WalshBusiness Member
    Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    5y

    Wholesaling

    1Reply
  • Cheng Saetern
    Sacramento, CA · Member since 2020 · 2 posts · 3 votes
    5y

    @Joe Funari

    Thank you for this post! I needed to read this - researching wholesaling & formulating my plan can be a little discouraging sometimes. This makes me feel better about the direction I’m headed!

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

    @Chase Yokoyama I jumped in on renting a SFR back in 2013 for my first deal, and the second one was a rental in the same area. The prices and times where different then in terms of market condition. If I was starting today it would be directed at a BRRRR or House Hack due to the numbers and ability of cashflow.

    The McKernan Group4.957 Reviews
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    1Reply
  • Brian G.
    Rental Property Investor · Los Angeles, CA · Member since 2013 · 1k+ posts · 1k+ votes
    5y

    @Chase Yokoyama Fyi, most ppl who are in the VR biz on BP self manage remotely, myself included from more than 2,000 miles away. ie, don’t limit yourself to your local market. There’s a ton of technology in the space to enable remote self management which can jack up your returns as the going rate for prop mgt is 20%+ of gross revenue. Learn how to self manage and you can make a really nice return in the right market/s. Good luck on your decision!

    3Reply
  • Martin NealPro Member
    Rental Property Investor · Chicago, IL · Member since 2017 · 293 posts · 383 votes
    5y

    @Chase Yokoyama started with BRRRR, it fit what I was trying to accomplish and team I was creating.

    3Reply
  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    5y

    Flipping little mobiles in parks by carrying the financing, building capital to purchase vanilla rental houses.

    Househacking and BRRR ing are under the LTR umbrella. STRs are as well, but more of a hospitality job that earns ordinary income vs passive.

    Wholesaling is the most comprehensive strategy of all listed.  I didn't wholesale until I had about 10 years experience. 

    The no-brainer starting point is to househack if you're younger without a family. I have been 'luxury' househacking for 14 years with a family.  Not all househacks are plexes.  

    5Reply
  • Emanuel Martinez
    Rental Property Investor · Cleburne, TX · Member since 2020 · 18 posts · 9 votes
    5y

    @Steve Vaughan can you define luxury house hack?

    3Reply
  • Jim K.
    Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
    5y

    @Chase Yokoyama

    Hi Chase.

    I started off doing lipstick flips (painting and minor repairs) on small condominium apartments in Greek apartment buildings. I did three of these and moved to America, Pittsburgh to be specific. My wife then got our first rental deal on a 100-year-old single-family house with tenants in place.

    We then started buying elderly SFR with well-built, good fundamentals that had been undermaintained by their former owners. There is a surprisingly large number of these properties in my area. It takes plenty of work to get them up and running, but once you whip them into shape they'll keep chugging on and making you money in a small, tight-knit portfolio for a surprisingly long time.

    Our current strategy is focused on buying elderly duplexes and small multifamily under similar conditions. The same sort of reno work can be much more profitable in duplexes and quadplexes in the right areas, to say nothing of small apartment buildings. I believe we only have a few more to go before we retire and I write a book on how this can make any able-bodied, reasonably-quick study with tools and heart some money to put aside for an early retirement.

    3Reply
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