Investors who started in late 30’s with multiple children
New to Real Estate · Frederick, MD · Member since 2021 · 39 posts · 36 votes
Hello All,
Josh and I are newbies to real estate. We are absorbing as much information as possible and setting goals. We are currently in our late 30’s and have 4 school age children. Over the past year we have been able to increase our savings and continue to work on our financial IQ. We have a general idea that we’d like to invest in North Carolina. Our issue is capital, we don’t have a lot of it.
Are there any investors that have a similar late start like we do, who’d be willing to share some tips or tricks?
Learning so much and so grateful for this community.
Thanks
The Masser’s
@Ciji Masser Welcome to the community and look forward to hearing about your successes.
It is never too late to start investing and you are in the right place to do it.
Before you get started, know why you want to get into real estate investing? Are you interested in cash flow or appreciation? Do you need immediate cash flow or can it wait? What is your appetite for rehab? This is going to be your guide throughout your roller coaster journey and will keep you looking forward through the good and bad days. After you know your why, work backwards to establish short-term and long-term goals to help you accomplish your why.
Understand what to you constitutes a great deal. This is typically a personal decision and can include specific returns you want to see from a deal. This will also help you stay focused and to not give in to a make a bad deal work.
One of the most important skills of an investor is deal analysis. You will want to practice analyzing deals everyday, even if you don't plan to buy yet. This skill is invaluable and a perishable skill.
Continue educating yourself everyday as there is too much information to learn in a short amount of time. Know that mistakes will be made, but the great thing about real estate is that over time and if purchased right, many mistakes can be mitigated or overcome. Don't be afraid to make the leap. Analysis paralysis can and does stop many from moving forward. Some of the best learning comes from jumping in and figuring it out.
Best of luck!
I didn't start investing until my late 30's with kids. Had to get creative. You can read all about how I did it in my book Crushing It in Apartments and Commercial Real Estate. You can do it, but it's hard work and requires sacrifice. There aren't any shortcuts. Wishing you all the best!
Hi @Ciji Masser,
My wife and I started in earnest in our late 30s with 4 kids. She was in grad school. I'm a teacher, so we didn't have lots of cash. One of the keys to our success, which I think others have mentioned, was partners. Our partners allowed us to leverage their skill and money to grow our portfolio to places where we never thought possible.
Best of luck on your journey!
AJ
@Ciji Masser
I’m in my early 40’s, 3 kids under 8, and just started last year. Acquired 2 small multi-family properties so far (One on market, one off market), and have had to get creative with financing as we aren’t going to house hack (nothing wrong with it, just not for us), and don’t qualify for any great gov programs. That means 25% down!
For most recent one, I took HELOC on primary residence and then used that for majority of down payment. So I basically financed almost 100% of that purchase. Of coarse you want to be very careful about assuming that amount of debt, but it can be a creative way to get around the lack of capital on hand for down payment if you really want to make an investment. Just be really careful that the numbers work with that full amount of debt.
Sounds like you’re not house hacking either since you’re not buying local. Thought this might be an idea for you. 
I bought a new minivan and while I enjoy it, I could have gotten a used one and been ahead several hundred each month. The money I could have saved could have bought several rentals over the life of a 6yr auto loan. Mind you these would probably be rentals in Indiana or something but it's just some perspective for you. Keep reading all the books. I've gotten through more books in less time by doing the audio versions, but I also get a physical copy so I can look at the tables etc. The Wealthy Gardener is another good one and like Rich Dad it also has a story. Look into webinars on long distance investing here on BP. Share your calculator analysis when you think you're ready and get feedback from BP people. That was useful for me. Good luck!
@Ciji Masser we are in the same boat.. Happy investing.
@Matthew Terry
Love your advice and insight. I want to copy paste your response and text it to my wife.
Good luck, I am 56, started in 2000 with three houses on one parcel. Immediately moved into the most ugly and kept the tenants in the other two. They cover the mortgage. I lived there for seven years and had two kids. My wife is a yoga teacher. So not a lot of income there. Together, we painted the interior and exterior of every unit, completely redid the landscaping, and slowly raised the rents.
Today, that initial investment has already produced enough rental income, gross, to pay the purchase price. I crossed that threshold sometime in 2019. We also picked up a small single family in 2013. It was so ugly no one else would buy it. The lady was a bus driver, and she would stop and pick up every stray cat in the neighborhood. Not only did I tear out the floor remove stinky dirt from under the house but I sucked out the insulation in the attic and found multiple mummified felines. It was a complete redo with all the parts from Craigslist and the Habitat for Humanity retail stores.
In 2015 I found a nice beat up house on a corner lot with a small caretakers cottage, that one took nine months of work to get fixed and rented but I’ve had tenants in the house and in the small caretakers cottage since!
2017 I paid full retail for a duplex in the best location in town. I bought it in April, in 2017. In October, we have gigantic wildfires, 5% of the housing in my county evaporated overnight. I knew I was stretching to buy that duplex, but I could never buy it again, demand is too high here now.
I’m not telling you how to do it I am saying it can be done.
Even recalling all the 10-year-old cars I drove (Drive), all the weekends where I showed up to the potluck on Saturday night with my hands covered in paint, all the plumbing leaks and repairs, septic failures......
It was worth it. That’s what I feel when I look back on 21 years of self managing.
If there’s any advice to be given, and remember I’m in California, I would say pay with the properties going to be worth next year to have it this year. Every time I waited for the best price, I lost the property.
Best Lawrence
@Ciji Masser I am early 30's, 2 young kiddos, building capital ant getting started too!
I dont think it's too late, although there are moments I feel like I am WAY late to the game as well!
We used to live in NC recently actually!
As useful as the wear shoes until they have holes in them and attempt to offer skills on fiverr.com or upwork.com
NO One mentioned P2P lending
There is a bigger pockets podcast about it
https://www.biggerpockets.com/...
I don't know the cost of housing in your market. You can move markets if those costs exceed the amount of money you can get access to. Although this high interest approach might not be for everyone if you can acquire the property you can always get a 2nd loan if needed to do all of the rehab work.
Once you do at least 1 deal things might become less scary and MAYBE, MAYBE the upside will cover the loan holding costs. Is this a high risk strategy, YES. It will allow you to start more quickly where you can start asking "where do you find quality contractors?".
This would be in the type of scenario where "partners" aren't available. *Dawn* the guest on the podcast is a member and at least at one time she was active and I did talk to her once or twice.
@Ciji Masser
I am 32, hubby is 39. We have a newborn and a toddler.
Is your current home rent-a-able? We got into REI by buying a new home with 3.5% down and renting our starter home (which we had just refinanced to 3% x15year).
100% agree with everyone here regarding savings. We are where we are due to frugalness, tons of hand me downs, cheap car and no CC debt! We live below our means and we “pay ourselves first” as Dave Ramsey would say. I am a more conservative investor so we will be saving up a lot more capital before going for house 4..... Did I mention we needed a 9k chimney repair in our own house in the midst of buying the fix and rent that we purchased when I was 9 months pregnant!?? In my opinion, reserves are key!
@Ciji Masser What REI Meeting are you going to? I am in the same boat, Mid 30's 5 kids looking to start investing, and same area.
@Ciji Masser
This is a great sharing thread. Everyone has so much advice and you really start to see a pattern others are following.
So my wife and I sold our starter home in 2020, in which we lived for 12 years. Stayed longer than anticipated. Small house that we quickly outgrew with our young family. Took the $45k and bought a nice house in June 2020 for the family but it wasn’t wise for our (unforeseen) future of real estate. Oh well, we enjoy the area and the house.
Last year, we had quite a bit of pointless debt. I cashed in about $55K from my IRA in October and paid off most of the pointless debt. We still have a student loan and 2 car payments and saved the rest of the IRA cash for a property. Continued to save more and in March we closed on our first rental!
I’m 36 and my wife is 33. We also have a 4 yr and 2yr old with another due in August!
The rental is a small 925sq ft 3bd 1ba we got for $118K but will rent for $1550 when rehabbed and will cash flow about $350 after all expenses. That’s on a 15 year note too! None of this may actually help you but I always like to hear the numbers of other peoples deal just to see what exactly they’re looking at.
The main thing I did was action. You can read and analyze all day but at some point you just need to take action. Take that leap, it’s really not as scary as it seems. I needed to learn how to analyze deals so I read about it, then got to a point where I just needed to run numbers. So I did about 3/day for a week then moved onto the next nugget I need to educate myself with. Find out where you’re at and what you need to know next! Write it down! Maybe it looks like this;
Lending- what options do I have?
-conventional, FHA, VA, seller finance
- who do I call?
- what other options do they offer?
Etc, etc. it’s crazy what doors a simple email opens or phone call opens up and it only takes minutes!
Good luck, you can do it!
@Ciji Masser
Never too late to start.
The big advantage you have is both of you are on board so you can accelerate your speed of learning and investing.
There's nonedhxstuon like trial and error. Don't wait to long, jump in and get your feet wet.
Your first deal definitely won’t go perfectly but it makes all of your remaining deals go much smoother.
Most people won't ever actually make their first investment deal, which is what separates top from the bottom when it comes to real estate.
Making a decision to get started is much more important than making a perfect decision.
Congrats!
@Ciji Masser this is a great place to be if you want to be in rei! I can so relate and understand where you are coming from about your family size. My wife and I currently have 6 children at home and 9 all together. Over the last 6 years we have done several deals. So don’t think it is not possible to do with kids. You can do anything you just have to find the way. We have rentals and bought and sold 2 personal properties. Currently we are working on a 2800 sq/ft flip. If anyone tells you it is easy it’s not and it doesn’t happen over night. The rei game is a marathon not a sprint! The biggest amount of advice I could give is always keep going even when you think you are going no where you will make it. Celebrate your success and learn from your mistakes. Surround yourself around someone that is just a little bit ahead of you. Also, another great book to read is The Richest Man in Babylon. This is just my humble opinion for I am not a millionaire but am working every day to get there!
@Ciji Masser I’m not a truck guy, but I’m super curious how you move 6 people in either of your trucks.
That aside, I’ll add to a good sharing thread:
1) get as much, if not all, of the existing debt on one spouse. A mortgage would be hard to move, but a car loan - especially on something only 45 days old - should not be hard to refinance.
2) you need capital, but you also need DTI room for cheap conventional financing. If your DTI is already 30% and lenders might take you to 45% or so, you don't have much DTI left. You can only take on a debt payment that is 50% of the sum of your current debt payments.
3) when analyzing properties, consider the metric that 75% of your rent should cover PITI and HOA. You'll get to a point where lenders will be able to effectively zero out your investment mortgages by applying discounted rent against your PITIA. This is a great situation and means that you are now financially limited only by the capital you have to put 20% or more down on the next deal. When you are working with a lender on your first purchase, talk about this with him or her so that you understand exactly how they will handle this (there are or were rules for new landlords that I don't remember clearly)
4) unless you are diving into this full time, taking down a deal or more per month (or at least a number of deals per year), be patient. Save your cash flow for an emergency repair. Raise rents when you are able to. Let appreciation do its work. I’m glad that there have been shares on this thread from people who have done it slowly, as the more-typical sharing is just how fast one got so big. If that’s your goal, great, but understand that’s an entirely different commitment then building a small-but-growing portfolio over time.
Good luck!
@Brian Murray hard work and dedication those are the things we are made. Nothing has ever been easy, but all our growth has always opened up at the exact right moment in time. We’ll check out you book as well.
@AJ Leman partners, hard work and dedication. That’s what I’m picking up. We will be at a local meetup next week. Elevating our network!
@Ben DeBruin it's a great idea and one we have tossed around. We aren't settled on it but know we can use it as an option. I like the idea of a house hack, but we are in our second family home. Kids are settled in a good school district. Josh has an essential job that he can't do from home and I have one I do from home. Not saying we couldn't house hack, if we found the right deal we'd strongly consider it. Thanks for letting us know that the HELOC worked for you.
@Noah P Bonds Pro tip noted.. Never crossed my mind to share and analysis on here to get double checked. I love it. Thank you. The book list keeps growing. I don’t commute to work so reading a physical book takes me the same amount of time as Josh on audio. He drives to work. Right now we are about a week to a week and half, but with 4 youngsters we don’t read on the weekends. Grocery trips consist of BP Podcast and we have done 3 webinars. We love love love this Pro Membership!
@Pradeep Ka you too. Feel free to reach out any time.
@Matthew Terry we are buckling down hard on all of those things. This is a great post! Thank you for sharing this with us!
@Jonathan Stone it is a great one, isn’t it? Good luck in your adventure.
@Ciji Masser yesterday was the best day to start..today is the next best day! Go for it!
@Ciji Masser Welcome to the community and look forward to hearing about your successes.
It is never too late to start investing and you are in the right place to do it.
Before you get started, know why you want to get into real estate investing? Are you interested in cash flow or appreciation? Do you need immediate cash flow or can it wait? What is your appetite for rehab? This is going to be your guide throughout your roller coaster journey and will keep you looking forward through the good and bad days. After you know your why, work backwards to establish short-term and long-term goals to help you accomplish your why.
Understand what to you constitutes a great deal. This is typically a personal decision and can include specific returns you want to see from a deal. This will also help you stay focused and to not give in to a make a bad deal work.
One of the most important skills of an investor is deal analysis. You will want to practice analyzing deals everyday, even if you don't plan to buy yet. This skill is invaluable and a perishable skill.
Continue educating yourself everyday as there is too much information to learn in a short amount of time. Know that mistakes will be made, but the great thing about real estate is that over time and if purchased right, many mistakes can be mitigated or overcome. Don't be afraid to make the leap. Analysis paralysis can and does stop many from moving forward. Some of the best learning comes from jumping in and figuring it out.
Best of luck!
I agree with everything you said,...except the last line. Although there are many that will learn from making their own mistakes, it's a lot like jumping in a pool without knowing how to swim,...and thinking "I'll figure it out when I'm in the water". Those that figure it out, are the only ones that say it's a good idea. Those that don't, well, ask one of those squirrels that run across your path as you're driving down the road, how many times they can misjudge the cars approaching. The ones that made it, tell the others it's OK...RUNNN!!!,...then, Oh $h177.
Hi Joe! I completely agree with what you said about jumping in. I should clarify that statement that the jumping in comes after education. You need to have a foundational knowledge of what you are doing. Oftentimes, I see people who learn and learn and learn, but never take the next step of action because they are too afraid to make a mistake, so they continue to learn and learn. At some point if you want to do this, action has to happen. Learning is a lifelong process and when you feel like you have learned everything there is to know, then you are at risk of making mistakes.
Taking the dive is scary but it has to happen sometime. You'll learn from those experiences. Mistakes will always be made. It is the constant learning and foundational education prior to jumping in that may help you avoid the major mistakes.
@L Louis A. Thanks for the great information. That’s a powerful and insightful story. We are focused on mastering one area and then growing from there. It sounds like that exactly what you did. Josh and I love helping people. So this should be a great endeavor for us!