Momentum in New Mexico

24 Replies

I just wanted to give a huge thank you to all of the BP contributors for their help in my success. I am lurker that does not post very much. I wanted to share how BP has contributed to my success.

My story begins in 2007, when we bought our first home in Lubbock, TX. The previous tenants were a couple of college guys that trashed the interior. We purchased the home for about $90k, bought $8k in materials (and a lot more sweat equity in to it), and sold it for $113K. During this time, I was working full time, and my wife was attending law school full time. It was hectic, but I learned a tremendous amount about what goes in to rehabbing a home.

Fast forward 6 years, we moved to Rio Rancho, NM (near Albuquerque), my wife and I were both employed in great W2 jobs and we had saved up some extra money. I have always been interested in real estate, and I have an Uncle that owns about 15 SFRs. I contacted him and asked if he would be willing to talk to me about his business. He was more than happy to share his experience. I flew up to Utah to specifically talk about real estate with him. He shared a ton of wisdom with me and has become a mentor that I rely on. I came home and I started looking for homes on the MLS, but was still having trouble finding anything.

What happened next changed my life. I was lurking on BP and noticed some one had referred a Realtor from my area in a thread. The Realtor was also an investor, so he understood what a good deal looks like. He has been extremely patient and helpful. Since our initial meeting 10 months ago, I have closed 4 houses with him.

Two are rentals, both are cash flowing about $200 per month with stable tenants.

Two are flips. I have finished one and sold it (with a nice profit). The other is undergoing rehab currently and should be done within the next 2 weeks.

Thanks again to the BP community, I can say that I could have done it with out all of your help, but it would have been substantially more painful and expensive. Please keep posting your experiences, you just never know whose life you might change for the better!

I wanted to post a few pictures, because everybody loves pictures!

Here is my first rental

  • Purchase price $85K
  • Repairs $4K
  • Current Rent $1035 per month.

The second home we bought was Another Rental

  • Purchase Price $98K
  • Repairs were $3K
  • Current Rent is $975 per month.

David,
Any chance I might be able to get a name?! I too live here in Rio and am looking to spread my wings! Any info would be great!

Then we ran in to a cash problem. We wanted to keep buying properties, but had gone through most of our reserves. So we decided to start flipping to build up some additional cash reserves.

First Rehab home

  • Purchase Price $71K
  • Rehab costs $28K
  • Fixed Costs $14.6K
  • Sales Price $128K
  • Profit $14K

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That is really exciting, David. Do you do your flips in Rio Rancho? We were looking at a deal there, but I haven't done my homework on that area yet.

Originally posted by @Ted Wilcox :
That is really exciting, David. Do you do your flips in Rio Rancho? We were looking at a deal there, but I haven't done my homework on that area yet.

@Ted Wilcox I invest exclusively in Rio Rancho for now. If you come across any deals that won't work for you in rr or on the west side, send them my way! I also would not mind partnering on deals.

Originally posted by @Sean Kehoe :
David, Any chance I might be able to get a name?! I too live here in Rio and am looking to spread my wings! Any info would be great!

@Sean Kehoe I sent you a pm with his contact info. Good luck.

More success in New Mexico!  This one was a tough one.  The previous owner painted all of the tile floors black and the kitchen had a non function layout.  Whoever put the tile down did a GREAT job (not a good thing for us). We ended up having to grind down all of the old thinset, which added about 1 week to the job.  We opened the kitchen by taking down some walls and redid the layout.  Turned out great.

Can you guys give me some input on my finish out level (too high, too low, too much laminate, etc)?

  • Purchase Price $95K
  • Rehab costs $29K
  • Fixed Costs $19K
  • Sales Price $160K
  • Profit $16K
  • Key to Key 78 Days

On to the pictures...

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Master Bath Before

great job! You should be proud!  I am in Texas but might be moving to NM in 1-2 years.  I was going to start with buy and holds but am considering flipping.  how do you find the deals and how do you find contractors? Do the contractors provide the new cabinets or do you have to buy them and from where do they come?  

Beautiful family!  God bless,

Daniella Ortiz

I find deals mainly through my Realtor, however I have my first deal from a wholesaler under contract.

I found my contractor through a referall and he provides the cabinets. I don't recall the brand, but they were a ready to assemble (RTA) model   They are fantastic quality (3/4" plywood boxes, semi custom) and reasonably priced.

If you make it up my way, make sure to drop in.

Hey @David Torres  

Great post and pleasure to meet someone who also owns in the Albuquerque market. :) I'll PM you. Thx.

Lorraine

do any of you know a good realtor on west side or rio rancho??? 

@David Torres  Thanks for sharing all the details. I learn so much from other investors that I can't begin to measure how helpful that help has been. Thanks!!

Nice work! Those margins are thinner then most people want to work with, so I am guessing deal flow is easier as a result. Are these all MLS purchases and sales? Also ahve you thought about some 'we buy houses' signs on the lawn while the places are under contract or construction?

@john 

@John D.  undefined I will say the margins on these are a little thinner than I would like, but we also sold  them with very few DOM.  Deal flow seems to be faiirlygood in these parts and the margins on my next two flips are projected to be better.  These are all mls purchases.   I went to UNR and have family in Reno, and I can tell you the market is very different in NM.

I havent done any other marketing, but the we buy houses sign is a great idea.

@David Torres  I'm curious as to your experience in Reno.  I've steered clear, there seem to be lots of investors chasing mediocre rental returns.

I invest in more rural areas west of Truckee where there are few serious investors that really look at and make an offer on everything that matches their criteria.

Its the end of the year and we were able to wrap up 2 projects for a total of 4 flips for the year!  Lots of lessons learned in these past projects, and still looking for the right contractor, but it feels great to finish the year strong. 

Lessons Learned:

  • Don't buy the unicorn on the street and be careful when moving in to a new area.  In the past, I focused on one zip code.  I branched out to a different area and thought I had a home run.  I had a difficult time finding good comparables, and this house was about 600 SF bigger than everything else in the area.  We ended up still making a profit, but not nearly what we thought we would
  • Hold back the final payment to your contractor until after you have an inspection completed.  This ended up costing me an additional $750 because the contractor I was using became very scarce after he received his final payment and I was in a time crunch to get everything wrapped before we closed.
  • Start out with a good accounting system in place.  I have spent thousands of dollars trying to get my books up to date.  It is a lot easier to start out on the right foot.

Flip 3

Another house with a weird layout.  Also, the owner left 4 cats for us (yay?).  Tried some new finishes and put laminate in the kitchen.  Was received well.  We sold this one contingent to the buyers home in CA, so the key to key days are quite a bit longer.

  • Purchase Price $95K
  • Rehab costs $37K
  • Fixed Costs $22K
  • Sales Price $189K
  • Profit $23K
  • Key to Key 130 Days

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Kitchen Before

Kitchen After

Flip 4 (AKA the unicorn)

See info about this in the above post.  Great house from a great builder, in an ok neighborhood.

  • Purchase Price $135K
  • Rehab costs $42K
  • Fixed Costs $26K
  • Sales Price $217K
  • Profit $17K
  • Key to Key 78 Days

Front Before

Front after

Kitchen Before

Kitchen after

Love what you did with the kitchen on that last one!

Great write up.  Its awesome to see people getting it done in their own towns.  Those ranches shine when you are done!  Your improving your town one house at a time.  Nice work!

Originally posted by @David Torres:

I wanted to post a few pictures, because everybody loves pictures!

Here is my first rental

  • Purchase price $85K
  • Repairs $4K
  • Current Rent $1035 per month.

The second home we bought was Another Rental

  • Purchase Price $98K
  • Repairs were $3K
  • Current Rent is $975 per month.

 I have been meaning to update this thread for a while.  These units turned over, we have new tenants in place.  We were able to turn the units with no vacancies (I.E. Someone moved out on the 31st and the new tenant moved in on the 1st)  Rental 1 has rents of $1100 (up from $1035) rental 2 has rents of $1100 (up from $975).  

We have picked up an additional 6 units since we bought these, most have similar numbers.  We have also flipped and wholesaled more than 20 deals since I last updated this thread.  We love Albuquerque and Rio Rancho NM for rentals and flips!

I love this community and attribute a lot of my success to this platform.  If I can serve or help anyone, please don't hesitate to reach out.

On another note, the realtor/mentor/friend that helped me start the journey is still by my side today.  He has helped me learn and grow in so many ways.  He helped me grow my real estate business sustainably so I could leave my 9-5 job.  He even helped my wife land a large client so she could leave her job and start her own law practice.  He has been one of the greatest blessings in my life.

The point is, you never know when you are going to meet the person that will change the course of your life.  Get out there and network every day and with every person you can.

@David Torres

Thank you for updating this thread as I would not have seen it otherwise, and it's great to see some of the path you've walked to get where you are today.

Continued success to you and your wife, and Albuquerue is lucky to have you here!

Hi David,  Thanks for sharing your experience.  I'm just trying to get started in real estate investing and I'm also in the Albuquerque area.  I've decided that my long term strategy is going to be buy and hold properties and I've been thinking I would start trying to wholesale to generate capital for the purchase of hopefully inexpensive/high equity rental properties.  My overall goal is to get enough passive cash flow coming in that I can be financially independent and get out of the rat race.

How have you found wholesaling in Albuquerque? I currently have one property, my old home, that I rent out. It cash flows about $200/mo. I bought it off the MLS for what I thought was a deal at the time. $87,000 across the street from the zoo. I put $25,000 into it and did all the work myself. I didn't do much reading about REI before I bought that house though, it was just going to be my house. I have since learned that I overpaid for that house because even though it cash flows now, if I refi to get some capital out of it, it'll stop and become a liability.

I just have a few questions for you about my strategy.  I've heard wholesaling is not something the inexperienced should do because it's difficult to spot the good deals from the bad.  What are the rules you have set in place to make sure that you don't overpay for a property?  What kind of marketing do you use to get your results? What software do you use to do you books and how would you recommend setting it up?  What resources do you use to comp properties to decide if you should buy or not?   How much do you typically make on a wholesale deal?  It looks like your typical profit from a fix and flip is about 15k, do you think it's worth it or is it easier to just wholesale? 

Finally do you have any other advice that may help me succeed? 

Wow that's a long list of questions, I'll feel very fortunate if you answer just a few of them.  Thank you for posting and best of luck with your future real estate deals.

Very good questions. Anxiously waiting for the answers. This market is very different from the market in STL. Im currently pending on a SFR that I probably overpayed, but need a place to live :/. Looking forward to this new market!

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