I have been a BP follower and pro member for years. I feel I should share my story as it may help people who are stuck like I was.
Since 2016, I was into buying real estate for investment purposes. I was seduced by the cashflow apartments multifamily thingy that I learnt from good old Grant Cardone (my views on him has changed since, but I appreciate that he opened my mind at the beginning). But until April 2019, I had done NO move because no deal made sense. I was also stuck in the analysis paralysis.
And then, come march 2019, I just said "F*ck it" and I looked at a very good area of Jacksonville FL (I wanted to buy in Jacksonville for its growth etc) and I found a decent townhouse for 179000. For many years, I had built a decent amount of cash on my savings so I bought it cash. Got it. Rented it for $1400 within a week. HOA was $180 covering roof etc. Property management was 10%. Then I decided I should cashout refinance it a few months after.
The experience of being an actual owner/landlord changed everything (even though i had experience in rental property since 2003 via my parents). I do the loan, and at the same time, I see a 1500 sqft house close to my job in GA, in a great area. It looked unappealing (old carpet, old paint etc). I made an offer and got it! I was literally doing 2 loans within the same month and the credit score saw only one. I ended up doing all the floors myself, and handled the project by hiring contractors for tiles and paint. Lots of sweat equity on this one. Purchase price was 173000 (with a new AC at closing for free). Comparable next to the house: 200k! Rented within a month for 1500$. Cashflowing 350$ after all expenses.
And again last month. Same street, same house (even a shy bigger, 100 sqft more) but got it cheaper for 167000! Appraised at 195000 before renovation. Currently doing the reno but this time, I hired people to do all the floors. It will rent also for 1500. Same cashflow, $350.
What I wanted to share is that the first step was crucial. It wasn't a great deal, it was pretty on par with market. But somehow, it just started everything. All the money making happens after the first step.
So ultimately, don't be afraid of making a "eh" deal. Don't buy something stupid too. I had made calculation on the townhome. But if you are looking to enter in the RE investing, a townhome is great as the HOA covers a lot of repair and it's fairly turnkey.
Wishing you best.
PS: Tips on the first purchase if it's not a perfect deal:
- Buy in an area that is growing
- Buy close to shops/restaurants
- Buy where the population grows
- Buy something not too old, like 2000+
This will avoid to own a property that could potentially go bad. With these criteria, that you can find on "bestplaces.net", it should always keep or grow in value.
@Charles H. Congrats on your success! Continue doing a great job.
@Charles H. How about giving us the story on why an Airplane Structure Test Engineer moves into rental property investing?
@Terrell Garren great question. The job is fun if I were to describe it but it’s extremely repetitive (like a lot of things but here you can’t really reinvent the wheel in this job), and of course, I am paid by the hour and my salary is capped by the years in the business.
I see real estate investing as a business with no limit but the sky with the opportunity to have monthly cash-flow after a while. There are so many creative things that can be done to either increase the portfolio etc.
Now I’d love to still be working for the company I am at if I am able to move into a leadership position, possibly in innovation, but I have to move mountains for that (which I am working on but very tricky).
That’s how it was for me, too. The first one was our own place that we did the renovation on, and made a chunk of money. Then we bought our “prideful” we-have-arrived-house in our 20s...then read Rich Dad, and realized we could have purchased 5 little houses with the same money.
David Green said in a recent podcast, and I find it to be true for the houses I choose, you build equity in the little houses. That’s their purpose. Tenants pay down the debt, inflation reduces the debt, taxes give benefits...good stuff happens on the journey. One expensive repair can set you back a year of cash flow. Hold on.
And then you trade that equity for cash flow, in multi-family. Or tenants pay off the houses for cash flow.
Adding value with sweat equity speeds it up. Great job! Keep going.
I do think there is something to be said for working with a provider that's done many many deals. So, your first deal with them is their 200th deal. They've already worked out the kinks so that you don't have to experience them yourself.
That said, it is totally about taking the leap. I love the message!
@Charles H. Congratulations and thanks for your post. I too have been on here for awhile and finally made a decision to just do it. I also purchased a condo in Jacksonville, FL and while I don't make much cashflow, being able to say I've done my first and the confidence it has given me to work towards the next one is priceless. Love your photos by the way, and how you are in each! Great idea
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you