Hello.

6 Replies

My name is Paul. I just wanted to introduce myself and pick some brains here as I make my foray into real estate investment. 

Last year was the best and worst year of my life. I had received the great news around late spring that I had been accepted into a nursing program for fall (September 2014.) My wife and I were elated because we were expecting our first child. On June 18th my beautiful, healthy, vibrant daughter was born. Watching my wife lovingly interact with her was the most amazing thing I will ever experience in my lifetime. I will never forget it. A week and a half later my wife had an eclamptic seizure and she stroked. Eleven days after that she would pass away in the ICU. Words cant describe how profound the loss was for me then and now. As much as I wanted to find a way to quietly evaporate into thin air, I knew I had to get my head straight for my daughter. That meant amongst other things rearranging my house of finances as well as starting the nursing program as I had intended. Its what my wife would have wanted and expected of me after all. Today, I'm a month away from having completed my first year of nursing clinicals. Its a two year program so I'm halfway there. I'd be lying if I said its been easy or that I haven't been in some dark places the past 9 months. I know however that every time I see my daughter's face, its worth it. 

My wife was a very responsible and prudent woman. As such, she had a life insurance policy. It wasn't worth a billion dollars but it was/is enough so that I haven't had to return to work as a nurses aide and I'm able to focus on school and raising my daughter. Even with help from family and babysitting, both are so demanding I dont see how I would be surviving without the policy at this point. That being said its burning. Of course, I'm trying to make it as 'slow' a burn as possible, but with bills and such, I realize I need to make an investment quick.

I've wanted to try to get into real estate rental properties for a while, I've just never had the resources or time. I do now with my summer off and with cash on hand, but I'm about as green as you can imagine. I need some input. I want to purchase some multifamily properties in my area and I have some questions about the manner in which I should proceed. I'm looking at spending 30-50k. Theres a about 10-15 that I'd consider in the 15k-70k asking price range. I have a ton of questions but the first one is this:

Being new at this, would it be smarter having the resources, to make a cash offer on one of these properties? My thinking is that with cash and not having to finance, I'd have some bargaining leverage to get a very good deal. Initially I think this is a good idea with getting 'my feet wet' and maybe as a learning experience. 

Then again while I'm very inexperienced at this point, the plan isn't to just buy one. Ultimately, I want to buy more (and more.) With that being the case, should I be looking at taking out mortgages to buy multiple multi-family properties? 

Which route would you guys recommend?

I should also add at this point, this would be a joint venture between my brother and myself. While I plan on being very hands on and involved with these new potential property/properties this summer, when next fall comes around and I start nursing clinicals again, management will fall squarely on his shoulders. Hes not putting any capital up front but with the business but he will be dealing with tenants and repairs/expenses. 

Oh another thing... My parents also just received about 150 k from farm land my family sold. We've talked to them about eventually investing in these properties but right now they aren't interested. I am mentioning this is because if I ever needed some help from them financially in terms of repairs or emergencies, I would have the benefit of access to money without having to take out loans.

Any advice or input would be great, thanks. 

Paul

First and foremost, be careful when working with family. Responsibilities need to be laid out in print and be very clear. When you jump into any business venture with a family member you have to realize and respect that you now have two relationships with this person(s): one as a family member you'd probably do anything for and another as a business partner acting in the best interest of the business. Just be careful or just don't do it to eliminate this risk.

As for the money with your parents, if they haven't said "yes you can borrow that when you need to replace the plumbing in two of your units", then I wouldn't count on it. It isn't guaranteed. Then again, I don't know them, only you do. 

With regards to your overall strategy, I suggest you study up and leverage your money (get loans). Going through nursing school you should be able to research and learn quickly so get after it. Study for a short, predefined period of time then just get out there and take action. Meet with some local investors, attend your local REIA, talk with some agents about the best areas. Being able to leverage your money is one of the benefits of investing in real estate. $100,000 can buy you $100,000 in RE or it can get you more if you leverage it.

Medium picTyler Weinrich, W Properties | [email protected] | 4056734901 | http://www.wpropertiesok.com | OK Agent # 170512

Paul, my condolences for the loss of your wife and the immense sadness at losing your daughter's mom.   

I strongly recommend you take your time to learn and to find what interests you before making any major decisions.   I agree with Tyler about being very clear with family when you engage in any business venture together.

You will find a wealth of information at this website.   Take your time.  Welcome.

Thanks Kate and Tyler. 

Yeah. Valid points about involving family in business. The property my family just sold marks the conclusion of a decades long feud regarding how assets would be divided and it got nasty at times. My dad and his siblings all have horrible relationships as a result. I definitely hear you. I know there's a lot to learn, unfortunately its going to have to be on an 'as I go basis' as I'm short on time. I start my peds rotation tomorrow which ends on May 1st. I wont be able to research as much as I'd like. My brother is very resourceful and hes a great people person but I'm more the research guy, although I suppose I can relay the info about the REIA. Some of his friends are very successful in 'flipping' properties and investing in rental properties. I'm sure hes going to utilize them soon.

So then being that I ultimately want to buy many properties, its probably wise to take out mortgages on multiple units all at once as opposed to just buying one unit in cash and waiting to make the money back to purchase more down the line?

Could I post some of the properties from realtor.com and get opinions from forum members or is that against the rules?

@Paul M.

 You can post the potential deals up in the correct forum category. If you want good advice on those deals you better have done some vetting on them up front and provide your analysis in the post. Some people, not saying this is you, just post minimal information without having done their own research on a deal and expect others to spend their time running the numbers. 

That is another reason I suggested taking out loans is that you don't blow all your money at once. This is good because you still have an emergency fund if something goes wrong and you can accumulate more properties faster. 

Nothing wrong with learning as you go. I think everyone on here will tell you that is how it works. some of the most experienced people on here are still learning. You do need to understand some fundamentals first though: where you want to buy, why there, how to analyze a deal, what is a good/bad deal, etc. You can't study forever but a two-week binge using up every minute of your free time will probably help. 

Medium picTyler Weinrich, W Properties | [email protected] | 4056734901 | http://www.wpropertiesok.com | OK Agent # 170512

@Paul M.

I am very sorry for your loss. I can't even imagine what you are going through. Your daughter is beautiful! 

Unfortunately, without a job you probably wouldn't be able to qualify for a mortgage. If you purchase with cash..... On e you start working you could do a cash out refinance and then pull out money to purchase more. 

Medium prime lendingJerry Padilla, Prime Lending | [email protected] | 585‑204‑6923 | https://lo.primelending.com/jerry.padilla | NY Lender # NMLS #1084877

Originally posted by @Jerry Padilla :

@Paul Mannion

I am very sorry for your loss. I can't even imagine what you are going through. Your daughter is beautiful! 

Unfortunately, without a job you probably wouldn't be able to qualify for a mortgage. If you purchase with cash..... On e you start working you could do a cash out refinance and then pull out money to purchase more. 

 Thank you Jerry. Yeah I have a way around that. I'm pretty sure its legal but I might have to check, basically I was going to give my parents the money and have the investments be in their name for the time being. If that doesn't work for whatever reason, I'm going just have to start out slower using cash to secure 1 property and work from there I suppose. Not as fast as I would have liked to get this going but it'll have to work for now. 

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