Hi BP community!
I'm planning and scheming to buy my first designated rental property. I already live in a home with a detached mother-in-law that pays a good chunk of the mortgage. So I have a small taste of cash flow and a few years of light land-lording. I was tempted to post here asking simply for direct advice on my situation. Instead, I thought it would be more fun to ask about YOUR first deals or first properties. How did you get started? Would love to hear about them and hopefully learn something. Could also say what you would've done differently.
If you'd like to share any direct advice for me this is my basic situation:
-I'm a 30 hour a week RN
-Have about 25K cash available now
-Substantial home equity available
-No debt outside of our mortgage
-My wife and I are willing to do another owner occupied/house hack to get a MFH if advantageous
-We live north of Seattle in a hot market. Prices are high and there is substantial competition. There are other more affordable areas within a couple hours more or less, but would need to manage from afar.
It would not be difficult to obtain a property with my financial situation. I am more concerned with putting myself in a position to continue to expand my portfolio. I don't want to spend all my capital then be stuck. I am interested in buy and hold, BRRR, and maaaaaybe a flip if necessary.
Thanks in advance! You guys rock!
@Jason Reinen I read Ken McElroy’s book The ABCs of Real Estate Investing when I had probably 5-6 buildings (around 20 units). At that point in my career there was nothing revolutionary in the book but there were a lot of great tidbits. The one that jumped out the most said something to the effect of “the problem with real estate investing is that you save and save and save for a property. But once you buy it you are totally broke.” That was completely true in my situation. My wife and I killed ourselves saving up $80k for our first Properties (side by side duplexes) and once we bought them we were broke!!!! Unbeknownst to me, I followed Ken’s advice on how to overcome this problem: leveraging your skills with OPM.
Here is a brief summary of how I went from living in an 600 sq ft apartment in 2012 to owning a house in Seattle and 35 rental units across nine buildings in Everett.
- Bought primary residence in Seattle 2012 with 10% down. Kept the mortgage very reasonable.
- Saved, saved and saved. Bought side by side duplexes in Everett in late 2013.
- Saved just a little more with the addition of the duplexes cashflow and having a freshly proven model and sharp looking BP analysis tools, pitched and bought a fourplex with a partner in early 2014 (25% down and Have since bought the partner out).
- With 8 units, cashflow Snowball began to grow and saved, saved and saved. Found an owner financed fourplex in late 2014. 15% down.
- Being totally broke and wanted to continue to leverage my skills so I obtained real estate license and began using my knowledge to help other investors find and close deals. At this point I had rental income, W2 income and broker income. Here things got nuts and I didn't have a day off for along time!
- Bought another fourplex late 2014 with partner who funded the deal and we manage the propety and are paying back 50% of down payment on 5 year note at a competitive interest rate.
- Pulled out a HELOC on primary to help fund future deals.
- Purchased two more fourplexes in 2015 while working full time W2, managing my propertiers, real estate brokering and property managing for other investors.
- Jan 2016, quit my W2 and dove into real estate full time and have since purchased a Fourplex and small seven-unit apartment building with a partner and concentrated on paying down our HELOC.
- Now with HELOC paid off, we are looking to pool our equity in exisiting properties with a portfolio lender to purchase larger 8-20 unit building.
@Jason Reinen I bought an a class rental in northgate and then a class a- in delridge.
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
Join the Largest Real Estate Investing Community
Basic membership is free, forever.