Tips on how to make it

14 Replies

Hello everyone, I should be finally getting over these nervous jitters and buy my first investment property. I'm not trying to get rich quick or anything. I'm not too focused on fix and flips, but im very interested in buy and holds. 

The MAIN goal is to make at least 100k a year. Is that doable? Any tips or suggestions you guys might have for me?

I live in the Austin, Texas area, been trying to do as much research as possible about the market here. I have about 45k in the bank at the moment, but should have at least 120k saved by January. Do you guys prefer me wait till January or just dive in with the 45k now? 

Your replies will be MUCH appreciated. THANKS! 

@Michael Cavitolo AWESOME saving skills. That's killer at 120k by Jan.

When do you want to make 100k/year by? It's definitely possible, but as you mentioned, slow and steady wins the race. 

My wife and I are similar that we are trying to get to that point with by and holds as well. Our strategy is to either get killer Cash Flow properties in Decent areas, typically multifamilies (we're not talking about the 50k properties), usually just working class. Or our favorite, as people have probably seen me post before about, is STR (Short Term Rentals). VRBO, Airbnb, etc. They take more work, but the cash flow can be killer. If you are interested in the STR, feel free to pick my brain! By far what I invest a majority of my time into.

@Travis Rasmussen Thanks Travis! Yeah man I've always wanted to invest in real estate, and its been a dream of mine for quite some time now. I've been trying to save every dollar. I don't wanna go into the single family homes. Im more attracted to the Multi families. I'm not quite sure if I should deal with hard money lenders or not.. Maybe that's the better route to take? Just not sure. 

I'll be 23 by January. The goal is to make at least a 100k by 28-30. I'm just not sure if its doable or not. But that's the dream. If I could find a mentor and teach me things and show me the ropes on how to be successful in this business and help me make a 100k a year, that'd be great. 

I'm definitely not the expert when it comes to multifamily, I only have one so far and that's because I'm on the MLS everyday looking for deals, and that one I swooped up.

If you want to learn more about STR though, send me a DM.

Nothing wrong with having ambitious goals.  A few suggestions to early investors: identify your weakness and learn.

If you do not understand the finances and how everything interacts with one another, learn it.  In my opinion, the best way to learn how it all ties together is to create your own pro-forma's instead of using somebody elses.  Once you've created it then practice analyzing deals.  I used to do about 5-10 per day during the week just to get the hang of it.

If you do not understand construction and afraid you'll be taken advantage of, go learn at Habitat For Humanity.

Looking for deals can be tough these days, especially in Austin.  But talk to people who are investors or realtors as they might know of an opportunity.  I would start looking today, deals don't often pop up for your first time so if you think you'll be ready in Jan then chances are it'll take a few months after to actually get a deal.

And finally something I did a little but not too excessively: reverse engineer.  You know your goal of $100k, but what's the plan to get there?  How many units, properties, how fast can you acquire, are you full or partner, etc.  That will really help set your path to achievement.

Best of luck!

You can do it.  But I always think it's best to start with owning your own home.  Do you own or rent in Austin? You live in a great city with crazy appreciation.  

Well I definitely wanna own as many units as possible, my timeframe to get to 100k a year is about 5 years.. I'm a new investor, so the real goal is to at least get my first deal done very soon. Then hopefully it'll all flow smoothly. I've been looking at many deals but I don't know if I should go through hard money lending or not.. @Kenny Dahill

@Michael Cavitolo The first thing to do is pick and niche, learn it and stick to it. If you can find someone doing what you want to do, even better. It may take a few attempts to find a niche that works for you. For me personally, I went into single-family homes then into mobile homes before settling on my niche. It didn't happen overnight. You'll have to find something that work with your personality. If you need help and are interested in learning more about how to find your niche when it comes to real estate investing, I wrote a book on the subject. Hope that helps. Best of luck with everything! 

Michael,

I am on vaca overseas and will be back in Austin effectively Monday. Let's meet for Coffee. 

Some questions for you?

- 100k a year net or gross? Will be very very hard to do 100k a year net on rentals- even assuming you are into MF as a passive investor. You would need a lot more money to start with than 160k. There are some alternatives you can look at with a better return than 4-5 rentals which is all that will get you on conventional terms. Where did you get that # from? Is it random or is there a plan you are fulfilling with the 100k per year?

- are you w2 or 1099, can you get conv financing

- cred score

- dti ratios?

- any special loan programs you qualify for? VA?

- construction experience?

- preferred investment area?

+ much more.... I have an investor profile sheet you can fill out which answers most of these questions. 

It is very important to start with the end in mind. IE. retirement age, needed income, wanted income, liquidation plan, cash reserves plan, lendability plan....

Danny Webber, MBA, Broker- Home Simple of Texas

Owner- Investor Depot.com

Owner- The Texas Builder.com

Instead of “owning as many units as possible” I would own as few as possible with the same $100k/year goal. If you can own less and get the same income, you’ll have less headaches. Owning a ton of units isn’t a guarantee that you’ll be rich. Good luck and I’m sure you’ll get where you want to be soon!

Good morning Michael! I'm in Georgetown just north of you.

I would recommend that you look at San Marcos/New Braunfels, or the Temple/Belton market. Getting into the Austin market requires a lot of capital and if you're looking for cash flow, you're going to be hard pressed to find it there. You might be able to flip some properties in East Austin, but you'll be joining the crowd as everyone knows the city is gentrifying to the east.

Don't be afraid to go to another city as long as you can make the drive and learn about the economics. I've had success in buying SFR to hold in Temple/Belton.

Originally posted by @Chris Szepessy :

Instead of “owning as many units as possible” I would own as few as possible with the same $100k/year goal. If you can own less and get the same income, you’ll have less headaches. Owning a ton of units isn’t a guarantee that you’ll be rich. Good luck and I’m sure you’ll get where you want to be soon!

Absolutely agree, if it fits your intent.

Come up with your own game plan, which starts by learning.  If all you ever want is cashflow, then owning fewer properties with less debt (also known as leveraged) will be ideal.  The less leveraged (debt), typically lower returns but more cash earnings.  That is never a bad thing if it fits your need!

I look at any investing as a financial diet, the same diet doesn't work for everybody.  Same goes with any form of investing, so find your financial diet.  Ask yourself some important questions and be honest with yourself: how much stress do I want, how many hours managing will I spend, how risky am I comfortable being, etc.