Newbie to 5 units in 7 months!

Newbie to 5 units in 7 months!

Contractor · San Jose, CA · Member since 2018 · 262 posts · 407 votes
I want to personally thank the BP Community for being so helpful and very humble with all of the questions us newbies always have. With the help of this great network my wife and I were able to start our OOS investing career at the close of 2017 and we are very blessed and thankful to say that we currently have 5 units under our belt and are in the midst of acquiring 2 more before the close of this year with the amazing growth that we gained from our first unit which we are in the process of doing a cash out Refi on. Alot of people here in the Bay Area think that OOS investing is crazy, that I'm out of my mind and that you can never grow wealth this way and that you should invest here in the Bay and blah blah blah so it was very difficult to learn and go at this alone until I found this beautiful network of good folks doing it everyday! My thing was always, sure I can invest here in the Bay Area but by the time it would take me to acquire $150k down payment I could have taken the opportunity and purchased 5 properties out of state that cash flow positively getting more bang for my buck. All I needed was a good team in place which I'm blessed to say I have in the 2 markets that I'm currently vested in. Our first deal (SFR ranch is sitting at a 10% COC return after all expenses, vacancy, maintenance, capx,property management, PITI etc.. our second deal (4plex is sitting at an 8% after the same expenses with meat on the bone to get me closer to a 9.5%) For all of those that were newbies like me hearing negative things and that you cannot build wealth, I'm here to tell you that yes you can! We have so much valuable information at our fingertips to make this possible especially with the amazing community here on BP! Thank you again all, I'm humbled and very much appreciate all of you! Junior
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Real Estate Investor · Palm Beach County, FL · Member since 2017 · 3k+ posts · 2k+ votes
8y

You never mentioned where you are investing out-of-state.

See this reply in the discussion

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  • Investor · Los Angeles, CA · Member since 2015 · 90 posts · 27 votes
    8y

    Congrats on your success.  How did you choose those markets?  And did you get the properties from BP connection?  What do you advise for us other newbies who haven't closed on anything yet?

  • Rental Property Investor · Denver, CO · Member since 2017 · 82 posts · 38 votes
    8y

    @Junior Soares

    Hey Junior, 

    This is extremely encouraging to hear! I just made an offer on my first OOS duplex in Indiana. We’re under contract now and should hopefully close in September! 

    We are looking into some Michigan markets as well for the future, and I find Midland an interesting choice. I actually lived there for a few months during a work project a few years ago. I’d love to talk to you more about Midland and find out who your contacts are out there! Could I PM you to talk more about it?

  • Seattle, WA · Member since 2016 · 6 posts · 3 votes
    8y

    @Junior Soares great story and good job! 

    Mind giving some advice about building those team where you are investing? Maybe one lesson learned or key idea going into it that helped you build your team.

    Thanks!

  • Contractor · San Jose, CA · Member since 2018 · 262 posts · 407 votes
    8y
    @Albert Chen yea brother, feel free to PM anytime. Let's have a conversation
  • Contractor · San Jose, CA · Member since 2018 · 262 posts · 407 votes
    8y
    @Dantez Alonzo Thank you! And yes, do your due diligence! Very important to run all of your numbers to make sure you're comfortable with the end result
  • Contractor · San Jose, CA · Member since 2018 · 262 posts · 407 votes
    8y
    @Katie Fiola Jones Absolutely, PM me I'd love to share my connections
  • Investor · Indianapolis, IN · Member since 2017 · 145 posts · 158 votes
    8y

    In learning any trade, art, craft, or skill, it's pleasant to have people to cheer you on. But it's not very useful. It's nice, for example, when your grandma tells you she loves the chair you made. But it's much more useful when your crabby old grandpa says, yeah well the dern thing squeaks every time I sit in it, and here's how you do it better next time. 

    BP has a lot of cheerleaders, and that's nice. But if people really need to be encouraged, congratulated, and flattered on what they're doing with their money...and if skeptical people who offer criticism are called "haters"... something is badly wrong with the business climate. 

    Obviously Mr. Picanco is free to invest his money as he sees fit, and best of luck to him, of course. But I'm not sure these deals are as solid gold as he seems to think. I think some of the numbers are unrealistic in the longer term, for one thing. For another, these houses are both in small towns. And as we've seen repeatedly in this country, anything can happen to the economy of a small town, it can happen very quickly, and it ain't always good. 

    Then there's the whole OOS issue. I know it can be done, because I know a guy who has done it successfully. One guy. He invests in my city from 1100 miles away. And he has spent so much time here that he knows the place about as well as I do, and every waitress and bartender is on a first-name basis with him. He is handy and does a lot of fixup work himself. He knows the neighborhoods intimately, he has bought very very smart and cheaply, and he has built good personal relationships with all sorts of people here. And he knows the metrics here enough to trust that the economy will probably keep chugging along, neither booming nor busting. 

    That is how you invest OOS, if you must. I don't know a single other guy who is doing it anywhere near as well. 

    What really surprises me is that people are seeking advice from Mr. Picanco. You know, if you want to learn this trade...and there is a lot to learn...you can go to local meetups. You will meet people who have made a living in RE for 20 and 30 years, and they will gladly share what they know. All Mr. Picanco has done so far is...he has bought two houses. He has not yet shown that he can weather an economic downturn, a factory closing or two, a unit that won't rent, breakins, a stolen AC, vandalism, plumbing leaks, falling gutters, frozen pipes, flooded basements, tenants with pitbulls, tenants with angry felonious boyfriends, tenants who won't pay, property managers who take the money and flee to the Caribbean, and the whole list which runs to so many pages. 

    In fact, I was about to respond to this thread several hours ago, when I got the strangest phone call about a house we just bought. I had to drop everything and head over there, try to figure out why there was a huge puddle of blood on the floor and at the same time improvise a quick temporary fix for an (unrelated) leaky pipe. It turns out everything is fine, everyone is recovering nicely, and all it cost was my time. But if I had to have that done by an OOS property manager, and a plumber, what do you think that would have cost? 

    If Mr. Picanco can weather a few years of this sort of thing without going broke or burning out, his advice will be well worth listening to. But at this point he is, no offense, just an optimistic guy...maybe over-optimistic... who has bought two houses, and started a business which may or may not pay off. 

    And those of you who want to learn the real estate trade, should be learning it not from him, but from the grumpy old guys who've proven that they can make a living at it. 

  • Investor · Indianapolis, IN · Member since 2017 · 145 posts · 158 votes
    8y
    Originally posted by @Account Closed:

    >What Caleb means by ROUGH tenants.

    >You know the show COPS.    You see the guys getting handcuffed.   Those are your clientele.

    >If you think you are going to retire off these d class properties you will be sorely dis-appointed.

    This comment gets a gold star. 

  • Long Beach, CA · Member since 2018 · 4 posts · 5 votes
    8y

    Congrats! Inspiring me to stop lurking and take action!

  • Santa Monica, CA · Member since 2018 · 9 posts · 4 votes
    8y
    @Junior Picanco congratulations my friend! Stories like this, inspire us newer newbies to keep going! Keep it going! Would love to see your future posts: from newbie to 100!!!!!
  • Member since 2017 · 125 posts · 37 votes
    8y
    @Junior Picanco you are correct! I live in the bay area and i own property out if state. They are scared to think out the box so they will hste on your vision. But they will ve left behind while we climb.
  • Member since 2017 · 125 posts · 37 votes
    8y
    @Junior Picancoans and those people in the bay area act like the bay is the only place that people want to live smh, people live all over this country.
  • Lender · Glen Burnie, MD · Member since 2018 · 39 posts · 12 votes
    8y
    @Junior Picanco sorry I’m a newbie what is OOS
  • Contractor · San Jose, CA · Member since 2018 · 262 posts · 407 votes
    8y
    @Pete Barrow no offense taken sir, and you are absolutely right! I am still a newbie and in the learning phases with a great team of seasoned mentors and investors behind me who have been doing this their entire careers. I absolutely agree with you that I'm in no position to give any advice to any future investors on where and how to invest their money. All I can do and did was Express my gratitude to this amazing community and how I was able to get started and get my feet wet with the help of them and amazing investors in the game like yourself who has been doing it and knows what they're talking about and share my story with them. Thank you for chiming in and offering your perspective on all of this I very much appreciate it. God bless, Junior
  • Contractor · San Jose, CA · Member since 2018 · 262 posts · 407 votes
    8y
    @Sean Beksinski out of state brother
  • Contractor · San Jose, CA · Member since 2018 · 262 posts · 407 votes
    8y
    @Jacque Sacramento I appreciate the kind words, many thanks. I will definitely look up that gentlemen that you mentioned and see if maybe we can connect and if he can offer any advice. For me, this is just another investment vehicle that I'm very interested in getting into and since I'm still very early and new to the game I'm very willing to learn from the pros and take some of their advice and implement it into my business. I appreciate the feedback Blessings Junior
  • Investor · Indianapolis, IN · Member since 2017 · 145 posts · 158 votes
    8y
    Originally posted by @Aaron Maxwell:
    @Junior Picanco you are correct! I live in the bay area and i own property out if state. They are scared to think out the box so they will hste on your vision. But they will ve left behind while we climb.

    I appreciate Junior's positive attitude. But "the box" is there for a reason. The stuff inside the box, pretty much works if you use it right. If something new turns up outside the box, and it really works, it gets moved into the box! Investing OOS has not been moved into the box yet, and I don't think it ever will be. "Knowing a whole lot about things before you invest in them" is always going to be inside that box.

    "They will be left behind while we climb." No, actually, there are a lot of people "climbing" in REI via the time-honored way: hard work, cautious well-researched investment, intimate knowledge of changing local markets, countless hours spent thinking about how to gain a small advantage in a very competitive field.

    I shouldn't complain about the OOS investing phenomenon. It is creating a massive transfer of wealth from the west coast to the Midwest, and that works for me in many ways. I just don't like to see good hard-working people like Junior Picanco lose their money. 

    By the way, ask yourself: why is it that all the knowledgeable old guys who aren't out to make a buck off of you will warn you off of investments like these, and the people encouraging you are trying to sell you courses and seminars?

  • Investor · Indianapolis, IN · Member since 2017 · 145 posts · 158 votes
    8y

    You are a real gentleman, Junior, and I wish you the best. The "American Dream" is a real thing, and I hope you can make it come true for yourself and your family. I was a builder myself for most of my life, and so I know your money doesn't come easy. I hope you'll be skeptical and careful with it; because before you know it, that baby is going to want to go to college. 

  • Lyndhurst, NJ · Member since 2017 · 19 posts · 6 votes
    8y

    Thanks for sharing your story, Congrats to you Junior....Outstanding and continue with that drive and success!  BP is an awesome resource, the best I feel for what we are doing.  I'm here in NJ...haven't made the plunge into the OOS Investing (as of yet).  All the best buddy and Keep the Faith  -  Mike

  • Rental Property Investor · Charleston, SC · Member since 2015 · 33 posts · 13 votes
    8y
    @Junior Picanco awesome post. I’m in Redwood City and closed on my second OOS last month. Sent you a message to connect via DM. Would love to compare thoughts.
  • Rental Property Investor · San Lorenzo, CA · Member since 2016 · 22 posts · 7 votes
    8y
    Originally posted by @Junior Soares:
    @VB Phom Good afternoon, I have both properties in an LLC reporting up to a holding LLC. The holding LLC holds my positive cashflow while I run each property with their own accounts. Helps me with organizing my taxes at the end of the year with my P&Ls

    Best, Junior

    I assume your LLC and holding LLC is registered in California. What made you want to register it in California than the states your properties are in?

  • Rental Property Investor · Phoenix, AZ · Member since 2013 · 919 posts · 911 votes
    8y

    @Junior Soares, if these are Cali LLC's, isn't there a $900 a year fee PER LLC? I think that is what my CPA was saying.

    @Barclay Chan, I seriously doubt they are Cali LLC. If they are 'nested', that's $2700 a year just in FEES. ;-)

  • Newport News, virgina · Member since 2017 · 4 posts · 0 votes
    8y
    @Junior Picanco congrats I love to hear success stories like this I also am a newbie I understand when you say it was hard to get advice from people around you but you overcame thanks for sharing I needed that push
  • Walnut Creek, CA · Member since 2017 · 15 posts · 4 votes
    8y

    Very encouraging!

  • Hatfield, PA · Member since 2018 · 12 posts · 3 votes
    8y
    @Junior Picanco congratulations! If you don't mind me asking what was your previous for setting up a team in another state and when did you know you were ready to go for it and buy the first property? I'm guessing it wasn't that the stars aligned and everything was perfect.
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