I want to jump back in and do that first deal so bad I can taste it, like the turkey cooking in the oven, but every choice I make limits the next set of possible choices so I need to do it right from the beginning. The easy route is to nice turnkey cash flow deal with decent return and move on to the next one with my 500K budget. Though with only 10 consumer loans available and three used up, how many deals of $200 a month positive cash flow can I afford to do and is that really the best ROI i can do?
I have been spending about 3-10 hours a day reading and educating myself on RE, and I realized I really didnt know what I didnt know. I also am from Ca, so out of state is a likely option. In which case should i try to value add by doing a brrrr, or go with a partner, and how do I find a partner? Where should I go to really drill down, learn the market and build network that's a balance between inventory, appreciation, and cash flow? It's easy to find one or two of the three, but all three is a challenge it seems like and everyone has their opinion.
I am thinking I need to find a process that fits me, as I am good at analysis, but I'm not a salesman. Then I need to find a location that gives the most chance of success, where I can start drilling down into the submarkets. After a couple weeks of research this is where I am at, does any of this make sense? Or should I "go fish". Thanks!
Neil, any possibility of you going commercial? Either 5+ unit buildings or NNN properties?
In the last three years I bought a 10-unit, an 8-unit, and an 18-unit. I sold a 3, 4, and 4 and 1031'd them into nice STR IN north Myrtle Beach. I just sold the 10-unit I bought 3 years ago and am seeking a couple of NNN commercial properties now in the Carolinas. All while working a full-time job.
My point is don’t settle into a comfort zone. Have faith in your decisions and push some limits. If you do the math conservatively on the front end it will be very rewarding.
Wow, just went I thought I was narrowing things down! Hummm. That definitely as its appeals including limiting the number of buyers willing and able to make that purchase. I have a back ground in accounting and finance, so I could do the numbers, but how you protect yourself? See so many newbies post on here on the "great" deal they made when everyone sees the red flags they don't. I will add reading a book on commercial property to my list. Do you any recommendations on where to start on education? Thanks!
In Multi family, there’s no difference in the analysis of a 2 unit or a 20 unit. Same math - cap, cash flow, ROE.
Commercial assets such as gas stations, fast food, etc.. are a different game and require an extension of effort. Same three above, but in dealing with a NNN property you really need to check what is included. I've seen the claim of an "Absolute NNN" with "zero landlord responsibilities " until you dig in and discover structure and roof are landlord responsibilities.
You also look for a very different kind of broker. A commercial broker will better understand price per square foot comparisons, cost to enter markets, rent/revenue ratios, and a bunch of others.
Just google some areas and you’ll see plenty of educational material.
Determine your target market and start analyzing real opportunities. That will take you farther and faster than the books. There are thousands of BP posts on market selection...just have to go to work on this one. Then make decisions with the best information you have at the time and pivot as you go. Many of the answers to your questions lie in taking action (real analysis and offers).
You’re on the right path if willing to go out of state. 500k would cash flow you heck of a lot more than 200 a month in the Midwest. Then repeat every 2 years until you’ve hit your 10.