New to Forum & RE Investing

13 Replies

Hello, I'll make this quick for now. I've wanted to do RE but initially didn't have the funds and didn't know how to get around that. Worked part time through the crash and would have had the time. Got married and for a while wife didn't want to do RE because her father "suffered" through it for years. Now that I'm full time we think it might be an interesting way to transition to working less. We'd like to move out of state (IL) in a few years to one of the "mountain areas" in the country. I wouldn't mind the first rental or two being close to me to learn but eventually I'd like to work turnkey (maybe) for the areas we're looking at (likely TN). So if anyone has turnkey tips feel free to post them or point me in the right/forum or direction. Already learning good stuff on here and the podcast. Thanks for all the posts. 

Daniel

Good morning everyone. Im a little new to the RE world. I have been reading as much as I can on how to land my first deal but either i didnt have time to research the deal or i didn't have money to buy the nesseccary subscriptions. While I'm waiting to go over the road, I will be reading as much as i can. 

Originally posted by @Daniel O'Neill :

Thanks Guys!

@Michael Dang Get uncomfortable how?

There are numerous ways.  From what you briefly mentioned, they are calculated small steps.  Take a bigger step.

  • Go bigger and target 5+ units, commercial side.
  • Consider not buying turnkey properties, find some properties that need some value add or have been neglected.
  • Cast a wider fishing net and search for properties in the county and surrounding counties where you may move too.
  • Understand the local tenant and state laws
  • Connect with brokers, mtg brokers, property mgmt companies, other investors or potential partners.  Your future TEAM members.
  • Research Notes, Land, Self Storage, Industrial, Retail, Office, or other real estate asset classes that you maybe interested in.

Lots of other ways to take bigger uncomfortable steps to get to your goals faster.  Just don't go at it alone and that's why BP is awesome!

Hi Daniel,

@Michael Dang is on point. Turnkey properties will have a lower cash flow and upside potential. Value-add deals, once stabilized, will have hight cash flow and equity potential. Plus, you'll learn a lot more by going through the renovation and leasing process. 

If your plan is to work less, you may want to consider becoming a passive investor in apartment syndications.

Originally posted by @Daniel O'Neill :

Hello, I'll make this quick for now. I've wanted to do RE but initially didn't have the funds and didn't know how to get around that. Worked part time through the crash and would have had the time. Got married and for a while wife didn't want to do RE because her father "suffered" through it for years. Now that I'm full time we think it might be an interesting way to transition to working less. We'd like to move out of state (IL) in a few years to one of the "mountain areas" in the country. I wouldn't mind the first rental or two being close to me to learn but eventually I'd like to work turnkey (maybe) for the areas we're looking at (likely TN). So if anyone has turnkey tips feel free to post them or point me in the right/forum or direction. Already learning good stuff on here and the podcast. Thanks for all the posts. 

Daniel

 Welcome to the site Daniel.

@Daniel O'Neill Lots of strategies and agree with the getting uncomfortable advice. Figure out how much time you can dedicate to it and take an honest assessment. If your goal is to work less, spend time getting to know turnkey providers or apartment syndicators as @Theo Hicks mentioned.

@Daniel O'Neill

Daniel - Welcome to BP!

A few thoughts as you begin your journey into RE investing:

1) Follow the advice of the above folks - don't go turnkey. Turnkey properties (along with any single family investments) carry significant tenant and capex risks. One bad tenant or an unexpected roof leak can decimate your return.

2) The biggest determinate of an investment's success is property manager (also referred to as operator). Do your research, and choose wisely.

2.5) Never sign a long term property management agreement with an early termination fee -- keep flexibility to replace your manager (you only have to make that mistake once $$$)

3) Consider investing in a large property as a partial owner rather than buying a small property, especially early in your investing career. When you invest alongside an experienced team, you'll learn a load of good information that can be applied to your future investments. I think highly of @Omar Khan and his operation -- I'm sure he'd be happy to field your questions about investing as part of a syndicate.

Best of luck!

@Tyler Kastelberg Thank you. I'm a big believer in your business model and know you're killing it with your flexible CFO business which is bringing a ton of value to small-to-medium sized businesses. 

@Daniel O'Neill Tyler hit the nail on the head. The operations will make or break you. It is critical to have a solid property manager with a proven track record. I would suggest interviewing 3-5 candidates, describing your situation and asking how they would best serve your needs. 

I have also learnt a ton by networking with local investors. They can provide you "boots on the ground" knowledge as well as be a good source for referrals. The latter is very important as finding the right GCs is not an easy task. 

My personal preference is multifamily (disclosure: I'm a multifamily syndicator) but I know different people prefer different strategies. 

I wholeheartedly agree with  @Michael Dang that this is a continuous education process. Even after valuing complex assets for over a decade, every day I pickup small nuggets of information that enhance my knowledge while providing perspective. 

Nonetheless, there is no substitute for actually going through a transaction. You shouldn't rush into it but don't get crippled by "paralysis by analysis". Plan, educate, network but then go out and take action!

Always happy to help and provide insights. 

@Daniel O'Neill Syndication, both as a passive or active investor, is a great investment strategy. I'm sure the podcast you listened to was a good introduction, but if you want to learn more, I recommend picking up Joe Fairless' new book, Best Ever Apartment Syndication Book.