Real Estate Agent · Realtor - Dallas, TX · Member since 2013 · 342 posts · 55 votes
...I can save/accumulate $15,000- $20,000 per year to acquire properties....realistically, how many properties for buy and hold can I acquire per year at this rate?...just trying to set proper expectations and to see if I need to plan on finding more income....thanks in advance.
Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
12y
That depends where and what type of housing you are trying to purchase and finance , If you go to Detroit , you could probably buy 3 a year for cash , if you go to San Francisco you may not get too far .
Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
12y
@James Mudd That depends on many other factors. The biggest being, where do you want to invest, and what is the market there? There are areas where you can buy a house for that much money and others where that would work for a deposit.
@Ali Boone invests in other states with more affordable prices than California, maybe she can weigh in, as well as @Marco Santarelli
Investor · Willow Spring, NC · Member since 2013 · 788 posts · 285 votes
12y
It all depends on where you are buying, your risk tolerance, how much leverage you want to use etc.
In some areas, $20k, can buy you 40 homes in cash. You could use $20k and put down 20% and pay closing costs on 2 $40k homes. You could put the whole $20k down on 1 $80k home.
The number of properties is insignificant without establishing your other goals first. Define those, then back into the number of properties you need to accomplish those goals.
Do you want to use leverage? Or pay cash?
Do you want to buy for cash flow? Or appreciation?
Real Estate Agent · Realtor - Dallas, TX · Member since 2013 · 342 posts · 55 votes
12y
@Account Closed ...yes, I'm planning to ramp up the real estate...my 9-5 job is good income, however I hate waiting 2 weeks for a paycheck...drives me nuts. I want to create my income every day !!!
Investor · Dallas, TX · Member since 2009 · 718 posts · 913 votes
12y
It really depends on how much you have left of your own cash in a deal when the dust settles (after rehab and permanent financing is in place). Could be infinite if you have none of your own cash in the deal. (I've only done that a couple of times.) I'm in your area and invest in the $80-150K SFR range, and I could probably get 2-3 houses (maybe be 4 if I really hustled). Again, though, my circumstances are unlikely to be similar to yours so I'm not sure how much that information helps.
Real Estate Agent · Realtor - Dallas, TX · Member since 2013 · 342 posts · 55 votes
12y
Thank you @John Chapman It will be my first property...so I am starting from square 1...I would like to invest in the price range you mentioned as well.
Involved In Real Estate · Lynchburg, VA · Member since 2013 · 246 posts · 75 votes
12y
Best advice I can give you is use the concept of modeling. No, not get a new wardrobe ;)
Look at what works in your area and model your new business around it. If your market has good rental areas then see what successful people are doing and copy it. Same for being a RE agent, you don't reinvent the wheel, you look at what top producers do and you do the same (better).
If I were you I'd focus on the agent side of things for 6 months to a year. You'll develop a big network which will then make the transition very easy into your other business.
Real Estate Agent · Realtor - Dallas, TX · Member since 2013 · 342 posts · 55 votes
12y
@Account Closed ...I like your idea. I am feeling EXTREMELY motivated to be a top producer in real estate...one of my character defects is PATIENCE...I want to get things done today, not tomorrow. I think real estate sales will help satisfy some of that and at the same time build my knowledge base... and the networking will be great too!
Investor · Lafayette/Baton Rouge, LA · Member since 2013 · 1k+ posts · 915 votes
12y
I disagree with Patrick D. and offer a couple resources for you to use to help you decide. The blue book and the red book.
Gary Keller wrote The Millionaire RE Investor (blue book) and The Millionaire RE Agent(red book). I am following the blue book. My license is with KW and everything that the brokerage focuses on and promotes, as it should, is about being an MREA. My plan is to be an MREI.
It takes a lot of time and effort to be a productive REA and I think the opportunity cost is more than I'm willing to accept. IMO.
I disagree with Patrick D. and offer a couple resources for you to use to help you decide. The blue book and the red book.
Gary Keller wrote The Millionaire RE Investor (blue book) and The Millionaire RE Agent(red book). I am following the blue book. My license is with KW and everything that the brokerage focuses on and promotes, as it should, is about being an MREA. My plan is to be an MREI. It takes a lot of time and effort to be a productive REA and I think the opportunity cost is more than I'm willing to accept. IMO.
Which part do you disagree with? Yes, I agree, being a top producing real estate agent takes too much effort and shouldn't necessarily be the end goal over the next 25 years. But that wasn't the point.
In the Gary Keller books that you mentioned, he spends a lot of time talking about building your team and how important it is to your long term success. By being an active agent you do that - you start to know the agents, the lenders, other investors, home inspectors, appraisers etc. I feel that is invaluable.
You also start to know neighborhoods intimately and can figure out the real value of the properties. Another advantage is the marketing you send has dual purpose, letting you both buy or list the properties.
I genuinely believe that him becoming an active agent is an awesome gateway to becoming a successful investor.
With $15k to $20k per year of investment capital you can finance properties up to $100,000 using financing with a 20% down-payment ($80,000 at 25% down).
Without getting into specific markets here, there are a number of opportunities in good markets open to you. You can even get into some duplexes to to increase the number of units purchased to help you "move faster".
As far as increasing your annual income to purchase more property sooner, you may want to consider starting small business of some sort on the side to supplement your regular income. You probably don't want to change jobs for higher pay if you plan to finance since that may disqualify you from financing.
Real estate investor · Las Vegas · Member since 2013 · 798 posts · 171 votes
12y
@Patrick D. that is a good point. As you mentioned, for a year or so, that avenue provides a lot of education and networking. @James Mudd it is good to want to get going and get things done, but patience will have to be part of your plan as starting at square 1, it can take time to get started. But as long as your always working toward your goal, it should get easier as you learn things, work w/ more people, generate cash flow, and build your reputation in buy and hold.
Investor · Appleton, WI · Member since 2012 · 1k+ posts · 464 votes
12y
I would just be wary of moving too quickly without having a solid base. This solid base includes being financially sound, repair and maintenance knowledge, and landlord/tenant law knowledge. If you grow too fast and are behind in these areas, things can go bad quickly. If you stretch financially to make another purchase then come into an unexpected repair. Now you are hurt even more financially. If you don't know how to make the repair then you leave yourself open to paying way too much for the repair. If you don't make the repair correctly you might lose your tenant or not be able to get one and cause a delay.
I always look to strengthen my financial base. This includes making sure my properties are financed in a way that aligns with my long and short term goals. I always look for ways to improve my properties that will create equity, increase rentability, tenant retention, and rental income. If my base is solid and I am able to then take advantage of opportunities to come my way. Growth is fantastic but it doesn't habe to come from buying another property.
Real Estate Agent · Realtor - Dallas, TX · Member since 2013 · 342 posts · 55 votes
12y
@Kyle Hipp ...great points Kyle...thank you for sharing. I know I must be careful not to get in over my head. Sometimes my enthusiasm gets me in trouble!
Investor · Lafayette/Baton Rouge, LA · Member since 2013 · 1k+ posts · 915 votes
12y
@Account Closed the part I disagree with is what I think @James Mudd understood to be a recommendation work on becoming a "top producer" as an REA. I appreciate the benefits of knowing the market and a laundry list of other benefits that are reasons I've recommended here on BP to become licensed. However, I think when you start talking about becoming a top producer as an REA, that's takes more commitment to that side of the business than I think allows you to work toward becoming an MREI.
Sure, if you want to take what I think is a slower route to becoming the MREI as an REA, you can, but that's more of a time commitment to being an REA than I want. I'm not advocating any kind of get rich quick strategy, just a way that I think is a better approach to accomplishing REI goals. This is my opinion based on my personal experience and preferences. Just a different way of looking at the situation for James to consider in his decision.
Real estate investor · Las Vegas · Member since 2013 · 798 posts · 171 votes
12y
@Robert Leonard you may be right about not spending the time to get to the top, but utilizing time to learn things can actually accelerate your growth as it will help you avoid bad deals and have a better understanding of what it will take to meet your goal. It should also provide a network that could help finding deals that put you ahead of the game that might not be realized just jumping in.