How Would You START Your Real Estate Investing Career?

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How Would You START Your Real Estate Investing Career?

Kelly McJunkin
Real Estate Agent · Temecula, CA · Member since 2021 · 28 posts · 16 votes

Hello everyone, I have been following the threads for a while, but just made my own account here. I will be selling my primary residence in San Diego County next month. It is absolutely a sellers market, so I am expecting around $450k+ back from equity. I'm ready to dive-into real estate investing, and am curious what you would do as a first-time investor to generate a passive income initially and get the ball rolling?? I am open to rental properties, flips and wholesale. I would just love advice to point me toward the best starting point as a beginner. Thank you so much!

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Dave FosterBusiness Member
Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
5y

@Kelly McJunkin and @Kenton LeVay, Be careful with the "flip into 1031" maneuver.  Flips generally dont qualify for 1031 treatment because your intent has to be to hold the property for productive investment use.  If your intent is to resell that doesn't work.

But there is a way to feed your flipping soul and get tax relief.  It just takes a little runway.  Instead of fixing and flipping, fix and rent.  Then refi immediately so you can get the cash for your next "rehab project".  Now you've got two properties - one generating income and one your fixing.  As soon as it's fixed rent it and refi to get your next one.  Now you've got three properties and a year may have passed which is probably enough time to sell and 1031 the first property into down payments on your next two improvement projects.  Within a year and a half you can actually have levered yourself into 5 properties in various stages - some being improved, some being rehabbed, some being sold (but all of this is tax deferred).

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  • Bill Goodland
    Rental Property Investor · Allentown PA, United States · Member since 2016 · 567 posts · 442 votes
    5y

    @Kelly McJunkin I would make a bunch of stupid low cash offers on SFRs that need work utilizing the BRRRR process. I like single family because you can make tenants responsible for everything and if they're recently rehabbed are not very time intensive to manage. Once you're at 5-10 SFRs I would look into bigger deals in commercial space.

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  • Adam Edwards
    Financial Advisor · Saline, MI · Member since 2019 · 17 posts · 13 votes
    5y

    @Christopher B.

    Education via podcasts, books. I personally leveraged equity from my primary to start.

    0Reply
  • John Chua
    Member since 2020 · 2 posts · 0 votes
    5y

    @Lane Kawaoka can you recommend any turnkey providers? I’m currently on the waitlist with Mid South Homebuyers but would love to hear about other providers that you’ve had good experiences with!

    0Reply
  • Johnny Wolff
    Investor · Kansas City, MO · Member since 2019 · 130 posts · 118 votes
    5y

    Hi @Kelly McJunkin.  If your life-stage allows for house-hacking (or a live-in flip) that is usually my top recommendation for newer investors.  Like you just experienced - owning a house in an expensive market can really pay off.

    If not - I think it's important that you understand how different the three categories are that you mentioned:

    1)  Rental properties: This is an investment - and can be very close to passive.  Can be local and self-managed or out of state and managed.  Any of these options requires market research and running your own numbers, but the time commitment is still relatively minor.  You can likely self-manage 10 units either locally or out of state with a couple of hours of your time a day.

    2)  Whole selling:  This is a business (is that what you are looking for?).  As a business, it requires a fairly substantial commitment of time.  If you want a business, great.  This might be a good place to start.  But it will take substantial time as you get started.  Because there is a massive inventory shortage right now (driving the seller's market) this has become much more difficult / as great deals are becoming rarer and rarer.

    3)  Flipping:  This is also a business.  This is likely the most challenging of the three since it combines key aspects of the other two, as well as construction project management skills.  This should not be entered in lightly.  Some people think it's fun - but it's a ton of work from finding the off-market property to flip, to bidding out the work, to managing the contractors, etc.



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  • Muh Naufal
    Member since 2020 · 2 posts · 0 votes
    5y

    @Kenton LeVay hi, i would like to know.. is location still relevant to this era ? Or maybe we have more criteria for best place to invest in property. Thank you

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  • Evan Polaski
    Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
    5y

    @Gabriel Bures, feel free to send me a message on BP, and am happy to help.

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  • Kenton LeVay
    Investor · Austin, TX · Member since 2018 · 119 posts · 114 votes
    5y
    Originally posted by @Muh Naufal:

    @Kenton LeVay hi, i would like to know.. is location still relevant to this era ? Or maybe we have more criteria for best place to invest in property. Thank you

     The location that you invest into certainly is still relevant. Each market is different and it's important to know the intricacies. However, it's not necessary that you need to LIVE in the area that you are investing. Check out David Greene's book on Long-Distance Real Estate Investing for more info. 

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  • Kelly McJunkin
    OP
    Real Estate Agent · Temecula, CA · Member since 2021 · 28 posts · 16 votes
    5y

    @Mary M. Hi Mary! Thanks for your feedback. I have a good amount of experience with rehab projects, as I have done many on my own before. My father owns his own contracting business as well. Although, I would hire out for all work involved for time and efficiency purposes. I would not consider flipping out of my area, although I would love to do some other investing out of state.

    We will be renting for a while once we sell, to make RE investing a top priority and keep our money available and not tied up in another primary residence. 

    0Reply
  • Kelly McJunkin
    OP
    Real Estate Agent · Temecula, CA · Member since 2021 · 28 posts · 16 votes
    5y

    @Bill Goodland I love this advice, and have been leaning toward this! Any advice on how long to keep a property after rehab and renting it out, before selling? or is that solely based off the current market.

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  • Kelly McJunkin
    OP
    Real Estate Agent · Temecula, CA · Member since 2021 · 28 posts · 16 votes
    5y

    @Johnny Wolff Thank you for your feedback! We did consider a live-in flip.. but I tend to like to work quickly and I wouldn't want to live in construction ( I have 2 kids). I have experience with rehabs, as well as managing contractors from my own home projects, and watching my father who owns a small construction company in central CA. I do want a business, maybe not forever but I would like to put the work in now, to set me up for less work later on. I just want to start off on the right foot. If that makes sense

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  • Kelly McJunkin
    OP
    Real Estate Agent · Temecula, CA · Member since 2021 · 28 posts · 16 votes
    5y

    @Owen Schwaegerle I grew up in SLO, and my parents still liver there. Best place to live! House hacking may not be the best option for me, as I have a family. Two young kids. But, I wish I would have done this when I was younger. It's genius

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  • Kelly McJunkin
    OP
    Real Estate Agent · Temecula, CA · Member since 2021 · 28 posts · 16 votes
    5y

    @Craig Bliss Thank you so much. 

    It would be so wonderful to find someone in my area (heading to Temecula in a few months), that I could go in on an investment with and also learn the process from. Any investors in Southern CA? I am ready to invest and learn!

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  • Owen SchwaegerlePro Member
    Real Estate Broker · San Luis Obispo, CA · Member since 2016 · 181 posts · 69 votes
    5y

    SLO is a great place to live. Maybe you will end up coming back here some day!

    0Reply
  • Chris Levarek
    Real Estate Syndicator · Phoenix, AZ · Member since 2018 · 903 posts · 1k+ votes
    5y

    @Kelly McJunkin The world is your toaster! Just see from all these responses, so many options. I like checklists and processes so, I always recommend to new investors :

    1. Educate and Absorb all the various options.
    2. Select one.
    3. Find someone doing this strategy successfully. Via BP, Books, Podcasts, Social Media, etc.
    4. Copy them. Alternatively, partner with them.
    5. Set a goal to complete an objective on a timeline.90 days
    6. Take Action
    7. Rinse and repeat. Learn and grow, Adapt and modify to your liking.

    It really is all about picking one and taking the step. You will change and often the first step won't be even remotely close to where you find yourself in a few years. So no worries! You can't get it wrong :)

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  • Bill Goodland
    Rental Property Investor · Allentown PA, United States · Member since 2016 · 567 posts · 442 votes
    5y
    Originally posted by @Kelly McJunkin:

    @Bill Goodland I love this advice, and have been leaning toward this! Any advice on how long to keep a property after rehab and renting it out, before selling? or is that solely based off the current market.

    I would say it depends on the return you’re getting on the equity. A minimum of 1 year to allow you to 1031, or just lease it to one tenant and sell it to 1031 once they leave whether they stay for only 1 year or 5. Use the proceeds to buy another value add deal. 

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  • Craig Bliss
    Flipper/Rehabber · FL · Member since 2019 · 15 posts · 2 votes
    5y

    @Kelly McJunkin - Consider looking into real estate investor groups in your new area. A lot of them are meeting “remotely” - that might be a way to get in with the right crowd ahead of actually arriving.

    Do you belong to any investor groups currently?

    0Reply
  • Kelly McJunkin
    OP
    Real Estate Agent · Temecula, CA · Member since 2021 · 28 posts · 16 votes
    5y

    @Craig Bliss Thank you for reminding me to do that, I just found a couple and joined. So I will be active in those to find a good crowd in Temecula.

    0Reply
  • Paul MoorePro Member
    Commercial Real Estate Fund Manager · Lynchburg, VA · Member since 2015 · 1k+ posts · 1k+ votes
    5y

    @Kelly McJunkin.  Welcome to the BP Community!  I recommend you get Brian Burke's book on finding the best passive investments.  It's called The Hands-Off Investor.  

    While it may be more exciting to chase deals and captain your ship into the future, it is often less profitable.  It's like betting on a marathon runner (do they take bets on marathons??).  Would you bet hundreds of thousands on yourself right now, or on a top-rated runner whose been training for decades?  Sure, you may get the adrenaline rush by joining the race... but you'll probably lose your cash.

    Good luck! 

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  • Kelly McJunkin
    OP
    Real Estate Agent · Temecula, CA · Member since 2021 · 28 posts · 16 votes
    5y

    @Paul Moore Funny you mention that book. I just ordered it yesterday. Thank you!

    0Reply
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