Any and all advice appreciated

5 Replies

My background:

I'm a 33 year old engineer that has one 4-10 job and does contract work on the side for an average of 65hrs a week of work. I have $150k cash to invest in, I have an open line of credit for $250k with a great rate, and I have other investments I could pull from if needed. I live in California and have been house hacking my property for several years which more than covers my mortgage. In the short term I'm planning on quitting my day job and solely doing contract engineering to make time for real estate and to have a life...

What I want:

I want enough relatively passive income to cover day to day expenses, and only work for fun or on projects I love. My main goal is to have more free time, so I don't want to trade a full time job for full time property management, but I also don't need an investment to be entirely turnkey. I don't have a door count goal, but a good end goal would be to net $15k a month by 2030. I want to invest in properties I'd live in, and net at least $500 per month per unit to be worth the work.

What I don't want:

I don't want to flip houses, BRRRR, or make life miserable for my tenants. I have yet to have an unhappy tenant and I don't want to start now.

My thoughts:

Where I live properties are far too expensive to turn an ROI for buy and hold, so I'm looking at Tampa and Houston markets (I have a PM friend in Tampa already that I trust). I'm mostly thinking of muti family homes in middle income areas. With the cash on hand and the line of credit, I think I could offer cash for a MF and then refinance to pull out 80%. Then maybe do a conventional for a second. I've had a hard time finding decent ROI anywhere but I know they are out there. I'm mostly using DealCheck to analyze properties.

My request:

I would greatly appreciate any and all advice; areas to invest, investment types, financing options, etc.

Thank you all for reading my small novel, and for taking the time to help a fellow investor.

Sincerely,

Luke Haberkern

My first thought of advise would be to budget property management into your numbers when you are buying. Like you said, you do not want to change one job for the other. The entire goal here is to have more fishing time right? Sounds like a solid retirement plan, best of luck! 
I would love to show you what the Jackson Mississippi area market has to offer if you have time for a call sometime. We have amazing returns with high appreciation. 

This is the first time I've seen properties appreciate to any extent in Jackson, MS since Hurricane Katrina (New Orleans won't fit here), however the returns on investment have been great. 

@Luke Haberkern

Hi Luke,

Reading your small novel reminded me of the exact mindset I had when I started my investing journey. I’m an engineer as well and now spend about half of my “working” hours still in engineering and the other half in RE. I’m 9 doors in and have built a decent portfolio here in Houston with a very similar strategy that you have laid out.

My advice is to stick to your numbers of that $400 to $500/door per month. There are good and bad months but it all ebbs and flows. I have no regrets and low stress knowing I will at bare minimum break even with that $500 per month cushion from the original numbers. You are an engineer, so trust your numbers and buy in when the numbers run. It’s really that simple.

I also advise you to be the property manager for your first few. You will learn so much as to what is important to your landlord standards. It sounds like you are currently doing that now but it does add a new level when you don’t see the property every day.

My drive is also the same as yours. I want my time and my freedom. Let that be the driver to not buy the premium car and to curb lifestyle creep. I promise you it’s worth it. Good luck! I hope to see you back on here in a few years encouraging others to chase that freedom.

Originally posted by @Luke Haberkern :

@Holly Kaufman thanks Holly! And congrats with the 9 doors, you're well on your way. I'm also looking at commercial real estate as well since 8 think I can find better ROIs with the current market. But I have a lot of research to do.

Yes, you do have a lot of research to do but it will all worth it. Start your research with Niche.com

Goodluck

 

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