I Got Lucky on My 1st Deal~ Now What?

Question

Hi Everyone,

I pulled a the trigger on my first property a little under 2 years ago; a tripled in a college town near my last duty station in the Air Force. It worked out great; I paid nothing out of pocket, got a great PM, awesome tenants with 100% occupancy, and got the REI high.

I got lucky. I fell in love with REI, and now I’m excited to press forward. I’ve been saving, learning, structuring (legally, financially, management, etc.), but now I’m finding myself unsure of what’s next! I’m saying “Okay, I got lucky and dived in. Sweet! Uh...now what?”

Anybody else feel this way? Anybody else struggle to formulate strategy after starting out? Let’s chat about it!

Let me hear from you! -Nick

Zach Westerfield · Answer

Nick,

i didnt get as lucky as you on the first deal, but i do understand how you feel. i did several and it took a "seminar" on my third property to make me reevaluate my real estate investing path. I would say start by defining you end goal. Where do you want to be in ten years? Do you want to be a property manager in ten years? if so, then deep dive into learning property management. if not, then learn the basics, and focus on your end goal.

break that goal down into 5 and then 1 year goals that will get you to your ten year goal.

for example, say your goal is $5,000 per month in income in 10 years, for financial freedom. If you assume each unit you own nets about $100 per month in cash flow, thats 50 units. So you need to buy approximately 10 units per years.

your goal for the next year is buy 10 units. Now use this to set your weekly/monthly action goals. To buy ten units, you probably cant use the same methods you used before. You need two things, deal flow and capital. so each week or month, set actions that work towards creating deal flow and capital. focus on that. read books and learn those topics.

this is just an example, but this is the thought process i have been employing. its easy to get distracted on other aspects or ventures since there are so many different approaches to real estate.

Tim Jacob · Answer

Being in the miltary Im going to make the assumption you used the va loan to purchase which helped eliminate a lot of capital you would need to infuse into a multifamily deal.  If Im wrong let me know.

Being that the case I think your next step you will need to put a lot more down to get another.  The least capital intensive road is to brrr single family.  You will still need a lot upfront.  Appraisals will be more kind then small multi and the reno will be easier to absorb bc its 1 unit.  You could get into larger 5 plus unit stuff but be careful with the go big or go home thing.  A large 5 plus reno will be very stressfil and capital intensive until the refinancing.  If brrring single family do 1 at a time in decent areas and  if you project manage properly where you live it should be ok.  If you have to pcs it should be fine after the reno bc pm should not be that hard.

Jon Kelly · Answer

@Nicholas J. Cammaroto Repeat the process! Leverage your existing contacts from the first deal (agent, property manager, title company, property inspector, contractor(?), etc.). All of the time and energy it took to buy the first deal should make the others easier.

I Got Lucky on My 1st Deal~ Now What?

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