Old guy newbie: is it too late for me?

Richmond, Virginia
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Old guy newbie: is it too late for me?

Bradley R Stillabower
Member since 2022 · 25 posts · 8 votes

The BP community seems to cater primarily to the "Young and the (financially) Restless" , but I'm a 55yo retired military and soon-to-be-retired federal employee (14 months), considering one final encore career for 5-8 more years before fully retiring.  Wondering if that is enough time to accumulate a portfolio of investment properties that will generate between $50k-$100k per year of income to (help) pay for may daughter's grad school (student loan debt is anathema to me), and then continue to augment our pension and stock portfolio throughout retirement and finally leave as inheritance.  My only real estate experience is the four primary residences we've bought/sold for ourselves over the past 25+ years, one of which we tried to keep and rent, (but not a good experience).  My research so far is leading me towards small multi-family properties as the most efficient path toward my goal.

If I do pursue this, what is the best use of my time over this next year to educate and prepare?  A real estate license?   A BP boot camp?  Can I start with the Multi-family Boot Camp, or does it build on the Rookie Boot Camp?

I think I've read most of the free BP content by now, and it's been a fantastic one-stop-shop of educational material.  The Multi-family webinar was a very tempting intro to the analysis tools, which, as a numbers/data guy, are really enlightening, and comforting to know those tools are available.

Thank you,

Brad

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Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
4y

It is never too late.  Not everyone here is young and many started later in life which is usually when we have more money to invest.

To borrow money, you will need regular income from an employer.  The chances of you getting enough property to reach your income goal before you retire early in a year is pretty low unless you have a huge nest egg.  Start by looking at home much money you have to invest and how much you can borrow.  Most people buy with 20% down and that means they don't cash flow a lot until their mortgages are paid off.  Some people buy with all cash, but that limits how many you can buy.  It does increase your cash flow as far as the rental goes, but you get less return on your investment.

You mention your daughter going to grad school.  Is she already in college/university?  If she is starting, buy a house or duplex in that town.  She can live in one room and you can rent out the other rooms. That covers her living expenses which is one of the main costs and allows you to get into real estate.  Keep that property and when she goes to grad school, repeat the process.  You can get a property manager to look after house 1 after your daughter leaves. 

I don't know where your daughter is planning on going to grad school, but I can tell you in Canada no grad school I know would cost close to that including living expenses.

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  • Eliott Elias
    Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    4y

    Never to old. The real estate we buy will last longer than my life time and my kids. 

    1Reply
  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    4y

    It is never too late.  Not everyone here is young and many started later in life which is usually when we have more money to invest.

    To borrow money, you will need regular income from an employer.  The chances of you getting enough property to reach your income goal before you retire early in a year is pretty low unless you have a huge nest egg.  Start by looking at home much money you have to invest and how much you can borrow.  Most people buy with 20% down and that means they don't cash flow a lot until their mortgages are paid off.  Some people buy with all cash, but that limits how many you can buy.  It does increase your cash flow as far as the rental goes, but you get less return on your investment.

    You mention your daughter going to grad school.  Is she already in college/university?  If she is starting, buy a house or duplex in that town.  She can live in one room and you can rent out the other rooms. That covers her living expenses which is one of the main costs and allows you to get into real estate.  Keep that property and when she goes to grad school, repeat the process.  You can get a property manager to look after house 1 after your daughter leaves. 

    I don't know where your daughter is planning on going to grad school, but I can tell you in Canada no grad school I know would cost close to that including living expenses.

    3Reply
  • Nathan Murith
    Investor · San Rafael · Member since 2020 · 376 posts · 274 votes
    4y

    @Bradley R Stillabower it's never too late! every property, even one, helps towards a better financial future regardless of age!

    2Reply
  • Scott E.
    Contractor · Scottsdale, AZ · Member since 2010 · 2k+ posts · 3k+ votes
    4y

    As others have said, it's not too late. Your goal of $50k-$100k in rental income in 5-8 years is a very lofty goal, but achievable if your are active in value-add deals.

    The multifamily market is still quite competitive around here but maybe different in your sub-market.

    I would start having conversations with local commercial real estate brokers who specialize in multi-family. Also meet with some credit unions to discuss financing these properties. And last meet with some property management companies. Lay out your goals with these people, and start to hone in on a region that you would like to target.

    1Reply
  • Steven Foster Wilson
    Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes
    4y
    Quote from @Bradley R Stillabower:

    The BP community seems to cater primarily to the "Young and the (financially) Restless" , but I'm a 55yo retired military and soon-to-be-retired federal employee (14 months), considering one final encore career for 5-8 more years before fully retiring.  Wondering if that is enough time to accumulate a portfolio of investment properties that will generate between $50k-$100k per year of income to (help) pay for may daughter's grad school (student loan debt is anathema to me), and then continue to augment our pension and stock portfolio throughout retirement and finally leave as inheritance.  My only real estate experience is the four primary residences we've bought/sold for ourselves over the past 25+ years, one of which we tried to keep and rent, (but not a good experience).  My research so far is leading me towards small multi-family properties as the most efficient path toward my goal.

    If I do pursue this, what is the best use of my time over this next year to educate and prepare?  A real estate license?   A BP boot camp?  Can I start with the Multi-family Boot Camp, or does it build on the Rookie Boot Camp?

    I think I've read most of the free BP content by now, and it's been a fantastic one-stop-shop of educational material.  The Multi-family webinar was a very tempting intro to the analysis tools, which, as a numbers/data guy, are really enlightening, and comforting to know those tools are available.

    Thank you,

    Brad


     Welcome, Bradley, 

    It is never too late. I am just now getting my parents into investing and they have already bought 3 units and are cash flowing. I think it is important to listen to as many podcasts from BP as possible. Here are a few of my favorite book recommendations "Million Dollar RE agent" by Gary Keller, "Million dollar investor," by Gary Keller, “Rich dad, Poor dad” by Robert T. Kiyosak , and "The Abcs of Commercial Real Estate Investing" by Ken McElroy. Go network, network, network! I would find a mentor who is doing what you want to do and start to learn from them. I try to ask a person I want to learn from to coffee every month if not more. Before you decide to get your license or any other way of getting into RE. I would write down your goals and then map out how you think you are going to get there. You have to know what you want and why. That has helped me over the years, when I start to go off track I have people that help point me back to my goals. 

    2Reply
  • Patrick DruryBusiness Member
    Real Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
    4y

    @Bradley R Stillabower
    I highly recommend you attend local meetups or join a local REIA near you so you can meet in person with local investors and network with them. Work on building your team of the core 4 even though you are local. A lot of investors that are local to where they invest try to either do it all or a good portion of management and maintenance. That just might not fit with your schedule, so outsource it. Also, I wouldn't pursue becoming an agent part-time. If you wanted to become one, its a full-time job. Don't get your license just to have it and have access to the MLS. It's not worth it unless you are selling real estate full-time and making money. The reason being it's not as simple as getting a license and holding it there a quite a couple of fees associated with being an agent.


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  • Account Closed
    PA · Member since 2010 · 339 posts · 168 votes
    4y

    I started 12 years ago when I was about 50 and have exceeded your goals. My kids went to the most expensive universities they could find and are debt-free. I still have my day job. Here are my thoughts: 

    Old people need to keep risk at a minimum, so I disagree with those who promote the zero money down or oven 20% down. I recommend keeping your LTV, which is the amount of money you put in divided by the bank's appraised value (not what you think it will sell for), at or below 50%. This obviously reduces your cashflows, but you will immediately have equity that can be passed on to the kids. Note: I've done enough for my kids and they earn a lot more money than I, so my goal is to spend my last penny on the day I die :)

    Pick a single investment strategy and stick with it. You will get things done faster and more cheaply if you do the same kind of thing over and over. For example, you might pick a strategy everyone calls BRRRRRRR where you would you would develop nice cashflows and create a lot of equity that can be passed on to the kids. I wouldn't refinance though. You'll lose your cashflows and leave the kids with the debt.

    GTG

    3Reply
  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    4y

    Most overprepare for retirement.  Hunting,  funding, rehabbing and operating RE is a lot of work with a steep learning curve. 

    If I didn't need it, I wouldn't do it.  I'd invest passively into something like REITS if I didn't need hands-on like you don't.   

    2Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    4y

    Good advice from Steve. Truth is to able to achieve good cash flow, is easy and direct ownership is not the only way.

    While BRRR method is possible to give a good high return, but there's hidden danger as this job is very stressful,much more stressful than easy 6 figures w2 job. The stress could trigger anxiety and heart attack.

    Best wisdom for older folks, prioritizing health first is number one.

    2Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    4y
    Quote from @Bradley R Stillabower:

    The best time to plant a tree was 20 years ago. The second best time is today. ~Chinese proverb

    There are markets where you can buy a single-family home for $150,000 and rent it for $1,500 a month. Pay it off and you'll have an extra $1,500 income per month for the rest of your life. Actually it will increase over time (expect rents to more than double in 20 years) so you'll never get behind.

    Buy four of those and you'll have $6,000 a month and be living large.

    Or you can say it's too late to get started and in 20 years you'll be kicking yourself for having wasted 20 years.

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  • Eliott Elias
    Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    4y

    Never! Buy 5 properties this year and build a foundation for generational wealth 

    0Reply
  • Bradley R Stillabower
    OP
    Member since 2022 · 25 posts · 8 votes
    4y
    Quote from @Theresa Harris:

    ---------

    You mention your daughter going to grad school.  Is she already in college/university?  If she is starting, buy a house or duplex in that town.  She can live in one room and you can rent out the other rooms. That covers her living expenses which is one of the main costs and allows you to get into real estate.  Keep that property and when she goes to grad school, repeat the process.  You can get a property manager to look after house 1 after your daughter leaves. 

    ------------

    Thanks for the feedback, that's exactly what I've been considering to get started.  She has one more year of undergrad, and then will probably work for a year or two before applying to grad school (Med School, so not cheap!).  So until we decide on a school, I won't know where to look.  So in the meantime, I may start looking for my first deal in my local market to get started.


    0Reply
  • Bradley R Stillabower
    OP
    Member since 2022 · 25 posts · 8 votes
    4y
    Quote from @Scott E.:

    As others have said, it's not too late. Your goal of $50k-$100k in rental income in 5-8 years is a very lofty goal, but achievable if your are active in value-add deals.

    The multifamily market is still quite competitive around here but maybe different in your sub-market.

    I would start having conversations with local commercial real estate brokers who specialize in multi-family. Also meet with some credit unions to discuss financing these properties. And last meet with some property management companies. Lay out your goals with these people, and start to hone in on a region that you would like to target.


     Great advice, thank you!

    1Reply
  • Bradley R Stillabower
    OP
    Member since 2022 · 25 posts · 8 votes
    4y
    Quote from @Patrick Drury:

    @Bradley R Stillabower
    I highly recommend you attend local meetups or join a local REIA near you so you can meet in person with local investors and network with them. Work on building your team of the core 4 even though you are local. A lot of investors that are local to where they invest try to either do it all or a good portion of management and maintenance. That just might not fit with your schedule, so outsource it. Also, I wouldn't pursue becoming an agent part-time. If you wanted to become one, its a full-time job. Don't get your license just to have it and have access to the MLS. It's not worth it unless you are selling real estate full-time and making money. The reason being it's not as simple as getting a license and holding it there a quite a couple of fees associated with being an agent.



     Thanks Patrick, good advice on the RE license.  I don't think being a practicing RE agent is right for me, but I'd like to be better educated on the technical mechanics of real estate before I start investing, and assumed that just taking the course would be worthwhile, even if I don't get my license afterwards.  What do you think?

    0Reply
  • Bradley R Stillabower
    OP
    Member since 2022 · 25 posts · 8 votes
    4y
    Quote from @Account Closed:

    I started 12 years ago when I was about 50 and have exceeded your goals. My kids went to the most expensive universities they could find and are debt-free. I still have my day job. Here are my thoughts: 

    Old people need to keep risk at a minimum, so I disagree with those who promote the zero money down or oven 20% down. I recommend keeping your LTV, which is the amount of money you put in divided by the bank's appraised value (not what you think it will sell for), at or below 50%. This obviously reduces your cashflows, but you will immediately have equity that can be passed on to the kids. Note: I've done enough for my kids and they earn a lot more money than I, so my goal is to spend my last penny on the day I die :)

    Pick a single investment strategy and stick with it. You will get things done faster and more cheaply if you do the same kind of thing over and over. For example, you might pick a strategy everyone calls BRRRRRRR where you would you would develop nice cashflows and create a lot of equity that can be passed on to the kids. I wouldn't refinance though. You'll lose your cashflows and leave the kids with the debt.

    GTG


     Thanks Blaise, encouraging feedback and great advice.  I share your key objectives: minimize risk, focus on a single strategy, "optimize" debt by balancing short/mid-term leverage with long term goal of debt-free cash flow.

    0Reply
  • Bradley R Stillabower
    OP
    Member since 2022 · 25 posts · 8 votes
    4y
    Quote from @Steve Vaughan:

    Most overprepare for retirement.  Hunting,  funding, rehabbing and operating RE is a lot of work with a steep learning curve. 

    If I didn't need it, I wouldn't do it.  I'd invest passively into something like REITS if I didn't need hands-on like you don't.   


     Thanks Steve, I'll definitely learn more about passive REITS investing before I get started, but the alternatives portion of my stock portfolio does already include some real estate with REITS holdings.

    0Reply
  • Account Closed
    PA · Member since 2010 · 339 posts · 168 votes
    4y
    Quote from @Bradley R Stillabower:
    Quote from @Theresa Harris:

    ---------

    You mention your daughter going to grad school.  Is she already in college/university?  If she is starting, buy a house or duplex in that town.  She can live in one room and you can rent out the other rooms. That covers her living expenses which is one of the main costs and allows you to get into real estate.  Keep that property and when she goes to grad school, repeat the process.  You can get a property manager to look after house 1 after your daughter leaves. 

    ------------

    Thanks for the feedback, that's exactly what I've been considering to get started.  She has one more year of undergrad, and then will probably work for a year or two before applying to grad school (Med School, so not cheap!).  So until we decide on a school, I won't know where to look.  So in the meantime, I may start looking for my first deal in my local market to get started.



     I'm a college of medicine professor. It's sad how much debt some of these kids have when they are done. You daughter is lucky that you are helping with it.

    1Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y

    You can do it....just get started soon, like now, or yesterday......don't wait any longer, I bought plenty of properties after age 55, still planning on more.

    0Reply
  • Bradley R Stillabower
    OP
    Member since 2022 · 25 posts · 8 votes
    4y

     Yes, this predatory college debt machine has become the pay-day lending bane of the middle class.

    0Reply
  • Bradley R Stillabower
    OP
    Member since 2022 · 25 posts · 8 votes
    4y
    Quote from @Nathan Gesner:
    Quote from @Bradley R Stillabower:

    --------------

    "There are markets where you can buy a single-family home for $150,000 and rent it for $1,500 a month. Pay it off and you'll have an extra $1,500 income per month for the rest of your life."

    -----------

     I'd rather buy a triplex for $150k and rent it for 3 x $700 = $2,100/mo.  Is that realistic?

    0Reply
  • Ned CareyPro Member
    Moderator
    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    4y
    Quote from @Bradley R Stillabower:

       I'd rather buy a triplex for $150k and rent it for 3 x $700 = $2,100/mo.  Is that realistic?


     It depends on your market. That is achievable in Baltimore but that would be a better than average deal.

    Colonel Sanders didn’t start Kentucky Fried Chicken until he was in his sixties. He started that with nothing but a good chicken recipe. So no you are not too old. 

    3Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y
    Quote from @Ned Carey:

    And Ray Kroc (McDonalds) didn't hit it big until about then as well.....I think he went bankrupt 3 times before hitting the big time.

    1Reply
  • Rob Bergeron
    Real Estate Agent · Louisville, KY · Member since 2017 · 1k+ posts · 1k+ votes
    4y

    Never too late! Go snag an airbnb!

    1Reply
  • Eric GoldmanBusiness Member
    Lender · PA · Member since 2019 · 359 posts · 192 votes
    4y

    never to late! get going!

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  • Sid Jones
    Richmond, TX · Member since 2018 · 29 posts · 31 votes
    4y

    Brad - 

    First, you have an admirable goal in trying to ensure that your daughter has a good start in life (without debt that is...)  You're not too old to get started.  And I agree with you - I wouldn't mind seeing BP make a space for old..... more senior investors :)

    You don't talk about what kind of equity you bring to the table, but there are 2 kinds:

    1. Money - this may be borrowing from your own savings or whatever cash you have on hand or can get.

    2. Sweat - how much work you and your family are willing to put in. I will note (I'm 52) that as we get older, our willingness to leverage #2 goes down. Your mileage may vary...

    To get a $50,000 annual income from your investments in 5-8 years, you need an after-tax 8% return on about $625,000 worth of equity. If, say, you've got some maturing stock or you're great savers, that means to hit the lower end of your goal, you could invest $100,000/year each year for the next 6 years into syndications - most will be returning 8% in rents to you and you've just achieved your goal almost entirely passively.

    If you don't have an extra $600,000 but have some money ($100,000?) then you have to make up the rest with sweat equity. You can buy, fix, and flip, you can buy at auction and flip or rent, you can BRRRR - these are the pretty well-worn paths to your goal and these forums have all the advice and experience you need to succeed.

    Two final notes:

    1. REALLY get to know your local market (or wherever you're investing). That will help you identify which strategy is going to be successful.  Local investor meetups and an agent who has experience working with investors are worth their weight in gold.

    2. This is your daughter's future too.  If at all possible, involve her in building that future. If she can search online and do accounting, do that. If she can sling a sander or a paint roller, do that. However you guys get there, make her a part of the solution so that she can walk away with the skills to keep her family independent for the rest of her life.

    Good luck! 

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