Introduction and situation

[Raylene Pranich]

Hello! I'm new to bigger pockets and looking forward to listening and learning as time goes on!

A bit about myself and my family's situation-- I'm married to my husband of 4 years, and have two boys (2 years old and a two month old!)

My husband and I own our home free and clear, here in Fresno. We partnered with a friend out in TX on a STR as our foot in the door to learn about real estate and have him hold our hand through this process, to learn from him. We are ready to start our own adventure with real estate, and are eager to get started! It's just how...

Our goal is retirement-- so being in it for the long run and hopefully gain a door every 1 to 2 years. Being that we have a young growing family, I'm trying to figure out what the best direction it is to head in. I think our best course of action would be to invest on MTR or LTR, but is that market here in town so we can self manage? Or is looking for a market in a different state better? So many questions haha.

Anyways, thank you for reading, and looking forward to learning more!

[Kevin Sobilo]

@Raylene Pranich, congrats on getting started! A few thoughts:

1. I always think new investors should start with a self evaluation! People who are going to invest ACTIVELY will by default have a role(s) in the investment business. Understanding what role(s) you have the skills for, desire to do, time for, etc help you make some of the other decisions you are thinking about. 

So, I consider this sort of thinking to be foundational aka important to happen early on, so that you can build upon it. 

2. What are you looking to invest? You mention that you have a lot of equity in your home. Do you plan to do a cash-out refi or HELOC and put all of that equity to work? Or maybe you aren't comfortable with that risk. Or do you plan to invest more time and effort making deals happen?

This is still sort of related to the self assessment. Some people just have capital they want to deploy and lightly manage things while others want to work and become deeply involved in potentially more lucrative deals like BRRRRs that can yield substantially more return for the money invested BUT require SIGNIFICANTLY more time and effort committed. 

3. I think starting with foundational questions like that will start to narrow your focus. 

For example, maybe you don't have the time or inclination to get deeply involved in BRRRR type rehabs and dealing with learning how to buy severely distressed properties. Maybe you want to just manage nicer buy & hold rentals in your local market.

In that case, you might cash-out refi and use that money as down payments on 5 local properties over the next couple years with mortgages. Maybe they cash-flow $0 but pay their bills and maintenance etc because you are in an expensive market. 

Let's assume you start with $500k and buy $2.5 million in real estate with loans. After 30 years assuming 3% market appreciation you would have about $6 million in paid off houses where you could sell, invest passively and enjoy a retirement. 

Maybe for you that sounds good, for others they may want to get down and dirty and make faster returns and more growth through their efforts.