Cash Flow Taste - Rental Income! How do you start acquiring Buy & Hold with little down?

16 Replies

Hi All,

I have a little cash and a 12 year goal to retirement.  Once I spend my cash on my first cash flowing home (plex) it will take me a few years to save enough to buy another.  Am I missing something?  I can't see the finish line from here?

Hello

I was in the same place 20 years ago. So I found a partner and we bought two house on one property  with a little cash flow. We save our money and a  year later we where able to by a second property.  Our goal was one property a year. By having a partner we both learned how to take care of the rentals and learned how to fix everything our self. Sometimes it helps to have two minds trying to figure how to fix thing since we didn't have youtube. 

Tommy  

@Andy V.   My plan is to be in the market for a new property every 6 months...

1) Buy below market value and fix it up (most homes below market require work).

2) Get it rented (and cash flowing)

3) Let it season for 6 months (some lenders might require more or less time)

4) Refinance with cash out (if you bought it low enough, and it appraises high enough,  you should be able to get enough cash out for your next down payment)

5) start again at step 1

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@Tim Lindstrom & @Tommy Sowell  

I appreciate your responses.  Being in California local real estate is not an option for me with my budget.  I am looking into the Atlanta, GA area and a few others out that way.  If i buy a fixer I need to find a dependable way to renovate and get it rent ready.  Have you had any luck buying out of your areas?

Hi Larry,

Are you buying them at market or under?  If under how much and who do you work with. They say you make your money on the buy side but most of hat I have seen is close on market. They still cash flow but do not seem to have any equity but I could be wrong. 

@Andy V.  I live in Douglasville.  About 35 minutes from Atlanta.   Atlanta is a very tricky market, and most of the properties that seem like deals are in areas I wouldn't drive through after dark.  Without having someone you trust on the ground,  you could end up with a cash draining property. 

Anything on the MLS that is cheap in Atlanta, is usually not worth buying. This is just my two cents. The good ones get scooped up very quick.

I have been looking for properties in Douglasville, for 4 months, and am about to give up on the MLS. I need to find a good wholesaler, or start my own marketing campaign.

Out here there are a few "turnkey" guys that seem to have decent reviews like Jason Hartman and Real Wealth Network But They Seem Like They Get Their Houses From He Same provider And I Don't think There Is Any Equity At close, Just Cash Flow. After talking with a a rep they don't seem to have a good grip on area but just recommended Houses that were higher priced even though they list much cheaper homes.  

@Andy V.

Those companies you mentioned are NOT TK providers but more of an affiliate marketing company that advertises TK providers homes in several cities around the country for hefty fees.  Homes are usually sold for market value.  

Hope that clarifies for you.

@Andy V.  

I have purchased my 20 rental homes using a hard money strategy.  Nothing down up front but I did have to pay monthly interest only and and appraisal for each home.  Here is a YouTube video I did explaining exactly how I did it.   You wont find any companies doing this anymore as its too difficult but you could do it yourself possibly. 

Good luck

Hello

I started out in San Diego which is very expensive but it was need just to learn. I think you could find deals within a couple of hour from where you live. That way you can drive there on your days off if you need too. If you buy out of state a bad property manager will end your dreams. I only bought in San Diego for many years before buy out of state.

Tommy

That is true @Tommy Sowell. I'm not sure which I'm more afraid of, California landlord/tenant law or out of state management. Tough call. I do like the idea of being able to do a drive by if need be. 

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I get what your saying Andy, Im ready to pull the trigger on my first buy and hold but would feel a bit safer if it was within driving distance. Im aware that many folks buy out of state but I feel that they are somewhat seasoned pros (atleast to my rookie eyes).

Originally posted by @Andy V. :

Hi All,

I have a little cash and a 12 year goal to retirement.  Once I spend my cash on my first cash flowing home (plex) it will take me a few years to save enough to buy another.  Am I missing something?  I can't see the finish line from here?

Hi Andy,

I had the same issue when I first moved to the US.

$20k in my pocket and could only buy half a house haha.

Eventually it lead me to flipping and now owning a turnkey company.

I would suggest buying run down properties, fixing them and up and selling. As lump sums become available, stick it into a buy and hold.

Consider doing JV's also.

Sorry but I don't know any other way than fix and flip lol, when I initially started building my portfolio in Australia I slaved away as a laborer and saved up $40k in cash which enabled me to buy fix, refinance and do it again.

It was a recipe for disaster but I think that this can be a powerful strategy also if after refinancing the income still covers all expenses and some...

Just my opinion.

Thanks and have a great day.

Thank you Tom, Rob and Engelo all excellent input to my problem at hand. I really appreciate you all taking the time to respond and in some cases multiple times. It's really nice to be able to put a question out there and have seasoned guys help out!

Hi @Andy V.  - @Curt Davis  made a good distinction and we do operate both ways, as turnkey providers and as a referral network. It just depends on the property as sometimes we finance the acquisition and rehab too. Let us know if you have any questions, thanks and happy investing!  

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