Hello, Fellow Investors! I'm Ready to Make Some Money!
Investor · Potomac, MD · Member since 2015 · 39 posts · 8 votes
My name is Johanna Anderson, and I live in the Maryland suburbs of Washington, DC. I am excited about getting involved in real estate investing, because I have always enjoyed negotiation, and I think that investing is a good fit for my personality.
My goal is to do some wholesale deals first to generate cash, then consider doing a "buy and hold" rental property that doesn't need tons of rehab. When I start to accumulate rental homes, I will definitely want to employ a property manager, lol!
I am interested in buying properties anywhere in Maryland and possibly elsewhere, and I'll consider any property with a potential for profit.
I see real estate investing as a level playing field for anyone who wants to make money. I'm a hard worker, I'm thorough and conscientious, and I want to help create win-win situations every day! I love the idea that I can help other people and earn great money, too!
I'll be upgrading to Pro membership soon, and I will definitely be posting deals to look for CASH BUYERS.
All the best to everyone,
Johanna Anderson
I think your business model is right where it should be. Wholesale to build some capital and then do buy and hold when you can.
The true value in investing in real estate is thru buy and hold versus flipping.
If you compare the ways you make money and the risks, here is how the two options play out. And technically some people will point out that there are more than those two ways to make money in investing but those are the two that tend to be done the most.
1) Flipping. Quicker way to get bigger profits. Taxed at a higher rate. And when you stop flipping, you have zero income coming in. The only way you make money is if you keep flipping. There are no other long term income gains from flipping. Whatever you make off the sale is it. And the risk is that you can lose money flipping a house.
2) Buy and hold. Takes longer to get large profits. You're adding 200 to 400 a month in net profit per months for every house you buy. But that income is typically completely tax free for most of the first 10 or so years.
The real value in buy and hold though is the combination of benefits. i.e:
1) Rental Profits
2) Principal paydown. You might only be making 200 to 300 a month in rental profits, but you are likely paying down a mortgage at 100 to 200 a month as well.
3) Appreciation. Whats nice about appreciation is that it hits against the entire value of the home and not your investment portion. So if you get a 150k house for 120k and put down 24k, the appreciation (typically 2 to 3% in most areas), you're appreciation is not occurring on 3% of 24k. You're gaining 2 to 3% of 150k - or another 3 to 4k a year in appreciation.
4) Equity capture. Yet another one that gets left off. But when you're really investing, you're buying a 150k for a discount. So you're walking in to 30 to 40k in equity right off the bat. Now, that doesn't really equate to a profit as the only way to get that money out completely would be to sell and a sale incurs expenses (i.e. realtor fees, etc). But from a net worth standpoint, you made 30 to 40k.
Imagine going to your stock broker and asking to buy 100k of Google stock but that you wanted to get that for 75k. That just isn't happening. You're paying 100k plus the fees.
So stick with your plan and I would definitely recommend buy and hold as a strategy. For me, it'll always come back to the one absolute fact - buy and hold investing is one of the few opportunities out there where us regular people can build some real wealth.
I think your business model is right where it should be. Wholesale to build some capital and then do buy and hold when you can.
The true value in investing in real estate is thru buy and hold versus flipping.
If you compare the ways you make money and the risks, here is how the two options play out. And technically some people will point out that there are more than those two ways to make money in investing but those are the two that tend to be done the most.
1) Flipping. Quicker way to get bigger profits. Taxed at a higher rate. And when you stop flipping, you have zero income coming in. The only way you make money is if you keep flipping. There are no other long term income gains from flipping. Whatever you make off the sale is it. And the risk is that you can lose money flipping a house.
2) Buy and hold. Takes longer to get large profits. You're adding 200 to 400 a month in net profit per months for every house you buy. But that income is typically completely tax free for most of the first 10 or so years.
The real value in buy and hold though is the combination of benefits. i.e:
1) Rental Profits
2) Principal paydown. You might only be making 200 to 300 a month in rental profits, but you are likely paying down a mortgage at 100 to 200 a month as well.
3) Appreciation. Whats nice about appreciation is that it hits against the entire value of the home and not your investment portion. So if you get a 150k house for 120k and put down 24k, the appreciation (typically 2 to 3% in most areas), you're appreciation is not occurring on 3% of 24k. You're gaining 2 to 3% of 150k - or another 3 to 4k a year in appreciation.
4) Equity capture. Yet another one that gets left off. But when you're really investing, you're buying a 150k for a discount. So you're walking in to 30 to 40k in equity right off the bat. Now, that doesn't really equate to a profit as the only way to get that money out completely would be to sell and a sale incurs expenses (i.e. realtor fees, etc). But from a net worth standpoint, you made 30 to 40k.
Imagine going to your stock broker and asking to buy 100k of Google stock but that you wanted to get that for 75k. That just isn't happening. You're paying 100k plus the fees.
So stick with your plan and I would definitely recommend buy and hold as a strategy. For me, it'll always come back to the one absolute fact - buy and hold investing is one of the few opportunities out there where us regular people can build some real wealth.
Hi and welcome to BiggerPockets! It’s a great place to learn more about investing and meet the people you want to meet. If you haven't yet, be sure to check out the The Ultimate Beginner's Guide to Real Estate Investing and don't forget to set up your Keyword Alerts!
Welcome to BP @Johanna Anderson
Hi and welcome to BiggerPockets! It’s a great place to learn more about investing and meet the people you want to meet. If you haven't yet, be sure to check out the The Ultimate Beginner's Guide to Real Estate Investing and don't forget to set up your Keyword Alerts!
Thanks, Larry. My dilemma: I need to make some money as an investor first, and then I will have the luxury of studying how it's done! Actually, I have taken a wholesaling course. But no kidding, I need money, like, RIGHT NOW. I will find a way.
Thank you, Chaz! Would you be a colleague of mine? I'm not sure yet of how to officially ask. I don't see any buttons to push.
Johanna
Welcome Johanna
As you already probably know, here is plenty of information and good people to connect with
Try to read as much as possible and try to attend some of the investor meetings
There is a very good one close to you, I believe they meet once a month in the Bethesda Womans Club, plus there are some others in Tyson's Corner and Downtown DC
My advice to be taken seriously as wholesaler is to understand very well the numbers your investor buyer needs, and present only reasonable opportunities, your ARV has to be realistic using real and relevant comps (close in distance, close in time and close in characteristics) and the spread must be enough for him to pay: interest, rehab costs, realtor commissions, etc and still make a decent profit selling quickly. The moment you offer a business with wrong numbers and wrong diagnostic of the property you are loosing a client immediately, remember they had been doing this for long time and if they are new you will contribute for them to get broke and probably that will affect your reputation as wholesaler
I hope you the best
Nereo Mendoza
PD: Please let me know if you come across something in Kensington
Welcome Johanna
As you already probably know, here is plenty of information and good people to connect with
Try to read as much as possible and try to attend some of the investor meetings
There is a very good one close to you, I believe they meet once a month in the Bethesda Womans Club, plus there are some others in Tyson's Corner and Downtown DC
My advice to be taken seriously as wholesaler is to understand very well the numbers your investor buyer needs, and present only reasonable opportunities, your ARV has to be realistic using real and relevant comps (close in distance, close in time and close in characteristics) and the spread must be enough for him to pay: interest, rehab costs, realtor commissions, etc and still make a decent profit selling quickly. The moment you offer a business with wrong numbers and wrong diagnostic of the property you are loosing a client immediately, remember they had been doing this for long time and if they are new you will contribute for them to get broke and probably that will affect your reputation as wholesaler
I hope you the best
Nereo Mendoza
PD: Please let me know if you come across something in Kensington
My name is Johanna Anderson, and I live in the Maryland suburbs of Washington, DC. I am excited about getting involved in real estate investing, because I have always enjoyed negotiation, and I think that investing is a good fit for my personality.
My goal is to do some wholesale deals first to generate cash, then consider doing a "buy and hold" rental property that doesn't need tons of rehab. When I start to accumulate rental homes, I will definitely want to employ a property manager, lol!
I am interested in buying properties anywhere in Maryland and possibly elsewhere, and I'll consider any property with a potential for profit.
I see real estate investing as a level playing field for anyone who wants to make money. I'm a hard worker, I'm thorough and conscientious, and I want to help create win-win situations every day! I love the idea that I can help other people and earn great money, too!
I'll be upgrading to Pro membership soon, and I will definitely be posting deals to look for CASH BUYERS.
All the best to everyone,
Johanna Anderson
Welcome to Bigger Pockets! I commend your determination! Happy Investing!
Hey @Johanna Anderson welcome to BiggerPockets! You've definitely come to the right place to learn more about investing. If you haven't yet, be sure to check out the The Ultimate Beginner's Guide to Real Estate Investing and The BiggerPockets Podcast. They are both great at learning the fundamentals.
Also - here's a couple articles you might enjoy:
The 21 Best Real Estate Investing Books Ever
How to Rent Your House: The Definitive Step by Step Guide
How to Be a Landlord: Ten Tips for Success
Oh - and don't forget to set up your Keyword Alerts!
See you around the site!
Welcome! As you can tell you are getting some great advice right out of the gate.
is 100% correct there are some great investor meeting near you. There are also some you may want to visit in further locations to know what is going on in the entire metro area. Part of knowing your numbers and understanding your market is knowing how it compares to other areas and understanding how these areas may affect what you're doing.
So far you've gotten nothing but great advice. Check out the guide, talk to everyone you run into and enjoy what you're doing. You have an outstanding business plan and appear to have a wonderful personality.
I wish you all the best and success!