Newbie from San Antonio, TX

11 Replies

Hello!

My wife, two kids, and I moved here from Colorado about three years ago, chasing the oilfield.  Prior to that, I owned my own, and then later ran a framing company, building 6k+ sqft homes.  I have been involved in building houses my entire life.  Even when I was a kid, we lived on the jobsite in a trailer.  (Dad owned his company for 22 years.)

I've never known what I wanted to do, "when I grew up".  I've floated from job to job, doing whatever caught my interest.  The oilfield pays great, but I'm starting to get sick of it after seven years, and don't fancy looking back at "30 years in the patch".

Everywhere I read, says to get involved in something your good at, and passionate about.  I would look at my hobbies, and while fun, weren't something I'd care to make a living at.  Especially when doing your hobby as a job, is the quickest way to ruin your love of that hobby.

Then, it hit me!  Why not go back to houses?  I told my wife I'd never go back to full-time framing.  The market is too cut-throat, and it's almost impossible to stay afloat, and be competitive, when you're doing it legally.  But she always talks about how she likes fixing up houses, and it is something we're good at.  In fact, when I started my business, she was my employee.  She's a tough, stick with it, kind of girl.

I'm not sure what to do next.  My schedule is two weeks on, one week off.  I have fifty grand in the bank right now.  I will net almost 200k this year, and my credit rating is a meh, 650ish.  Do I finance several houses at once? (assuming I can get the loans.)  Do I flip them?  Do I rent them?  I need some kind of starting point.

My worry is that I'm sitting here making good money, but not enough to matter by the time I'm too wore out to work anymore.  I don't want to be broke down and broke at 75.  I'm only 34 right now, and I'm sick of worrying about the future.  My vision is buy a few houses, flip them, always investing right back into the business, until I make enough to continue doing that, and quit my job.  Then, let it snowball into a larger and larger business.  Start a firm, buy a firm, merge with firms....Aim big, right?

I have a very strong background in construction.  I have a substantial income at the moment.  I have 50k in the bank.  HELP ME, PEOPLE!

P.S.  Glad to be here. :)

Howdy William and welcome to bigger pockets. Hopefully if you are making 200k, you are going to be living on 100k or less!! The absolute worst thing that you can do is make a bunch of money and quickly create bills for yourself so that you can not afford to make less money. That would mean that you are stuck.

Making that kind of money, your credit should be 800+. 

My suggestion is to continue to learn about RE here on the site and network with some of the investors here in San Antonio. At the same time, get bills off, auto paid off, dont get into more debt. Then you will not only have some cash on hand, but also you will have no debt which the bank will love.

Suggest you read "The Millionaire Real Estate Investor" written by Gary Keller of Keller Williams.  Become a student, learn as much as you can, decide on your target market and develop a strategy before blindly jumping in.

Originally posted by @Donald Fetzer :

Suggest you read "The Millionaire Real Estate Investor" written by Gary Keller of Keller Williams.  Become a student, learn as much as you can, decide on your target market and develop a strategy before blindly jumping in.

Game Changer! These 5 Books had the BIGGEST Impact and the Most Immediately Actionable Take-Aways for me in 2015. God Bless and Enjoy This Great Adventure! MAN I LOVE WHOLESALING!!! BAM!

1. The Four Spiritual Laws of Prosperity: A Simple Guide to Unlimited Abundance by: Edwene Gaines

2. The Millionaire Real Estate Investor by: Gary Keller and Dave Jenks

3. The ONE Thing: The Surprisingly Simple Truth Behind Extraordinary Results by: Gary Keller and Jay Papasan

4. Profit First: A Simple System to Transform Any Business from a Cash-Eating Monster to a Money-Making Machine by: Mike Michalowicz

5. The 10X Rule: The Only Difference Between Success and Failure by: Grant Cardone

Thanks for the replies, guys.  I'll order those books today.

My overhead is about 2500.00 per month.  Maybe less.  Just normal bills.  Everything I have is paid for.  My credit score is low, because I never knew as a kid, that you could destroy it so easy and it would be such a pain to rebuild.  Then, I started making enough money that I didn't see the point in credit, when I could just pay cash for everything.

After I got out of the Marines, I lost my steady paycheck, and my truck got repo'd.  After that, I realized that if you're making payments, your stuff could get taken away if something bad happens.  So after that, I never financed another thing, unless you count renting a house.

Now, I feel I've pretty much bought everything that I want, and my money is just stagnating in the bank.  Seems to me, I could put it to use.

Thanks, all.

@William Hall welcome and great that you are jumping in. A couple of thoughts. Paying only cash doesn't lead to a 650 credit score. You need to figure out exactly why it is that and fix it. You need to be 720 plus to get good loans. If you don't the cost of money will significantly eat up your profit. First item of business is to get that fixed. If you have credit cards, get one with a small limit and charge a few things and pay them off each month.

With your work schedule, I would consider a live in flip if your wife will go along with that. With that kind of situation, if nothing happens for two weeks while you are away at work, then it's not the same as having folks working on a flip with no supervision. 

Originally posted by @Bill S. :

@William Hall welcome and great that you are jumping in. A couple of thoughts. Paying only cash doesn't lead to a 650 credit score. You need to figure out exactly why it is that and fix it. You need to be 720 plus to get good loans. If you don't the cost of money will significantly eat up your profit. First item of business is to get that fixed. If you have credit cards, get one with a small limit and charge a few things and pay them off each month.

With your work schedule, I would consider a live in flip if your wife will go along with that. With that kind of situation, if nothing happens for two weeks while you are away at work, then it's not the same as having folks working on a flip with no supervision. 

 Excellent advice as living in the home will accomplish your shelter goal and not put time pressure on you to sell right away. You're in a good market so taking your time on this first flip will pay dividends down the road. I do appreciate your time in the framing business but flipping is about the way the home appeals to the market externally, not how well the studs are set. Knowing what finishes make a house "Pop" is an art unto itself and well worth learning.

Originally posted by @Bill S. :

@William Hall welcome and great that you are jumping in. A couple of thoughts. Paying only cash doesn't lead to a 650 credit score. You need to figure out exactly why it is that and fix it. You need to be 720 plus to get good loans. If you don't the cost of money will significantly eat up your profit. First item of business is to get that fixed. If you have credit cards, get one with a small limit and charge a few things and pay them off each month.

With your work schedule, I would consider a live in flip if your wife will go along with that. With that kind of situation, if nothing happens for two weeks while you are away at work, then it's not the same as having folks working on a flip with no supervision. 

I have paid everything off except student loans.  I've had a credit card for almost three years, that I pay in full monthly.  It seems to be working.  My score used to be much lower.

With a "live in flip", what happens when someone buys the house?  You start looking for a new place to live, and hope it happens before you're sleeping under a bridge?  Are you always cutting it close, or is it smoother than I imagine?  Because one house payment at a time, when I get started, will surely be easier to manage.  Depending on how crazy work is, I bring home between ten and twenty thousand per month.  I've thought about paying off my student loans, but it seems like the more money I put in the bank, the more paranoid I get about spending it.

Thanks for the advice, guys.

@William Hall when you sell a live-in flip there is some stress. If you are careful you, can manage the transition. It's just part of what needs to be done for growth in real estate. You need to get with a knowledgeable mortgage broker that can provide some direction as to whether to save your cash or pay down your student loan debt.

One way to manage the transition is to refi your first home so you have cash for downpayment on the 2nd home. Hopefully you qualify for both mortgages at that point. You then buy your next flip and move there. You spruce up the old home, stage it and sell it. There is risk of two mortgages but with proper margins it's doable.

The other way is to put the first house up for sale and shop for the second property. When it's under contract, you tie down your next property and work out the closings so that you load the moving truck one day, close on both properties back to back and then move into the second property. Stuff can go wrong but usually it doesn't. Mind your p's and q's and you can make it happen.

BTW no one said this business was easy but walking away with $50-$100K tax free is not a bad payday. 

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