How to get started as a buy and hold investor

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How to get started as a buy and hold investor

Matt Anton
Rental Property Investor · Fort Collins, CO · Member since 2015 · 10 posts · 3 votes

Hello folks,

My name is Matt and I have been interested in real estate for many years. I even worked as a licensed Realtor in PA for a couple years in my mid-twenties. I'm now a CO lifer and can't believe the market in the metro areas of the CO front range. It is time for me to take the equity in my home, or some IRA $, and buy my first rental property so that I can start my RE portfolio.

What I have a hard time rapping my head around is finding a property in this super hot market with #'s that work out.  I've scoured the foreclosure listings for my county, and other online sources, and don't seem to get how to turn these listings into offers and ultimately close a deal.  What system can I use, instead of inventing my own, to organize myself to get to the closing table?    

If there is anyone out there who would be willing to mentor me, or just give me some guidance, so I can get from analysis paralysis to a closed deal, I would really appreciate it.  I understand the basics, have read countless books and blogs, but just can't seem to get past myself to get going. 

Thanks for reading!  

Matt

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Patricia Miller
Durango, CO · Member since 2016 · 92 posts · 12 votes
10y

Hello @Matt Anton, I have been in your shoes now for 5 months. Like you, I am determined to find buy-and-hold properties in the Denver area. I think what I am realizing is that although determination and hard work will often lead to success, no amount of either one of those can change the market conditions in a particular local. Not only are market conditions formidable - but there is no shortage of people willing to pay waaaaay above asking price for properties as they come on the market. I'm wondering where those folks are going to be in a year. The duplexes are the biggest head-scratchers. How can you pay upwards of $500K for a duplex that might rent each unit for $1500 (or less) and keep your head above water?? I'm sure there are deals out there and the more clever (and connected) among us will scoop those up faster than you can say jackrabbit. But giving up will not lead to anything - so keep going and stay smart! (I need to listen to my own advice, as well).

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  • Jack Butala
    Los Angeles, CA · Member since 2014 · 2k+ posts · 515 votes
    10y

    Hello @Matt Anton and let me be the first member to welcome you to Bigger Pockets. BP has tons of information, including free online videos and educational courses. BP even has it's own podcast in itunes and let's you post blogs and share ideas with others. You came to the right place and I wish you all the best. 

    0Reply
  • Dave VisayaPro Member
    Moderator
    Audio Engineer and Investor · Cebu City, Cebu · Member since 2013 · 7k+ posts · 881 votes
    10y

    Hey @Matt Anton, welcome to BiggerPockets! Definitely start jumping into the community here and feel free to ask any questions related to Real Estate investing!

    BiggerPockets
    0Reply
  • Matt Anton
    OP
    Rental Property Investor · Fort Collins, CO · Member since 2015 · 10 posts · 3 votes
    10y

    Thanks @Dave Visaya and @Steven Butala for the warm welcome!  I look forward learning more, starting with a Podcast tonight on Bigger Pockets.     

    0Reply
  • Jay Leisten
    Real Estate Broker · Louisville, KY · Member since 2014 · 362 posts · 232 votes
    10y
    Welcome aboard Matt Anton I'm sure you'll be getting some good feedback shortly. I'm going to follow this post.
    0Reply
  • Matt Anton
    OP
    Rental Property Investor · Fort Collins, CO · Member since 2015 · 10 posts · 3 votes
    10y

    Great webinar last night "How to Buy Your First (or Next) Rental Property in 90 Days or less", going through it again today!  Very motivating...and gave me a great "Blueprint" of how to get going after years of "Dead Space".  I've been motivated to get into buy-and-hold investing for a long time and always find ways to procrastinate and find excusing why (I can't do this/I don't have the money/I can't find properties with the right #'s).  I appreciate your support too @Jay Leisten.  *I WILL BUY MY FIRST PROPERTY THIS WINTER IN TIME FOR RENTAL SEASON THIS SPRING*  

    2Reply
  • Jay Leisten
    Real Estate Broker · Louisville, KY · Member since 2014 · 362 posts · 232 votes
    10y
    Matt Anton that was a great webinar. I think it was a perfect kickstart for me as well. I'm trying to do all cash deals so I may need to search for joint venture partners to dynamite the log jam.
    0Reply
  • Ali Boone
    Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
    10y

    Well the good news is....it's not you. It's the market. Colorado hasn't really been conducive to positive returns for a while now. I'm in LA and it's similar here (although at least we have the appreciation potential out here). Most people I know in CA buy out-of-state in markets where the numbers do work out. Similar issue for CO.

    There may be a deal here and there, but it will probably be really tough to find. People have been in a scramble over CO properties, especially around Denver, so it's made it very competitive and driven the prices up. Rents there typically don't support the property price.

    0Reply
  • Chet Mostue
    Real Estate Agent · Littleton, CO · Member since 2016 · 41 posts · 9 votes
    10y

    Hey Matt,  have you thought about another market? we just sold a rental in Arvada, we wanted to get out now due to tax implications I had lived in it 2 of the last five years, and I really didn't want to do a 1031 exchange.  I would have to purchased something of equal value or higher to do that. We are looking in KC and found some good people out there to manage our rental, when we find one.  We can move back into this market as the step up for a 1031 later.  Have you thought about renting out your current home and move a little ways out of town?  a USDA loan for owner occupy is 100% anyway just some thoughts.  good luck!

    0Reply
  • Rolanda Eldridge
    Investor/Realtor · Hoover, AL · Member since 2010 · 1k+ posts · 459 votes
    10y

    Welcome to BP!  Definitely consider other markets, unless you find a great deal...

    0Reply
  • Matt Anton
    OP
    Rental Property Investor · Fort Collins, CO · Member since 2015 · 10 posts · 3 votes
    10y

    The market IS tight along the CO front range.  We purchased a single family as a primary residence 15 months ago and it has appreciated about 20% and I expect things to continue, maybe at a little slower pace, for a few more years.  Should I take appreciation into account, or just look at cash flow?  As mentioned, my goal is buy-and-hold properties with good cash flow. So I'm open to expanding my horizons if I need to.

    I planned to keep running numbers until I find something locally.  One trick that might make the numbers work is to find properties with the potential to add a second unit (basement, attic, outbuilding).  What about pre-foreclosure properties?  If I keep at I figure I might find something with this approach.   

    For folks suggesting purchasing out-of-state - how much added stress does this add to the process?  What are markets I should be considering?

    Thanks for all you support everyone!

    0Reply
  • Patricia Miller
    Durango, CO · Member since 2016 · 92 posts · 12 votes
    10y

    Hello @Matt Anton, I have been in your shoes now for 5 months. Like you, I am determined to find buy-and-hold properties in the Denver area. I think what I am realizing is that although determination and hard work will often lead to success, no amount of either one of those can change the market conditions in a particular local. Not only are market conditions formidable - but there is no shortage of people willing to pay waaaaay above asking price for properties as they come on the market. I'm wondering where those folks are going to be in a year. The duplexes are the biggest head-scratchers. How can you pay upwards of $500K for a duplex that might rent each unit for $1500 (or less) and keep your head above water?? I'm sure there are deals out there and the more clever (and connected) among us will scoop those up faster than you can say jackrabbit. But giving up will not lead to anything - so keep going and stay smart! (I need to listen to my own advice, as well).

    2Reply
  • Robert Herrera
    Investor · Denver, CO · Member since 2015 · 492 posts · 267 votes
    10y
    Matt Anton Patricia Miller Denver market is hot. Problem is most people are selling to buyers looking for a primary residence. Not to investors looking to cashflow. I'm actually selling my house to investors because they are the only ones who can buy it while there are tenants in it. I'm selling for $225k. It's rented long term at $1,900/month. Mortgage Would be around $1,000-$1,100/month including insurance and taxes. Tenants pay all utilities and do all repairs and maintenance.
    0Reply
  • Robert Herrera
    Investor · Denver, CO · Member since 2015 · 492 posts · 267 votes
    10y
    I'll be posting it on the market place as well here
    0Reply
  • Matt Anton
    OP
    Rental Property Investor · Fort Collins, CO · Member since 2015 · 10 posts · 3 votes
    10y

    @Patricia Miller @Rolanda Eldridge @Ali Boone @Chet Mostue

    After researching out-of-state opportunities a bit more I am realizing this may the best path for me to pursue.  It seems like this has been the strategy for many CA investors for years.  @Chet Mostue - KC seems like a great city to invest in, if you find the right deal in the right neighborhood.  What made you choose KC over other quality out-of-state markets (i.e. - Indie, Cleveland, Tampa, etc.)?  Do you mind sharing your property management contact?  Are you looking for a turn-key or will you try to pull together a team to rehab for you?  Do you have any other resources I might want to check out as I'm researching KC opportunities?  

    0Reply
  • Matt R.
    Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
    10y
    Originally posted by @Matt Anton:

    @Patricia Miller @Rolanda Eldridge @Ali Boone @Chet Mostue

    After researching out-of-state opportunities a bit more I am realizing this may the best path for me to pursue.  It seems like this has been the strategy for many CA investors for years.  @Chet Mostue - KC seems like a great city to invest in, if you find the right deal in the right neighborhood.  What made you choose KC over other quality out-of-state markets (i.e. - Indie, Cleveland, Tampa, etc.)?  Do you mind sharing your property management contact?  Are you looking for a turn-key or will you try to pull together a team to rehab for you?  Do you have any other resources I might want to check out as I'm researching KC opportunities?  

     Welcome to BP. There are fundamental reasons why CO is in more demand than average. Usually that transfers to being more profitable than average ie your 20% gains. It is a big state and I am sure if you wanted to stay more local there are places that work any combination of numbers one might seek. CO has low property taxes too. There are many in CA who look outside the state as mentioned but I think the vast majority of CA investors overall stay in state for the known historical profits. Or the most experienced local CA investors don't bail the world's 6th-7th largest economy growing at 4% in mass let's say.

     The advantages of being local should not be overlooked and the disadvantages of being far away should not be overlooked.  Just because it is cheaper and initial cash flow on paper appears like it is higher that does not mean it is a better RE investment necessarily. Will KC out perform Denver? My guess is not in your lifetime.  Good luck with your search!

    1Reply
  • Matt Anton
    OP
    Rental Property Investor · Fort Collins, CO · Member since 2015 · 10 posts · 3 votes
    10y

    @Matt R. - Thanks for chiming in.  The problem in CO that I am finding again and again are properties with terrible numbers, even if they are in need of major rehab.  I am also not able to invest the type of down money necessary to buy better homes in better markets in CO even if the numbers do work.  There are towns in CO with cash flow opportunities but they are in rural areas, or in D/F neighborhoods of Denver/Colorado Springs.  I'm a little worried about buying in rural areas due to, what I would guess will be, much higher vacancy rates and a lack of appreciation.  Although, prices along the front range of CO are appreciating like crazy the rural areas have not.  My focus is on finding B class properties with cash flow and slow and steady appreciation.  CO will give me the appreciation if I'm in the right location, but I've struggled to find any properties.  

    I will definitely continue looking in CO and have joined a local investment club, because I would like to ideally invest at home.  On the other hand folks on BP have me thinking about the opportunities out-of-state.  KC is a reasonable drive to make a couple times a year and seems like a solid market with great cash flow opps.  Again thanks for chiming in, I really appreciate your perspective.  What did you have to do to find investable properties in CA?  

    0Reply
  • Account Closed
    Rental Property Investor · Denver, CO · Member since 2015 · 109 posts · 34 votes
    10y

    @Matt Anton It sounds to me like you're having trouble locating good deals, whether on or off market. What are your primary strategies for lead generation? (Direct mail, craigslist, etc...?)

    I'm currently putting together a few lead generation systems to find the best off/on market deals I can find for the lowest price pssible. If you're still having trouble I would love to be of service to in finding the deals that work for you.

    Same goes for you as well @Patricia Miller and @Robert Herrera, not implying that you two are having trouble in any way, but as we all know... Business is a game of teamwork and that's what I'm here for.

    Be in Touch!

    Diedrick Z.

    0Reply
  • Jonathan Harris
    General Contractor · Denver, CO · Member since 2016 · 63 posts · 24 votes
    10y

    @Matt Anton is there a link for the webinar that you listened to? 

    This is a great thread, lots of the same thoughts I've been having over the last few months.

    0Reply
  • Matt Anton
    OP
    Rental Property Investor · Fort Collins, CO · Member since 2015 · 10 posts · 3 votes
    10y

    @Jonathan Harris the link for the webinar is https://www.biggerpockets.com/proreplay/169-how-to-buy-your-first-or-next-rental-property-in-90-days-or-less

    1Reply
  • Matt Anton
    OP
    Rental Property Investor · Fort Collins, CO · Member since 2015 · 10 posts · 3 votes
    10y

    @Diedrick Nagel if you have any wholesale deals available I would be interested in talking. 

    0Reply
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