Newbie from Davenport, FL (Central Florida)

[Kurt Johnson]

Hi BiggerPockets!

I'm Kurt, I've just discovered this community and the podcast in the past week and have been consuming as much information as possible. Recently my wife and I have decided to start looking into Real Estate Investing in order to achieve our long term goals, and for me that opened up the floodgates to deep dive into this topic.

To digress, I'm a Technical Director for a Web Agency at the moment. Been making websites since the 7th grade, and fell in love with technology and computers. But now that I'm married, planning on having children, and inheriting my wife's daughter as my own, I'm really looking to increase my passive income and set a comfortable life for my family.

Right now, I'm feeling the terrible sting of bad debt that seems to come after a wedding, and just working through trying to pay that off as soon as possible.

So I do have a question, and I'm not sure if this particular forum is the best to do it in (I don't typically write in forums) but I've been trying to learn about how to find the right deal and have compiled a list. You can use it for yourself, I don't mind, but I'm just looking for feedback on whether or not I'm even thinking about this in the right way. By the way, my plan is to buy one house within the next year to rent out for passive income.

Bahama Bay, Davenport

• 2/2 Ground Floor Condo
  • $89,000
  • 1374ft2
  • Comes with Furniture, Washer & Dryer
  • http://orlando.craigslist.org/reb/5770886817.html
• 2/2 Condo
  • $75000
  • 1374ft2
  • No furniture, washer or dryer
  • http://orlando.craigslist.org/reb/5770814715.html

Leesburg, FL

• 4/2 Duplex
  • $18,500
  • 1516ft2
  • Massive Fixer Upper
  • Could rent each Duplex
    • Potential: $1800 - 2000
  • http://orlando.craigslist.org/reb/5757700325.html
• 2/2 Small House
  • $30,000
  • 720ft
  • Has a big yard supposedly
  • http://orlando.craigslist.org/reo/5770345342.html

UCF

• 3/2
  • $57,900
  • 1344ft
  • No pictures
  • Could rent each room to college students
    • Potential: $1800+/month
      • $600 or more each room
  • http://orlando.craigslist.org/reo/5770463111.html

HUD Homes

• 3/2 Home
  • $76,000
  • 1450 ft
  • Huge lot also
  • http://www.hudhomestore.com/Listing/PropertyDetails.aspx?caseNumber=091-492444&sLanguage=ENGLISH&zipCode=&city=&county=&sState=FL&fromPrice=0&toPrice=100000&fCaseNumber=&bed=0&bath=0&street=&buyerType=0&specialProgram=&Status=0&indoorAmenities=&outdoorAmenities=&housingType=S_C&stories=&parking=&propertyAge=&OrderbyName=SCASENUMBER&OrderbyValue=ASC&sPageSize=10&pageId=4
• 1/1 Condo
  • $46,000
  • 882 ft
  • http://www.hudhomestore.com/Listing/PropertyDetails.aspx?caseNumber=093-569976&sLanguage=ENGLISH&zipCode=&city=&county=&sState=FL&fromPrice=0&toPrice=100000&fCaseNumber=&bed=0&bath=0&street=&buyerType=0&specialProgram=&Status=0&indoorAmenities=&outdoorAmenities=&housingType=S_C&stories=&parking=&propertyAge=&OrderbyName=SCASENUMBER&OrderbyValue=ASC&sPageSize=10&pageId=6
• 2/2 Condo
  • $37,000
  • 945 ft
  • http://www.hudhomestore.com/Listing/PropertyDetails.aspx?caseNumber=093-608642&sLanguage=ENGLISH&zipCode=&city=&county=&sState=FL&fromPrice=0&toPrice=100000&fCaseNumber=&bed=0&bath=0&street=&buyerType=0&specialProgram=&Status=0&indoorAmenities=&outdoorAmenities=&housingType=S_C&stories=&parking=&propertyAge=&OrderbyName=SCASENUMBER&OrderbyValue=ASC&sPageSize=10&pageId=6

[Zach Kidd]

Hi Kurt! I'm a Realtor & LCAM (Licensed Community Association Manager - Condo & HOA management) in St. Petersburg.

I managed several HOAs in your area a few years back, so I'm familiar with the area.

Congrats on the marriage, and on taking control of your future!

I do want to hit a couple of points.

1 - "Be a businessman, not a handyman." BP Episode (I can't remember which one, or which guest. Maybe 151 with Clayton Morris?)

Learn handyman skills, so you know what you're talking about. But don't volunteer the knowledge. Or consider taking along someone who you know and trust to give you feedback later. You want to know enough to not be taken advantage of. That said, always hire it out. You're looking to be as hands-off as possible, so you can scale your business. 

2 - Don't focus on the deals right now. Work on developing your strategy and skills, keep shopping deals (hobby level / for fun), and only execute when the numbers line up.

3 - Build your future by building your team. 

Given that you are "in debt", but want to progress to passive income quickly, I would suggest focusing on wholesaling to start, and eventually let that fund your buy and holds. 

Run it past a CPA (add to your team), see how much you will need to budget for taxes on a wholesale deal. Then do enough wholesales to pay off your debts, then fund your first buy and hold.

That will give you a level of familiarity on buying and selling (paperwork, process, time frames, etc.), and enough time to network up to good property manager for your buy and holds.

Once you're familiar and / or comfortable with wholesale, partner in for a flip (or two, or more). You'll learn a ton about cost estimating, materials, timeframes, etc. This ain't for the money, but for the knowledge, and that knowledge will pay huge dividends when you switch to buy and holds.

Don't forget to 1031 whenever appropriate. Save that tax money when you can!

Take a few different Realtors (separately!) out to a nice lunch (we can't resist offerings of food!). They will help you learn the market areas, comps (that's ARV in investor-speak), retail strategies that work, etc. That will help you learn the numbers and strategies in short order. Be up front and honest, and stick with anyone who knows the investing side that you feel comfortable with. Again, you're looking to add to your team.

Until you get a really, really good understanding of Community Associations (or find an agent that has experience with them), avoid Condos and HOAs in the beginning. There are more risks involved (ironically!), and the margins are usually smaller. I could go on for days about this.

Join a Real Estate Investing Association if you haven't already. Find mentors & partners. You can trade services if necessary! 

Don't try to swallow the whole elephant. One bite at a time does the job.