Where to start investing?

Question

Michael Lee · Answer

Hello and welcome to BP!  Much of what you decide to you depends on what you enjoy doing and what keeps you with your family.  I am 60 years old now and my wife and I have a daughter in her 3rd year at the University of Arkansas and we live just outside of Dallas Texas.  I believe that it has helped her maturity being 6 hours away.  Because she is so far we only get to see her during school holidays.  But she has turned out great.  She has a boyfriend that grew up in Arkansas and he seems like a great person for her.  My mom and dad have met him and they like him.  Growing up in Dallas made their decisions responsible.

My mother had 3 boys when she was 21.  Eventhough my parents got divorced when I was 10 my father stayed very involved and had to do with what I grew up to be. My father has always been self employed and he has been buying and selling real estate (mostly commercial) for about 45 years and always had a way to talk to people.  He was the main reason of why I went to college and graduated with a business degree that emphasized real estate.  I had a broker license for about 30 years but never did that full time.  Eventhough we were born with good genes and my younger brother died when he was about 35 and had Lukemia that took his life.

I have much to talk about but it can wait to later.  I have been a member of BP for about 19 months but have not decided what to do yet probably because medical problem recovery.  That's happened about 6 years ago and I am slowly recovering and cannot walk yet.  Since I have been stuck with being at home most of the time, I have been learning about 10 hours per day (7 days a week).  I am sorry to include that but I hope you will get something out of it.  I think that multiple rental units are a good thing but do not get into your feelings and just make sure you do in the beginning is to use your math analysis and doing what is regular is the best way to learn.  Do not get into anything that is vacation related until you have some experience in doing regular things.

Do what is simple and average for that neighberhood.  There are a few things to consider doing before you start but after you select your niche and marketplace.  Many people are recommending wholesaling as a place to start but there is so much competition doing that.  It is a good place to learn but so is BiggerPockets, local clus, and reading books.  What you might fonder doing are rental units and wholesaling.  Rental units tend to be more long term investing.  Small apartments is a good way to start out with no expererience necessary and bass less competition.

Have you made any contact with Lance Edwards?  He started out doing that part time in the evening at his kitchen table.  He stayed at his regular job for about 2 years and quit when he was making enough money to support his family.  He is now into teaching after he got successful.  I beleive he is now in Houston and advertises teaching.  He has written a book about small apartment complexes which is pretty Good.  One thing you might consider doing some formation of some sort of corporation or a LLC.  You might need to hire an attorney and/or a CPA to advise with to get the right business to form.  That should keep your personal things out of reach if your business has any legal problems.

Another thing you might consider doing is to get any financing figured out and get a loan letter from your lender that states their average loan closing time and the maximum amount you qualified for.   Another thing to consider is the location that is convenient and has minimal distractions.   You can locate your office at your place if you can close it off and has minimal distractions that you can do. WithoutStay in control of everything you are responsible for.  Do not assume anything.  Do not beleive a busines card title means they might know as much as you.  Let everyone know your intention or what your goals are and make sure they understand.

Track all of your responsible for in a report style that you can review regularly and possibly reduce expenses and increase the income.  You can do it yourself or with good team members.  Find/Get local Team members that are experienced at what you do.  The primary Team members are typically Attornies/Lawyers, real estate Brokers/Agents, CPA's (or accountants you trust and are knowledgable), Inspectors, Property Managers, General Contractors, and Handymen.   Education goes on forever and you can learn more about your niche or know how to read financial statements.    The more you learn the more confident you will get.

You will make some mistakes after you start investing.  They are normal so you just make them a learning lesson and try not to do that again.  Do not try to do everything yourself. Just be patient and learn how to walk awayand go on after the next one.  Let me know if you need any help on something that you feel I can through BP.  I am usually on it every bay.

Good luck to you!

Ryan Siegert · Answer

Hi Clark,

If you decide on College Station as a place you would like to invest in before your son comes to Aggieland, I can set you up to receive listings from our MLS. Just pm me your email address. There are a few duplexes, fourplexes, & SFH that I am currently watching here in BCS that look pretty good on paper.

Cheers, Ryan in College Station

Arianne L. · Answer

@Clark Dickenscheidt Personally, I would start with a local rental. You likely have more knowledge of your local area fairly well including prices and rental rates.

I invest in the Destin FL area and with vacation rentals, and paying for a vacation rental property manager (usually 25% management fee), you can make the same returns as a long term rental. But could potentially use it yourself as well.

Lauren Lockett · Answer

CONGRATS on your new journey! Check out the Ultimate Guide to Real Estate Investing! Don't hesitate to reach out if there's something I can do for you!

Leslie Pappas · Answer

Hi @Clark Dickenscheidt, if you’re interested in a “hands-off” experience in real estate I want to educate you about an investment product you may have not heard of before, it’s called a DST (Delaware Statutory Trust).

They are available to accredited investors and have minimum investments as low as $25,000 for straight cash. Investors may develop their own personal portfolio of institutional properties using DSTs as cash investments. The potential to both diversify broadly and own institutional real estate can be very powerful.

Tony Castronovo · Answer

I thought about buying a house (SFH or duplex) near U of H where my daughter goes to school.  But I don't know the area well and it's actually too far for me to manage right now.  I would be concerned about a property in College Station.  You don't want to put pressure on your son help you manage the property, while there is so much other stress of being a freshman in college.  Not saying you would do that but it could put him in a weird situation as the "landlord's son".  I do love the idea (makes financial sense).  I was thinking maybe doing it for my daughter her last two years.

Depending how you use the $65k, you could potentially pick up 2 or 3 SFH rentals with this amount.

Tony

Where to start investing?

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