Hello everyone! My name is Jordan Rajchel. I'm from Jeffersonville, Indiana. Very close to Louisville, KY and I'm 30 years old.
I am currently a computer programmer at a connector company in my home town. I enjoy what I do but have always had the entrepreneurial spirit and feel a bit unfulfilled in the "Rat race". I have a Bachelor's degree in Business from the Kelley School of Business at Indiana University and came out of school at a great time to start purchasing real estate.
I purchased my first house as my primary residence in 2011 for 107,000. Did several small projects to the house over the next 5 years while my wife and I lived there and sold it in 2016 for 185,000. During that time, we also purchased our first rental home. We did pretty well on that one too, we purchased it for 60,000 and soon after, it burned down due to some nesting in the fireplace. After insurance pretty much paid to rebuild the entire house, we sold for 135,000. We never did rent it to anyone other than my sister-in-law for a short time.
I now live in what will probably our "forever home" and am interested in getting into real estate to start making some passive income and ultimately quit my day job.
I have listened to a TON of the bigger pockets podcasts and am primarily interested in renting, however, I also don't mind getting my hands dirty and have dabbled in contracting some jobs out myself so may get into flipping as well.
My wife and I are big fans of Dave Ramsey and are within about 5 years of paying off our house. We do not want to get back into debt after that so we are talking about working in cash. At that point I want to be ready to quit my day job and do real estate full time. My wife makes enough money to support us without a house payment and gets insurance through her job so that should make this dream a bit more realistic.
My biggest concern is attempting to do this whole thing with no debt. Anxious to hear from anyone who may have experience in that area!
Hey @Jordan Rajchel . Welcome to BP!
My advice would be to engage as much as you can here. Provide real value and insight, even if it's just based on what you've learned, rather than what you've done. Engaging in that way will be really helpful for you and for the rest of the BP community as you get started!
Best of luck to you!
Thanks Brandon! I plan to
Hey Jordan, glad to see another local investor.
I have only been investing in real estate over the past year however, like you, I have read, watched, and listened to a huge amount of content on BiggerPockets. It's a great resource.
A couple of suggestions:
First, I would reach out and begin networking with folks from the local KREIA group. There are a TON of great resources within our REI groups in Louisville and Southern Indiana.
Second, it is very possible to be an all cash buyer but don't let the word "debt" scare you (I am a big fan of Dave Ramsey as well). As long as it's utilized correctly, under leveraged, and viable from a financially defensive position, you can create tremendous growth - faster than you otherwise would have.
I am currently working on my third flip this year (closed on it today actually!) but there are many niches and diversifying is always the way to go!
Give me a shout if you ever need anything!
@Jordan Rajchel A good start is to read "Rich Dad/Poor Dad" and "The Book on Rental Property Investing" from Brandon Turner. These are great books to put you in the right mindset and grasp a good understanding of rental properties.
hi @Jordan Rajchel and welcome to BP
where do you plan to invest? locally?
my own personal advice is to see as many properties / deals as you can, this way when you see a true value property you will know it is the right property... like in the books - the more properties you see the more trained you are in finding good value. value can be found nay where.
Nice to see more people in the area, I look forward to hearing more from you.
@Jordan Rajchel welcome! I also invest in Louisville and grew up there.
I've heard good things about KREIA and have networked with quite a few others in Louisville. Reach out if you need anything!
Thanks for the tips guys. I'm sure I'll be seeing you around here.
I may have misunderstood your intention but I think it is unrealistic to try being a real estate investor using cash only. The investors I have met that are doing well all use lenders. Most feel the more debt the better. As long as you can service the debt I see it as necessary.
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Wishing you the best!
I agree that it makes growth more difficult. My thought was to do a combo of flipping and renting. Flip houses to generate capital, use capital to purchase more rental houses. rinse and repeat.
@Jordan Rajchel I hear what you are saying about Dave's advice, I just became debt free including my rentals with the exception of MY HOME. After listening and reading I feel like I am shifting towards some type of loan, not sure which direction but I feel a change in my course coming. Great job on your previous investments, good luck moving forward. Listen to the latest podcast #289, I feel it is going to have a huge impact on my next move.
Will definitely give that a listen.
To be honest, I am not as against debt as my wife (she is the saver) but we have reaped a ton of benefits from this standpoint so far.
The being said, I feel like there is definitely some middle ground to mitigate risk. Such as having enough cash to back each of your rentals for X number of months of vacancy. Is there any kind of rule of thumb for that?
My nightmare is to end up at a point, most likely due to economic shift, where I cannot find a renter, can't sell the house, and I am stuck with a house payment (or several) and no income being produced on the property.
@Jordan Rajchel - I'm a huge fan of using leverage to grow a portfolio, but you can absolutely run a portfolio without financing, it will just take you longer. Your returns on invested cash are lower as well. But it is safer. I like your 'gray area' idea.
Regarding reserves for rentals, that's dependent on how comfortable you feel. I never had cash sitting around when I was growing, but I did have access to cash through HELOCs if I got into a pinch. If you don't have access to ready cash, then I would definitely have reserves to cover you when things get tight. Whatever amount lets you and your wife feel comfortable is probably a good guide.
If there's anything I can help you with, feel free to reach out anytime. I own a property in Jeff and just moved to the area from Indy.
Hello! @Jordan Rajchel
Welcome to BP, and congratulations on making the decision to invest in your future via real estate.
I have written a few blog posts that may help you get started here on BP, and with your investing. Please click on the links, give them a read, and share your thoughts in the comments.
First is a post that I feel will help not get overwhelmed with the amount of info that is here on BP:
The second is a post that will help get you focused with your real estate investing goals:
The last one is a post that will help you choose an “investor friendly” real estate agent. There are many agents out there, but it’s important to choose the right one.
I love answering questions if you have any! Good Luck :)
Great to have another Louisvillian out here making deals happen. If you ever come into anything that you just can't do all cash, feel free to reach out. My partner and I have some great working relationships with local banks and lenders, allowing us to leverage assets to increase returns. We would be more than willing to partner and guarantee debt on the right type of deal.
We started with one personal rental each when we decided to really give it a go this summer. We have closed on 3 deals and have 18 units (not including our personal rentals). Our plan is to have 50 units by the end of 2019.
Hope to see you around.
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