New to OOS REI from Los Angeles, CA

[Mark De sagun]

Hi Everyone!

This is my first post and I've been diving into real estate investing for a few weeks now; just reading, listening, and watching REI information non-stop. So I'm brand new to the space. A little background… I'm a 31yrs old special education teacher and my girlfriend, turning 32yrs old next week, is a TV producer. We both live in the Los Angeles area. We're kind of house hacking right now by still living with our parents and we have a good amount of money saved up that we would like to invest in out of state rental real estate. Last year, we took a year off to backpack the world. We were able to travel to 17 countries over the course of 11 months. It was an incredible experience that'd we'd love to have the freedom to do again one day. We've dedicated ourselves and made it our goal to become financially independent by the age of 35. That gives us 3 years. Below is our rough business plan. Feel free to rip me apart over it.

How feasible are my expectations for my first turnkey property? When using a turnkey provider, such as Memphis Invest, what kind of ROI and cash flow can I expect on a $100,000 property? I was thinking starting with a turnkey provider would be a good way to start and get my feet wet but I also think that trying to do it myself would have a better (or worse) ROI.

I’m a teacher on spring break this coming week, so I plan to call as many turnkey providers and practice running the numbers on as many properties as possible to try to figure out the answers to these questions myself. I also plan to attend 3 of the BiggerPocket meetups in the LA/OC area this week. If anyone else plans to go, I’d love to meet someone with similar plans and goals. Finding a partnership on a deal where we could learn how it’s all done would be something we're very open to.

We have some starting capital which I think helps greatly, but obviously we can't get over eager and blow our first deal. I think I'm a little surprised at how quickly you can learn and start running the numbers. I hope to be making an offer on something profitable soon. Like I said, I've only been diving into this REI stuff for a few weeks now so any sort of feedback, advice, or encouragement is greatly appreciated. I hear it's a great time to get into real estate.

Mission Statement: To be achieve financial freedom as a couple by investing in rental real estate. This will allow us to travel more and spend the rest of our lives as we please. Hopefully we can prove that the model of BRRR works for us and invite our friends and family into deals so we can all prosper.

Goals:

1. Achieve financial freedom by the age of 35. (3 years)
2. Buy 2 properties in 2019

Strategy:

1. Buy 1st turnkey property by July 1, 2019. Cash buy. Minimum 11% ROI $150/mo. Cash flow
2. Buy 2nd turnkey property by Dec 31, 2019. Cash or traditional mortgage. Minimum 12% ROI. $200/mo. cash flow
3. By April 2020, possibly try minor rehab project or buy another turnkey property. Traditional mortgage or refinance 1st property. Minimum 15% ROI $300/mo cash flow

Market:

1. Indiana?
2. Ohio?
3. Michigan?
4. Tennessee?

B, C, D class neighborhoods. Single Family Home or 2-4 unit multi-family homes.

Criteria:

Tenant in place. No/minimal rehab. 11% ROI on 1st property. In a city predicted to grow.

Marketing Plan:

MLS, bigger pockets, call as many turnkey providers/investment real estate agents as possible.

Visit the cities of interest. 

Put in offers that make sense

Financing:

Michelle- $65,000 cash

Mark- $65,000 cash

Teams & Systems:

Mark & Michelle- kickass power couple.

Need to call turnkey providers and investment realtors

Need to set up LLC in state of property

Need to set up business bank account

Need to find Mentor

Need Attorney

Need Accountant

Exit strategies & Back up plans:

Hold and Rent as long as possible