Getting started in real estate

6 Replies

I had a horrible experience with a forced rental many years ago. I bought a house hack in 2005, then forced to move due to a job relocation in 2008. Horribly upside down and after a good first renter, I was had to evict the second renter only to find that she destroyed the house and stole all of the appliances. Still feel the pain from that situation but I don't blame real estate, I blame Mike. Now I'm looking to invest in the greater Jacksonville market. SFH using the BRRR method: Working class neighborhood (B-, C+) and improve it 1/2 a grade higher thru a modest rehab, around $200k all in. Looking for meet the 50% rule, 1% rent rule, 75% ARV, cash flowing $150+/mo after all expenses. I think Aug-Sept will show a spike in short sales/foreclosures as people get snowballed by the forbearance option and want to be ready to jump in by that time. My goal is to add a house a year over the next five years and have this as a side hustle while keeping my W2 job, which I enjoy. I've been reading books, articles, and listening to BP podcasts obsessively since the beginning of the year and have analyzed about dozen properties but haven't found any that met my criteria listed above. Thanks for taking the time to read thru my introduction and look forward to becoming more involved with this community.

MB

Welcome to BP @Michael Bowen ! Sounds like you already learned some valuable lessons... I learn more everyday. Like this week... the new resident that comes in town to start his business and turns out the home you rent to him is the place he runs his business out of... a worm business. Wuhan, Riots & Worms... crazy times. Good Luck... you are on the right track - analyzing as many properties as you can and a deal will come your way. Happy to chat RE with you. Just finishing up my first BRRR now :)

@Michael Bowen It's important to realize your prior mistakes and to not make them again. You said you want to BRRRR but that requires you to become a landlord. Who said rental's are required for your REI success??

How are you funding the first investment and why? It changes the type of properties you can (or should) be looking at and what investor you're striving to be. 

Originally posted by @Jaron Walling :

@Michael Bowen It's important to realize your prior mistakes and to not make them again. You said you want to BRRRR but that requires you to become a landlord. Who said rental's are required for your REI success??

How are you funding the first investment and why? It changes the type of properties you can (or should) be looking at and what investor you're striving to be. 

JW - that first house was a forced rental, the next one will be a planned rental. I foolishly trusted a property manager and gave him my faith undeservingly since I was out of town. He's in the business and I just need to ignore my gut feelings that say this new tenant won't be a good fit. Cost me tens of thousands. I'm looking at long term hold and and looking out a decade at a time now.
Financing will be a combination of sideline cash, HELOC on my primary, conventional mortgage, 401k loan (only if necessary), and private money (again, only if necessary). I'm looking in the $200k range SFH with minimal rehab <$25k and under 3 months.
Five doors in the next five years. I’m OK to leave a little capital in each purchase. My sideline cash isn’t needed to pay any expenses for the next year.

@Michael Bowen That's a bummer but at least you learned some valuable lessons. Your plan for financing sounds incredibly complicated. Either way it sounds like you're on the right track.

Sideline cash - Yes! 

HELOC - Good

Conventional Mortgage - meh, good luck finding a deal

401K loan - Are you crazy?

Private Money - Expensive (unless you tap family and friends)

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