New to real estate investing; an introduction

New to real estate investing; an introduction

Member since 2020 · 4 posts · 5 votes

        I have been really nervous to write this introduction for several days. However, I have seen some of the BiggerPockets podcasts on Youtube, and agree that there is no time like the present to put myself out there.

        My name is John Freed and I am from southern California. I am 24 years old, and I am currently a graduate student pursuing a degree in Materials Science and Engineering. Here is a little background about myself and why real estate investing appeals to me!

        I have never been "conventional". In high school, I decided that I wanted to go and see Germany. However, for a low income family that was never really a possibility. Looking for resources I found a government program that allowed me to attend a German high school for a year with no money of my own. I couldn't afford college, so I traveled across the country to Maine, to attend a college that funded me completely based on financial need and good grades. After college I found myself back at my childhood home. My degrees I had thought interesting in school(B.A. History / B.A. Government & Legal Studies) didn't hold my interest any longer. I was in a rut and spent a good several months not doing much of anything. Then I found an amazing program in Boston.

        While my undergraduate degrees were in the arts, this program allowed me to take foundational STEM classes in order to skip over a B.S. in engineering and begin my studies in a masters program. I couldn't afford the high price tag of the school, but the opportunity was too good to pass up. I met all the prerequisite courses over the next year and a half at my local community college. I am in the process of taking my last foundational course next semester for my program, and will take out a federal student loan to cover the cost of a year of study in Boston, which I hope to pay off soon after graduation.

        So, why real estate? When I was 15 or so I had goal to own a house free and clear. My parents are still paying the mortgage of their own house, and beyond its equity, have no plan for retirement. My interest for real estate has come back with vengeance. I figured now that I have access to a career that would provide me with more starting capital, I could help out my parents and maybe reach my old goal along the way! 

        Ironically, one of the first books I've read on real estate (which lead me to this website), was Brandon Turner's book " The Book on Investing in Real Estate with No (and Low) Money Down". I felt like a lot of the basic principals he outlined in his book matched where I am coming from, starting my journey by any means!

        I am really excited to meet any, and everyone who spent even a moment of their time to click on this post! 

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New to Real Estate · Boston, MA · Member since 2019 · 9 posts · 6 votes
5y

@John Freed awesome story! You are definitely a hustler. I am also new to real estate investing. What has helped me is talking to professionals in my local area. Stop by your local bank, RE brokerage, a general contracting company, etc. Introduce yourself and let them know you are excited to learn. Most people are helpful! Good luck on your journey!

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  • New to Real Estate · Boston, MA · Member since 2019 · 9 posts · 6 votes
    5y

    @John Freed awesome story! You are definitely a hustler. I am also new to real estate investing. What has helped me is talking to professionals in my local area. Stop by your local bank, RE brokerage, a general contracting company, etc. Introduce yourself and let them know you are excited to learn. Most people are helpful! Good luck on your journey!

  • Member since 2020 · 4 posts · 5 votes
    5y

    I forgot to add:

    I am intrigued by MFH's and the idea of "house hacking". I am interested in learning if this is possible while in school, with debt, in a market as expensive as Boston, MA! Have others been successful with little money down in Boston, and what combinations of tools did they use to finance?

  • Investor · Northern New Jersey · Member since 2020 · 94 posts · 96 votes
    5y

    @John Freed

    Welcome John!!!!!!

    What a great story and such a positive attitude. Your story reminded me a lot of myself. Never taken NO for a answer and turning lemons into lemonade.

    It's a awesome quality. I would bet that you will do just fine in this business. Being patient, thinking outside the box and being self reflective are great personal attributes to thrive in this game.

    If you have any question my door is open feel free to reach out

  • Real Estate Agent · Auburn Maine · Member since 2020 · 40 posts · 14 votes
    5y

    Welcome John! What college in Maine. If you are ever back this way, lets get a drink!

  • Realtor · Napa, CA · Member since 2018 · 112 posts · 77 votes
    5y

    @John Freed, Wow my friend! That is a crazy story! I wish my wife would have found a program like you have found to get her Masters. Maybe we wouldn't have racked up $40k in student loans! Anyways, WELCOME! BP is the perfect place to meet your team, learn the ins and outs of investing, and get you ready to invest. I would recommend that you become a PRO member, the reason why I say this is you will want to analyze a lot of deals and the calculators they have built on here are awesome! I have used almost all of them, probably over 50 times! With your PRO membership you get unlimited uses and it saves your analysis (and no, I get no commission or anything for recommending this). 

    You mentioned house hacking! That is great!!!!! DO IT! I wish before my wife and I had our first child we would have found a MFH and house hacked! We would be in such a better place. We did a SFH house hack that has gained us around $100k equity but unfortunately we cannot use it due to our LTV too high for banks to give out that equity. We are working on saving and hustling to get some money ourselves to buy another property as either a flip or BRRRR. I am in Norcal so if you would like to connect, message me and I would be happy to help and share what I have learned thus far. Also, book recommendation is David Greene's book on out of state investing! Good luck and see you around!

  • Boston MA · Member since 2019 · 19 posts · 15 votes
    5y

    Welcome John to the BP Community!

    Have you read Rich Dad, Poor Dad yet? If not, it's a great read & highly recommend it. 

    Boston is a tough market and you either need a lot of money to put down or a great job that provides you with high income or a combination of both. I don't want to sound like a downer, but a lot of these books and even conversations in BP don't apply to Boston. It's like trying to invest in Manhattan, the market has already been bought up and you need to find the surrounding areas that will be the next hot spot (think Brooklyn or Bronx NY). There are stories of people getting great affordable homes here, but they got them back in the 2007-2012 recession. You can't buy a home here in MA for really under $300k and if you look at some of the discussion groups, people are buying homes in NC, Georgia, Maryland, Ohio, & places where you can buy a MFH or SFH for really cheap ($150k - 250K). The rules they use don't really apply for Boston, but they can work outside of the city in other areas like; Haverhill, Lowell, Lawrence, Worcester, & Fall River. You can house hack and do the BRRR strategy in MA, it is tough to find and even harder to bid on & get one in Boston though. A lot of contractors & developers buy up all the MFH's and turn them into condos. Boston gets a lot of investors from all over the world and even covid hasn't seemed to slow that down. You can try close to the city like Everett, Revere, & Chelsea. Again, even in those areas, the homes are still pricey but you can find deals (around $550k - 600k).

    First thing would be to talk to a bank / mortgage lender and find out what you can afford and what loan options you can get. Based on the loan amount & down payment, come up with a plan, research the areas you can afford and figure out what your goals are. Do you want a nicer 2 fam that you can live in almost rent free in a great neighborhood for a long time or do you want a 3-4 unit, cash flowing MF that might not be in the best area, a little further from Boston but you can move out of it quickly. You also don't have to go at it a lone. You could get a partner and see if you both can tackle your first investment together. 

    Stay positive & never give up, always keep pushing and moving forward. There is never a bad time to invest in real estate, people will always need a place to live. Biggest thing is, do your numbers. Always run the math & give yourself a cushion for decrease in monthly rent, vacancies, repairs...etc

    Good Luck! 

  • Brandon GoldsmithBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2020 · 1k+ posts · 1k+ votes
    5y

    Congrats on making the leap! Sounds like you have a lot of goals set for yourself. House hacking is one of the easiest ways to get into real estate and you should take advantage of the opportunity while it's there. I am getting ready to do it here in Columbus, OH. Best of luck! @John Freed

  • Member since 2020 · 4 posts · 5 votes
    5y

    @Jason Bee After you were the 4th person to suggest it, I read Rich Dad Poor Dad today. I can see why it is so highly praised! Thank you for the heads up on the investing climate in Boston. Do you invest there yourself, or do you find deals outside of Boston for the same reasons you told me about?

  • Real Estate Agent · Auburn Maine · Member since 2020 · 40 posts · 14 votes
    5y

    I'm in Auburn and do lots over towards Bowdoin. I was a chaplain at Bates for a number of years, so we did a lot with Bowdoin. 

  • Boston MA · Member since 2019 · 19 posts · 15 votes
    5y

    @John Freed I'm glad you read it! it's much more than a book about finance & investing, it's a mindset. Hope you have a Happy Holiday, Merry Christmas, & Happy New Year! 

    I actually have been trying for 3 years to break into the Boston market. I even switched over to looking at condos in the city to see if there are any good deals, there are a lot more now being offered in Southie for reasonable prices (around $575k). But the numbers aren't working for me, you get a 700 - 800 sqft place that offers you terrible parking. lol The SFH (single fam home) market in Malden, Everett, Revere, & Chelsea aren't bad now either, I am only looking for a MFH (multi fam home) 2-4units in those areas but they are tough to find for a reasonable price. My goal is to live rent free if not close to it, to save and then rent out my unit for a small monthly gain. I made offers in Everett & Malden summer 2019, came close, got out bid by an extra $10-20k for ok homes, but that was already after offering $20k over asking. It just didn't work for my numbers. This past summer 2020 I was outbid by sometimes $60-80k for MFH's that were not worth it at all. Even for ones that needed work in both units and you could BRRR it but the money you put into it, wouldn't generate the equity to justify the costs. One major factor I found, is that families were competing for the MFH also besides investors, and families would pay way over asking because they were not going to use it as an investment. I should also mention, check out Dorchester and south of the city. If you don't care about traffic, the south shore, areas like Quincy, Weymouth, Braintree are good spots to find reasonable MFH's. Quincy & Braintree have the T (Red Line) subway system & commuter rail options for people who work in the city.

  • Boston, MA · Member since 2019 · 15 posts · 19 votes
    5y

    Welcome John! I just recently purchased a Multifamily Duplex in Malden. My suggestion to get started and to ramp up your learning curve is to start picking up the phone and calling potential stakeholders as if you are ready to purchase in the near future. From the sounds of it, you will most likely need 2 years of a W2 job to qualify for an FHA or conventional loan. Even still, make the calls now so you know how to set goals and what those goals should be. Who should you call?

    1) Lenders, without a preapproval letter, you won't get very far. So call a few lenders (even google, "top lenders Boston") explain your interest, your situation, don't be afraid to say "this is my first purchase so I am looking for guidance on how to get started". After a few calls you will know who you want to work with and who is willing to work with you. Also find out how much you can afford.

    2) Realtors, ask for recs from friends or just google realtors in the area. A few phone calls with these folks and you will have a better sense of how the purchasing process works and what markets to look out for. Ask blatant questions like, "I want a duplex, I want to do cosmetic upgrades and light renovations to add value, where do you suggest I look?" This will give them a sense of your market and ask to be added to the MLS to start viewing houses in your realm.

    3) Create an excel doc of your target market and write down all relevant items. Population, Pop Growth, avg income, rent to ownership ratio etc. This has become super useful for me when I got stuck or unsure about moving forward, I revert back to this doc to confirm why I am looking in a specific area. Once you find a few areas to begin looking, google: "Location (Malden for example) Redevelopment". You will come across a city website with all future development plans. This is a great way to find long term protective areas or up-and-comers.

    Good luck and don't hesitate to reach out if you have any questions. I have also created a few key excel documents that allowed me to analyze +100 properties at once. Reach out if you would like a copy!

  • Boston, MA · Member since 2017 · 209 posts · 126 votes
    5y

    Agree with the others on here, you might find something in Boston, but it will not be somewhere like Back Bay or Beacon Hill. Not that you cant still find a great place though, you just might need to focus on some of the other neighborhoods and cities in the Boston area. I also recommend house hacking...but that can be tough to make work. There are a few other unorthodox methods, but they have become less desirable in the pandemic, notably using STR and Airbnb to "half-house hack"

    Also reading your story I was surprised you didnt join the army. "Free" trips to Germany and "free college" but it sounds like you have found some creative ways to get what you are looking for! Happy to chat if you are interested and best of luck!

  • Real Estate Consultant · Member since 2018 · 99 posts · 50 votes
    5y

    Welcome, @John Freed

    If you like reading real estate books, I highly recommend Profit First by Mike Michlowicz. Without any financial literacy, it tells you how to manage the finances of your properties and business.
    I'd also recommend Gary Keller's The Millionaire Real Estate Investor because of the book's practical tips.

    Good luck on your journey! 

  • Rental Property Investor · Bronx, NY · Member since 2011 · 193 posts · 322 votes
    5y

    Congrats on your journey so far @John Freed... you are definitely a go-getter and make things happen! I have house-hacked in an expensive market (the Bronx) - bought a 3 family house in 2015 and live in one unit for free while renting out the other 2 apts and 2 parking spaces. For a short period I also rented out the other bedroom in my apartment to MAX the income! Depending on your credit/DTI and how much you have saved, House hacking a multi-fam in Boston is still very doable. I don't recommend getting a single family at all. Message me if you want to talk more details!

  • Member since 2020 · 4 posts · 5 votes
    5y

    @Nicole (Dunlap) Pendergrass:

    Wow, that's an amazing deal! I am actually at work right now, but I do have some questions I want to shoot over to you in a DM when I get home.

  • Rental Property Investor · Bronx, NY · Member since 2011 · 193 posts · 322 votes
    5y

    @John Freed  Sounds good :-)

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