@Marcia Maynard great post thank you

@Marcia Maynard NOW THATS A STRATEGY !!! Congratulations on all of your success to you and your husband.

I'm also 38 and purchased my first rental last year.  I have since purchased two more.  My target market for investment units is a 3/2 townhome in an A-rated school district in a quality, family neighborhood.  Good luck! 

32

22 doors

multifamily in Louisville and Austin

My wife and I started around 58-59 back in 2016. We are now looking for our 15th project. We got started by selling our first rental property we acquired in 2009 to get the cash to buy, flip, rent, more houses. We created our LLC in October of 2016. Since then we have flipped/renovated 14 houses and currently have 9 long term rentals and one of our son has one we helped him with.

Our goal, we are mostly working on passive income for retirement. Shooting for 30 doors in next 2 years that all have nice positive cash flow.  We are also looking to consolidate and/ or moving to Multifamily in the near future.

Our why, very comfortable passive income in 2-3 years when I retire to give us the freedom to travel and relax more.  We also want to have a legacy to pass down to our 3 Sons and their families.  

Our Team, we have hired several contractors and they do most of the work.  We keep an eye on them closely and only use the ones we like and trust.  Believe me that is probably one of the more difficult tasks in this game.  We do some (very little) of the work but mostly contract out the big stuff like Kitchens and flooring, our contractors that we keep close are an Electric, Plumbing, Flat work (concrete), and a good foundation guy (basements leak and or crack around here and that work can be very expensive from a big companies).  We bid out drywall and painting.  We have our great handyman do most of the rest of smaller jobs.  The rest of our team consists of a good Realtor, Title Company, and Real Estate lawyer.  We use a property manager for all our rentals. We just add that to the cost of the deal when we do the numbers on the property. We have our renters properly vetted using a through process the renter applicant pays for.  Bad Credit, multiple legal cases, bad or no rental history, are all deal breakers.  

One good note is... If we had it to do over we would have found and used a good hard money lender from the start. Instead we used our money for down payments, using Bank loans and or interest only loans then refinanced the houses using a local bank to do most of the rehabs and flips. We have more invested in the process than we would like to have. Even with that, we are cash flow and cash on cash return positive because the numbers always worked. Be precocious and always have a bigger buffer than you think you need. It worked for us at the time however we will use a hard money lender from now for future deals. They are faster to close and you do not tie up your own money. Ironically, the very first time we went to a REI group meeting, the first thing we were told and I remember it every day was, "Don't use your own money to buy a house." We did not understand the gravity of that comment then, but I can't think of a better thing to say to a new investor. I thought to invest you had to use your own money. But that is not the case. I could not imagine how to buy a house without using our own money. But you can. I remember several times throughout our past years repeating things I had heard on Youtube or BP to my wife like, "We need to buy another house but with no money down." My wife's normal response was, "No one will loan us money for another house with no money down". But the will.

It is good to look for a lender and know where they are - ask other investors (REI groups) who they use and the fees involved and build some kind of relationship with a couple of them. Keep a good credit score - this is all crucial - then when you find a good deal, you will be able to get financed. That is the beauty of this business. Finding a deal is hard and you need to be fast and good at knowing what a good deal looks like. Money will be there if the deal is good. At first evaluate every deal as if you were going to buy it. See what the numbers are and discuss with another investor for thoughts. Once you have evaluated several deals you should be able to get the feel for what a good deal looks like. Don't overthink and don't be afraid to pull the trigger. Not doing a first deal within the first year probably means you are not suited for this.

Another good note...  Someone said, "With every deal you do, you either make money, or you learn something from it."  We have worked out payments with sellers, and purchased houses with cash, paid for all the repairs and financed out 100% in the end.  Those are the deals you really feel great about.  Fortunately, the most we have lost on a house is $500.  It was a house that could not be rented due to a new ordinance.  We had to sell it.  It was a good lesson.  

Good luck and hope to hear from others on this also.

@Jonah Freedman - Not to be too forward, why does this matter?  Trying to understand how this helps the BP community or what's trying to be accomplished by staying your age and number of units?

@Jonathan Paul Shortt

Just curious why you wouldn’t go through a turn key provider again? I sometimes think that might be a good route especially since my husband and I have full time jobs. I know there are good and bad aspects of turn key, so I was just curious about your experience.

Thanks in advance.

Thanks @Ryan Hazelwood for starting this thread. It's awesome reading everyone's story.

Everyone's input inspires me! I am looking fwd to this journey. The biggest issue for someone from NYC (me) is finding affordable properties in the surrounding states. The numbers for the properties in NYC just do not make sense. I will keep doing research til I find what I am looking for whether it's in NY or somewhere close by. Anyone else from NY/NJ/CT/PA ?

@Claudia Adams

The turnkey property has been just ok, and it is hard for me to be too upset about it, because it was my first REI purchase. Like most people say, at some point you have to take the plunge, and for me turnkey was the easy way in. Now that I have just a little bit of experience, I quickly realize that value add and short term rentals are much more lucrative ways to invest, but they do require more work.

In general the turnkey property has to generate money for multiple different people throughout the process that by the time it reaches you or I (the end buyer) we are paying close to retail which produces sub optimal returns. If I want 6-10% return on my money I might as well just throw it in a vanguard fund and leave it as that is an even more passive way to achieve that return, and the turnkey properties I have looked at will not return more than 6-10%. 

I also have a full time job but am putting some systems in place, especially for my STR that automate 90% of the business, and I will achieve 30%-40% CoC return.

Many much more experienced people on here will tell you the money is made when you buy, for me moving forward, buying turnkey makes it impossible to make the kind of return I am looking for.

Jonathan

Originally posted by @Ryan Hazelwood :

@Greg Gaudet thanks you for the inspiration! My aunt and uncle own a house on Maui. I can’t imagine what a “low income” property would even be worth considering theirs was like a couple million or more. How does section 8 housing work and is it worth it?

Wow this is a busy thread.. just getting to respond to this and it's 8 pages later lol 

The condos I buy are around 100-200k. I own 6 in one complex, and the average sales price there is about 140-150k (dated units selling for 120ish and nice ones up to 180ish). I bought mine for 70, 75, 95, 97, 30 and 50 (more detailed numbers on each unit and pics on my BP profile). 

For HUD you just post that you'll accept HUD in your ads. Then fill out a packet for them to review. Then they approve the rent amount, then send an inspector to make sure all appliances, outlets, doors, etc. all work. Basically anything that is health and safety - they don't care about permitting or legality from my experience. Then once approved the tenant moves in and HUD will pay a portion of their rent each month by direct deposit.

I collect $4,006 from HUD each month, and a little under $1,000 directly from the tenants (obviously not counting the tenants that don't have HUD assistance). I like this because I can cash flow even if all my tenants stopped paying their rent. And I can evict them, even if the total rent is 1400 for one unit, HUD paid 1300, and the tenant didn't pay their $100 portion. So if a tenant stops paying I can evict them, but cash flow during the eviction. But the reality is that tenants know they lose their HUD if they get evicted, so they generally don't let that happen. Like anyone else, you have to screen HUD tenants, probably more than others.

To answer your question; "is it worth it"; it's the same answer as every other question in REI - like should I buy in my own market or long distance, should I buy SFH or MF, etc. The answer is: it depends on what your goals are. HUD works great for me. But I know others that have hated it.