Brand New Investor with 100k How Do I Get The Most?

[Derek Segesdy]

Hey BP community. I live in the Tampa area. I'm brand new to REI and am just getting my feet wet with the language and techniques. Trying to learn the numbers as I go and understand how to evaluate a property. I'm not dead set on a type of property or investment strategy, BRRRR, flip, STR, LTR, SFH, MFH are all options at this point since I have no experience. My goal is to acquire enough properties to create cash flow that will allow me to retire from teaching in 5 years. Would love to hear your advice! Thanks.

[Jonathan Vasquez]

@Derek Segesdy hi Derek congrats on taking the leap to set your financial goals up. I'm an investor/agent in the Tampa area and would be happy to help. There are many ways to get started in REI I would suggest first and foremost to select your niche, casting such a wide net is the leading cause of analysis paralysis. Doesn't mean you can't do more than one niche later on but focusing on just one was what helped me get started.

[Gaetano Ciambriello]

Hi @Derek Segesdy

If I were in your shoes, without having a niche, I would first purchase a mutli-family property (2-4 units) with an FHA loan. Put down 3.5%. On $400k purchase, that is ~$24,000 after closing costs.

Now you have $75,000 left over. After one year of saving and managing the multi, I would purchase a second multi to live in with 15% down conventional ($70k all in on 400k purchase) or a single family home with 5% ($25k all in on $300k purchase) down. Move into the new property and rent out the multi unit you were previously living in.

Repeat this process. Finding the right properties to invest in are important, but this will be a slow, but sure fire way to build equity and pick up units over a 5-7 year time horizon.

[Dmytro K.]

@Gaetano Ciambriello

Any advice on which areas in Tampa have MF? I can't seem to find any options on sites like redfin, realtor com

[Derek Segesdy]

Thanks for the input guys.  Forgot to mention that we're a family of 5 with three young kiddos.  Trying to get creative with financing options if moving into MF isn't really an option.

I like the advice of trying to find an initial niche and not casting such a big net.

[Phil Bach]

Get a hard money loan and buy two properties with that $100k. Reach out to local wholesalers with good deals. Invest in a nice Smith & Wesson for the ensuing battle royales to secure said good deals.

[Brandon Schwab]

@Derek Segesdy all the above are great options, I’d also consider senior living, specifically boutique senior living. FL is red hot with more ingrowth than any other state in the country. The demographics point that seniors are going to overwhelm the healthcare market and you’re in the a great market for it. Cash flow is king thats for sure, if you are teaching and looking for passive income I’ve seen a lot of opportunities for big ranches in and around Tampa that would be approximately 4-5K square ft. I would contact the owners and negotiate a owner carry back offer and add sprinklers and a generator to the house. Then you can market the property for a retired RN looking for a turn key asset to operation a 10 bed assisted living. In FL you can charge approximately $4K each month per bed which is $40K per month. You can collect rents 2-3X what you could normally from an operator. You own the asset and let them run it while you teach and enjoy your family of 5. Read the book Lifeonaire by Steve Cook as well. Enjoy the ride! How old are your kids? Be there at every sporting ever, never miss 

[Steven Johnson]

Have you considered finding a local syndicator? 

[Jorge Vazquez]

Flip a rental (Airbnb or Corporate rentals even better): Flipping a rental is the best strategy I have found! Benefits: Get cash flow during the holding period Take a depreciation write-off* Avoid taxes via 1031 exchange.

[Chris Levarek]

@Derek Segesdy As you can see, quite a lot of ways to get into real estate. It sounds like you could partner with someone and bring capital while they might have the experience or more time. As you work a teaching job and have a family, you might not always have the time to manage the property and partnerships can be beneficial. However, you can go it alone! So don't think that's not an option.

There are plenty of active/passive investment opportunities. Many will require varying forms of time, capital or experience. So it is up to you to decide what your role will be or what you want it to be. I started in small multifamily, with the BRRRR on C class duplexes however due to the time commitment and risk profile of the strategy/asset type, I now partner and invest in apartment complexes through syndications.

I recommend reverse engineering the goal. If cashflow in 5 years is the goal, decide that number then work back to Year 4,3,2 and finally what you would need in year 1. Now find a strategy that will achieve that.

[Brian G.]

@Derek Segesdy launch a VR biz and learn to self manage (ie remotely). It’s an active biz but you can really juice your returns. If you buy in the right market/s you can reach FI with 3-5 properties, ie the # depends on your lifestyle. It’s a great strategy to escape the rat race! Good luck. Reach out if you want to discuss.

[Joe S.]

Originally posted by @Brandon Schwab:

@Derek Segesdy all the above are great options, I’d also consider senior living, specifically boutique senior living. FL is red hot with more ingrowth than any other state in the country. The demographics point that seniors are going to overwhelm the healthcare market and you’re in the a great market for it. Cash flow is king thats for sure, if you are teaching and looking for passive income I’ve seen a lot of opportunities for big ranches in and around Tampa that would be approximately 4-5K square ft. I would contact the owners and negotiate a owner carry back offer and add sprinklers and a generator to the house. Then you can market the property for a retired RN looking for a turn key asset to operation a 10 bed assisted living. In FL you can charge approximately $4K each month per bed which is $40K per month. You can collect rents 2-3X what you could normally from an operator. You own the asset and let them run it while you teach and enjoy your family of 5. Read the book Lifeonaire by Steve Cook as well. Enjoy the ride! How old are your kids? Be there at every sporting ever, never miss 

 That’s a great idea you had. I have had a property or two that was in the 3200 ft.² range.  Would  something of this size work as a senior living facilities? Also how would I market to an operator?

[Alex Olson]

Buy a $400,000 fourplex in a market like Kansas City and have it cash flow for a year, then 1031 and lever up to to at least a 6 plex. Hope that helps. 

[Ryan Talmadge]

Get familiar with burgeoning markets here in Tampa area and also the laws here. Hillsborough county has some very tricky new laws for landlords that you need to be aware of. Since you have no real cashflow I would recommend you start with what you can afford which is Flips. Right now there are almost no real BRRRR's available and you have a cashflow problem.

You could potentially replace your job easily with just 5 flips which you could complete within 5 months after laying down your initial pipelines.

Flipping is also great because you learn real estate in and out due to having more RE transactions within 1-2 years than most people have in their entire life on even just a small scale. 

I would recommend becoming an agent because it works well hand in hand. To find deals you have to cold call and advertise yourself so why not offer an additional service to other investors on the deals you prospect, but don't wan't by listing them on the MLS and collecting $$$/ contacts.

You could really tackle this anyway you wan't, but if your goal is to replace your income than REI will become your job and if REI is your job you are basically an agent without a certification. So might as well just get one and go from there.

With dilligence you could complete the REA training and get certified over the summer. I did mine within 1.5 months. The next 2 months of summer should just be driving for dollars and finding properties to canvas and building your crm... no one ever talks about how hard it is to find deals, but houses arent crypto or stocks... to find good investments you have to go look for them off the internet especially in hot markets.... this s*** is time consuming brotha....

Once you are hitting the ground running and have already sourced your key contributing team members... GC, insurance, title, lender, etc... you should be good to go....

I would recommend while you are doing all of these things to park your $$$ in a steady crypto with decent returns so it can make money during the 3-6 months it will take for you to find a solid deal...

One option is a crypto based interest yielding account by Gemini that is at 9% APY at the moment. Other options would be to find burgeoning crypto's and just invest in ones that have potential to explode like Filecoin which is at 12% growth per day at the moment....

Theres money everywhere... hope this makes sense im just typing this up unformatted so i'm sorry if it doesn't make sense. 

Good luck brotha,

Ryan

EDIT: You also need to set up your LLC and business bank accounts and write up any necessary agreements for lenders, find a solid CPA, and learn about how to shelter yourself and your family from lawsuits from RE dealings. It's a a real thing, especially in FL where fraud is literally everywhere.

[Jorge Vazquez]

You first have to do reverse engineer to figure out your future income when you retire and figure out the gap or supplement needed... "Five years" is not a long time, so you will have to be super aggressive to make this happen. More often than not, you will have to do some of the legwork and get your hands dirty yourself to maximize your spread. Any mistake can take you back. But I would add a combination of BRRR and AIRBNB/Corporate rentals...

[Michael Haynes]

Hello Derek Segesdy, Your in Riverview and I sold my four Commercial lots in S. Tampa last year to pay $175K Cash for a 3/3 1600 sq. ft. Townhome with garage and pool in Valrico. I took a year to Search online for every area around Tampa Bay and all types of housing and lots. I am selling my 12 year Rental house that I just lived in for three years to make it a Tax-free Sale of my Residence. That is the safest way to do one Flip at a time. I listed it for $25K more than I was going to ask for By Owner. The Agent had just built a new 3/2 without a garage on the corner and sold it in one week. She got an offer for $227K within an hour the first day and I have accepted. That Buyer is pre-approved for FHA $250K and is begging to buy. 30 days to Close and I will clear about $215K. That puts me in your situation...what to do with the Money? All my other paid off properties are in Brazil and I need at least $50K to get back there and rehab the apartments etc. Bigger Pockets has a site that shows you what to do. Study all that there is on BP and start networking and learn to do your Searches each night. This is the blog Build $1M Net Worth Through Real Estate With Five Purchases in 7 Years. https://www.biggerpockets.com/...

[Jeremy Kloter]

@Phil Bach LOL, he has a good point. I'd use the $100k as a down payment and get your feet wet on a small home or duplex to start. Happy to chat more.

[Nate Sanow]

Welcome to BP and best wishes starting out. 

[Eliott Elias]

Flip 3 properties and pay two four plexes off cash, you can live from that money. 

[Henry Lazerow]

All these people saying flips LOL he has never done a real estate deal statistically he will lose money flipping yes most flippers lose money. You need a great team in place who can do rehabs cheaper then your competition and to know the market well for exact ARV. Or 1031 in a year lol do you guys actually think a property will apreciate in 2022 enough after close costs to 1031 into a bigger deal 1 year later? Prices are actually trending down/flat right now not up.

Just buy a 4 unit on a fixed 30 year loan in a class B area that cashflows. You aren't going to retire from $100k but it can cashflow and compound slowly over time. This is the best option for your first deal. 

[Bob Stevens]

Quote from @Derek Segesdy:

Hey BP community. I live in the Tampa area. I'm brand new to REI and am just getting my feet wet with the language and techniques. Trying to learn the numbers as I go and understand how to evaluate a property. I'm not dead set on a type of property or investment strategy, BRRRR, flip, STR, LTR, SFH, MFH are all options at this point since I have no experience. My goal is to acquire enough properties to create cash flow that will allow me to retire from teaching in 5 years. Would love to hear your advice! Thanks.

4 properties at 100kis each, so 25k down per, This will create about 5k a month in gross income and about 25% COC, All the best

[Eric Fairchild]

If you would like help with financing in Florida, I would love to talk to you about options.

[Nicolas A. Scaron]

Derek,

How active or passive are you looking to be with your investments?

[Paul Moore]

Hi @Derek Segesdy! I see that you posted a few years ago. Any progress to report? It sounds like you were off to a good start with the advice you got above. 

I would consider a different route. If you have a lot of time off as a teacher, you may want to consider joining a syndication mentoring group. Find a solid one that will teach you how to partner with others to find properties like self storage, RV parks, multifamily, or mobile home parks. I fear it might be quite difficult to reach your goals without leveraging partnerships, other people's money, etc. And with little experience a mentor could teach you a lot and give you the opportunity to partner with them. Happy investing!