Can't stop thinking about rental properties

21 Replies

So I'm at this new job today, and everything is being thrown at me. 401k saving, dental, vision etc... Anyways throughout the 8 hrs shift I could not focus on the task at hand but rather having rental properties. I feel like I can be great in this field. So I guess my question is; what made you folks go into real estate? One thing you like? Dislike?  What are somethings to cosider about a property before evening looking inside? 

Ps... I'm still waiting for my first deal (A landlord once told me patience is the name of the game) 

Kheri,

I am a newbie(only 2 years of being a landlord). But what made me to take this risk and jump in, is exactly the feeling you probably get when you have to sit in a chair staring at a computer for 40+ hours a week. Then fight traffic on the way to and from work. And then knowing a boss, that doesn't like you can fire you for any reason. It's an awful feeling.

I am nowhere near being able to quit my job, but i have made a few steps in the direction or not being so reliant on my job.

@Kheri Mourad

I'm with you. I've been a landlord for a bit over a year with a full time job. I'm in the process of buying a home but if I wasn't I would be shopping around for another property. Its addicting. Once you buy one you want to keep buying. All I can say is stay focused and save money to buy properties! Good luck.

I wish someone were throwing dental, vision, and 401's at me! You may be working for someone else but be sure to use that job to your advantage by leveraging your W2 into a nice loan package. 

Best of luck at the new job.

Originally posted by @Kheri Mourad :

So I guess my question is; what made you folks go into real estate? One thing you like? Dislike?  What are somethings to cosider about a property before evening looking inside? 

 I went through some rough financial problems during the recession which included being unemployed for nearly 6 months and deeply in debt. While sitting at home unable to find a job and broke, hoping my benefits wouldn't run out before I found something, I became very jaded toward the world of jobs and work, where your livelihood is totally dependent on factors out of your control. I eventually found a job that paid half of my prior salary, but things would never be the same.

Of course I read Rich Dad Poor Dad, but that book did not have the biggest impact on me. It was the book, The Millionaire Next Door that changed everything for me. It never occurred to me that most of the people we think are rich are actually not rich. 

We live in bizarro world where the wealthy drive economy cars and the lower and middle class drive luxury cars. Where the wealthy shop at Walmart and the lower/middle class wear the newest expensive fashions. I know that isn't the case for all wealthy people, but in all honesty, I never knew there was another way to live.

I got into real estate because I want to be The Millionaire Next Door. Financially secure, not dependent on an employer paying me. Able to live off of my wealth indefinitely without having to work again.

Read! Educate yourself. Some of the books I read early on, I didn't really get until I had done some deals.  I don't recommend buying expensive weekend seminars. Just read books on real estate investing and if you need specific clarification, use this forum to ask. Learn what property is worth in your area and how much rents are. After a while, you will know a good deal when you see one.

Yup, its addicting. I have two rental properties so far.

I like: when its calm and peaceful and those rent checks show up at the beginning of every month. I like researching properties and analyzing deals.

I dislike: Unexpected tenant turnover. It happens, and I've allowed for it in numbers. Doesn't mean I have to like it.

2 years and 8 rentals in. Best decision I ever made was to take the plunge. It's gets tough juggling the day job and real estate, but the feeling of growing my real estate portfolio is so much more gratifying than any accomplishments at my 9-5...... It's a means to an end. good Luck!

Thank you all for the response. @bothanythony's: I also read Rich dad poor dad but, haven't read the millionaire next door. 

What books would you guys recommended? 

When you're at your job, give it your full attention!  That's what you're being paid for.  Then focus on real estate on your breaks, lunch, and after work.  When you're ready to leave your full time job, you can leave knowing you gave your employer your best.

@Matthew Cole - I have two rentals after seven months but now I am tapped out of cash that I am comfortable spending. How did you finance 8 rentals in 2 years? 

Financial and time freedom. Plus being your own boss. Joining real estate investment clubs is a great start. Some schools offer a home inspection course. That would be a good route to estimating repair cost which could make or break your deal.
Financial and time freedom. Plus being your own boss. Joining real estate investment clubs is a great start. Some schools offer a home inspection course. That would be a good route to estimating repair cost which could make or break your deal. Also u might be able to borrow from your 401k to invest depending on the state you're in

@Kheri Mourad

Wanting to diversify my 401k funds in other investments besides stocks and mutual funds sparked my interest in investing in real estate. I currently own 12 real-estate properties in my self-directed 401k for example. 

Originally posted by @Kheri Mourad :

What made you folks go into real estate? One thing you like? Dislike?  What are somethings to cosider about a property before evening looking inside? 

Ps... I'm still waiting for my first deal (A landlord once told me patience is the name of the game) 

I decided to get into real estate to secure my financial future and stay in charge of my destiny. 

I like money. 

I dislike annoying/needy tenants.

You should consider the numbers and location of the property and decide if it is worth viewing or not. Many properties are priced unreasonably and even if the property itself is great, it wouldn't be a good investment.

Christopher

Originally posted by @Kheri Mourad :

Thank you all for the response. @bothanythony's: I also read Rich dad poor dad but, haven't read the millionaire next door. 

What books would you guys recommended? 

I would recommend Millionaire Real Estate Investor by Gary Keller. I'm reading it right now and it's absolutely fantastic. I'd also recommend listening to BiggerPockets Podcast #113 where @Joshua Dorkin and @Brandon Turner talk to Jay Papasan, one of the co-authors of that book.

Best of luck with your future investments!

-Ben

@Kheri Mourad real estate is addicting!  My most used apps on my phone are Redfin, mortgage calculator and BP!  I've been a landlord since 2009 and slowly accumulated 3 properties 7 doors total.  It's tough to do when your a stay at home parent with one spouse working, trying to save money to cover your personal expenses, your kids expenses and buying real estate in Southern California (it can be done).  However I got into it because my father in law who came to the U.S. And worked as a dish washer, and my mother in law who dropped out of 5th grade to work in the farms, came across an opportunity to buy a small house in the desert for roughly $30k and rented it out to approximately 3 tenants over the course of 10 years (wish I had that low turnover), sold that home at the height of the market and had enough to pay off their existing home and a good retirement cushion.  Living mortgage free at the age of 55.  And they only did that with one house, imagine the possibilities with the 3 properties I own and the more I plan on accumulating.  My husband still wokr, we still save and budget so we can finance our next deal.  That's why we got into real estate.

Focus on your job, do the best you can, get promoted, earn bonuses, pack your own lunch, and save every penny for your next deal.  Real estate is not a 9-5 job, it's 24/7 hobby that you will enjoy and be excited about, and the harder the drive, the bigger the reward, the sweeter ther retirement😀 

Best of luck!

thinking is one thing.   wait till you feel the high of actually getting rent.

Originally posted by @Sandy Salazar :

@Kheri Mourad real estate is addicting!  My most used apps on my phone are Redfin, mortgage calculator and BP!  I've been a landlord since 2009 and slowly accumulated 3 properties 7 doors total.  It's tough to do when your a stay at home parent with one spouse working, trying to save money to cover your personal expenses, your kids expenses and buying real estate in Southern California (it can be done).  However I got into it because my father in law who came to the U.S. And worked as a dish washer, and my mother in law who dropped out of 5th grade to work in the farms, came across an opportunity to buy a small house in the desert for roughly $30k and rented it out to approximately 3 tenants over the course of 10 years (wish I had that low turnover), sold that home at the height of the market and had enough to pay off their existing home and a good retirement cushion.  Living mortgage free at the age of 55.  And they only did that with one house, imagine the possibilities with the 3 properties I own and the more I plan on accumulating.  My husband still wokr, we still save and budget so we can finance our next deal.  That's why we got into real estate.

Focus on your job, do the best you can, get promoted, earn bonuses, pack your own lunch, and save every penny for your next deal.  Real estate is not a 9-5 job, it's 24/7 hobby that you will enjoy and be excited about, and the harder the drive, the bigger the reward, the sweeter ther retirement😀 

Best of luck!

 Loved the Redfin shout-out! :) Also, thanks for the encouraging personal story - a greatest motivator I could have asked for to start my day. :)

Originally posted by @Kheri Mourad :

So I'm at this new job today, and everything is being thrown at me. 401k saving, dental, vision etc... Anyways throughout the 8 hrs shift I could not focus on the task at hand but rather having rental properties. I feel like I can be great in this field. So I guess my question is; what made you folks go into real estate? One thing you like? Dislike?  What are somethings to cosider about a property before evening looking inside? 

Ps... I'm still waiting for my first deal (A landlord once told me patience is the name of the game) 

 Sounds like you've got the obsession that it takes to be successful in real estate (or anything else for that matter). 

Like: create your own job by generating streams of income - some passive, some not so passive 

Dislike: well, you've got to be psychologically strong or else it's going to eat you up. Always got to be evolving approach and learn from sites like BP 

Originally posted by @Kheri Mourad :

So I'm at this new job today, and everything is being thrown at me. 401k saving, dental, vision etc... Anyways throughout the 8 hrs shift I could not focus on the task at hand but rather having rental properties. I feel like I can be great in this field. So I guess my question is; what made you folks go into real estate? One thing you like? Dislike?  What are somethings to cosider about a property before evening looking inside? 

Ps... I'm still waiting for my first deal (A landlord once told me patience is the name of the game) 

 It's something I know. I can construct, fix, or maintain virtually anything inside of or attached to a house. That makes my costs of rehab and repair extremely low, meaning I can get into a house that others would have to avoid and make it make money. I also like the "sure thing " (as sure as one can get) of the principle protection of real estate versus other investment vehicles such as the stock market. What I like most? Seeing that rent money appear in the account! What I like least? Dealing with people, I suppose, though I have tried to mitigate that by having really good tenants, for which I pay for in having homes that are slightly below market rates to attract/keep the best people. 

I know this will vary depending on where you are, what houses rent for in your market, taxes, etc, but for me I consider a deal if I can make more than 10% annual return after expenses (interest if applicable, taxes, insurance), not including capital costs since I perform nearly all of those myself. Thus, in my head or looking at a place, doing quick numbers, I use the amount of rent as a proportion of the house cost to make a decision - a $40k house should generate at least $400 per month, $50k house $500 per month, etc. That is 12% before expenses. If you have to pay for most/all rehab, or repairs, you will really need to find some smoking deals to get in this range. Or you can be comfortable with a smaller profit margin. 

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