Real Estate Broker · Los Angeles, CA · Member since 2018 · 193 posts · 346 votes
I’m so excited because I just closed on my 10th out of state unit today! I did my first deal ever exactly 10 months ago, thanks to the Bigger Pockets podcast, a lot of library books and a lot of good people. Before this I was an environmental education teacher for over a decade, and last year I got hooked when my friend had me listen to the podcast. So when yet another grant-funded position ended earlier this year, I chose to take a break from full time work and focus on RE instead...and it’s been so amazing!!
On my break I took classes in construction management and spent a lot of time going to meetups. Now I’m working as a project manager for a GC to get real world experience (building a ground up affordable housing development in LA), and I’m getting my real estate license. I also donate 1% of all gross revenue (not just profits) from real estate investments to affordable housing and community development, and am partnering with other investors to create a social equity financial model for our rental properties. More on that when I set up the blog.
So my commitment to social justice hasn’t gone away, it’s just transformed into this new field (new to me) of real estate investing. I’m also really passionate about my non-profit colleagues finding their way to financial freedom as well. (If you can only read one book, read Your Money or Your Life). So far I’ve got 4 houses and 3 duplexes with none of my own cash invested except the first deal, and my goal is to be at 30 units with at least $60,000/year of net cash flow within the next 3 years.
My wife loves me AND is sick of me talking real estate all the time lol so if people ever want to catch up and talk RE I’m in! Some other folks in LA like @John Koster and @Shiva Bhaskar and I like to connect on out of state investing over beers every couple of months, and a new thing we’re talking about too is Opportunity Zones.
So anyway, I haven’t really shared too much of my story here and I just wanted to spread some inspiration for other go getters and life changers on the forums.
As @Alexander Felice says, I think you’ve got to be a little obsessed. And take action! Thanks for all those who have supported me so far and to many more!
Amazing! You have accomplished so much in just 10mths. Congratulations!! Mind sharing how you funded and structured your first deal/rental purchase and how you were able to scale so quickly?
@Sammy Lyon I’m a teacher too, waiting to take action on my first deal. Feel like I trained for a marathon but dont know where the start is! Advice on getting the ball rolling out of state?
OMG, congrats! I am inspired. I am a super newbie that is still listening to podcasts and reading. I just want to do my first deal on a multi-family. Any advice to get me started? I am going to try to use the equity in my home for my first deal. I still haven't figured out how to use other people's money.
@Sammy Lyon what are some other books you recommend?
just some of the few that stood out to me in 2018. read all these from the library and more before I ever got my first property. *starring the best ones!
Amazing! You have accomplished so much in just 10mths. Congratulations!! Mind sharing how you funded and structured your first deal/rental purchase and how you were able to scale so quickly?
Hi Kristin, thanks!
For my first deal I went back and forth for a long time whether I should do a BRRR or just buy something that didn't need much work. Since I had been saving for years to buy a house in LA, I had ~$50k saved (still not enough for a house in LA but at least a nice chunk toward it). When I knew I was going to invest in RE for real, I hunkered down and started saving more intensely with the goal of saving 50% of my income. My wife and I tracked our spending and income every day & month (as outlined in Your Money or Your Life by Vicki Robin) and averaged about 35-40% savings rate. To reduce risk, my goal was to save a 6 month runway of living expenses that would not be touchable — I told myself I could only invest any money above that 6 months of savings (if you know your actual monthly expenses you can just multiply that by 6 to get that number, @scott trench explains it in his book Set for Life).
However, the BRRR method involved fronting a lot of cash in a new market, managing renovations from afar, and orchestrating a perfect refinance to get my cash back. So after 9 months of researching, networking and asking advice from other investors in person and on the forums, I decided to buy a "rent ready" property off the MLS. It had the benefit of turnkey investing without the markup involved from the turnkey operator, and allowed me to build a team that could carry me into future deals. It felt like a perfect middle ground between buying as a passive turnkey investor, and buying as a very involved BRRR investor.
I flew out and met with several realtors, lenders, contractors, property managers and other investors. After visiting I knew exactly what neighborhoods and streets I wanted to be in, and what price range would make sense there. I had already analyzed dozens of deals from afar, so when two weeks after my visit the broker I liked sent out one of his new MLS listings to his email list, I knew it was the right deal. Then when I researched the seller on the County website, it turned out to be owned by a BiggerPockets member who I had already been talking to!! He was selling to pursue other opportunities in his market. I made an offer through our realtors and away we went!
It was definitely a rollercoaster, those 30ish days of escrow, and I got to see the whole process from start to finish. From finding surprises on the inspection report to getting a slightly lower appraisal than expected, I also learned a few negotiation points. A few times I wasn't sure if I would go through with it, but it felt like following through on a good first deal would catapult me into more great deals. The numbers made sense even with a few (very normal) hiccups. My realtor who is amazing held my hand the whole time. My lender explained everything to me in detail. I didn't even know who my title people were because it didn't seem to matter (since then I have learned that it does). So I felt very grateful to have a mediated experience buying my very first property ever, in a state I had only been in once (and driven through a couple times decades ago on road trips), rather than starting out with a long distance BRRR.
Talking numbers I ended up getting the house for $46,000 — a 2 bed 1 bath already rented for $850/mo to a great tenant. I put 20% down, and with closing costs and the little extra I had to bring to closing to make the difference between the purchase price and the lender's appraisal, I invested $14,000. That felt like a solid amount that got me into my first deal and left me with plenty of reserves for emergencies. Having reserves is what has helped me do more deals, with a JV partnership, hard money and private money, with none of my own money since that first one. It's really all been building relationships and letting everyone I know know that I am a real estate investor. When they hear how much I have researched and my actual numbers, they've felt comfortable working with me. Luck = opportunity and preparation?
I feel comfortable using other people’s money right now because 1) I treat it more sacred than my own and 2) I know that in case of emergency I can cover any unexpected expenses if I need to. I know people invest with “no money” but I do think there is a difference between USING none of your own money, and HAVING none of your own money. That isn’t a risk I personally would be willing to take!
@Sammy Lyon this is very inspirational. Thanks for sharing your story. Which markets are you focusing on?
Hi Yaniv! I researched a lot of markets and talked to investors in each - Memphis, Indianapolis, Kansas City, Jacksonville, Cleveland and Columbus.
I ended up choosing Ohio. Among other things the state has landlord friendly laws and strong LLC protections. I visited both Columbus and Cleveland and chose Cleveland due to the price to rent ratios, the expanding healthcare industry and the upside potential (getting into the real estate game late into a cycle, I wanted to find a city that had not reached their pre-2008 peak). Obviously all real estate is a risk, but I'm glad I was able to get started in a market that made sense and had strong cash flow. I'm not saying it's the "BEST AND ONLY MAGICAL MARKET!!" to be in, but it has solid economics with several Fortune 500 companies headquartered there, and honestly I just met really good people I felt I could trust while being out of state.
I am also looking to expand to the Southwest when I'm ready and stabilized, in the next year or two.
I’m a teacher too! If you ever make it to Seattle we have a few good breweries!! Thanks for sharing your story... you’re still teaching & inspiring others btw, from an elective area of expertise ;-) Thank You!!
Exactly! Once an educator, always an educator ;)
I will def reach out if I come to Seattle! Are you investing there or elsewhere or not yet?
Congrats that is so amazing and inspiring. I purchased my first investment property 2 months ago and just closed on my second property last month (duplex) and looking for the next!
I’m trying to find the best way to partner and find OPM, do you have any specific recommendation?
@Sammy Lyon such an amazing story and journey! I think we have some similar values (also graduated with a degree in ES and I’m a teacher) so it’s refreshing to hear you say and action those values while still being able to improve the quality of your life and those around you! Wishing you all the best and that I was in LA to also catch up to talk RE😊
This is really inspiring to me. I'm in LA too, and just getting started on my RE journey. Would love to meet up sometime to talk real estate, and about your experiences--assuming that your wife is tired of hearing it. lol. I'm up in Santa Clarita valley and work in the San Fernando Valley, so either place is good, or we could meet somewhere else convenient or you. Looking forward to connecting.
In the spring Sammy responded to a post I wrote. I had not purchased a property yet, but was eager. Since then, Sammy has been nothing short of amazing. We are both investing in the same market, and he has walked me through every step of the process. I could not be where I am today (getting ready to close on my first SF) if it was not for Sammy. He has literally taken me by the hand and shared every experience, every connection, every piece of information that he has with me. I am forever grateful for Sammy, he has helped me turn a dream into reality. I look forward to watching him grow on many levels. Keep your eyes out for Sammy, he is one of a kind and will continue to do great things!
Lisa - it’s been so fun to get to know you and be on our RE journeys together! I’m so excited for your first deal closing soon and am always happy to help in whatever small way I can, from just a couple steps ahead.
@Sammy Lyon I’m a teacher too, waiting to take action on my first deal. Feel like I trained for a marathon but dont know where the start is! Advice on getting the ball rolling out of state?
Hey Bradley fellow teacher! Advice: Research 3-5 markets and talk to a few people in each. Read articles and economic reports, census data, job trends and employers. Then pick 1 and talk to dozens of people who live there and/or invest there (BiggerPockets, etc) and ask lots of questions. Set up a visit and meet your potential new colleagues and team members and drive alllll around so you get a good feel for streets and neighborhoods
Go to lots of meetups and build relationships...ideally by then you will know so so much more and have a better sense of your next steps!
Wow that's really inspiring! Congrats on getting started! Just curious, I've been seeing things on the news about California & how the quality of life isn't so good there.
How much of that is true, & has it affected you finding deals & finding tenants that aren't going to lower your property worth? What kind of screening methods do you use?
I'm always down to talk real estate as well since only couple of my peers are into that sort of thing!