Why real estate investing?

Hello BP members!

I am Frank Macias. In my very first blog I would like to introduce my self and give you a quick background of who I am and how I became interested in real estate. 

First and foremost, I am a pharmacist for a children's hospital in Atlanta. I love my job, I love what I do, and I love helping people with their medications and anything else healthcare related. I am originally from Naples, FL but my wife and I are currently living in Atlanta, GA as this is the city where I attended pharmacy school. I graduated in 2017 with a whopping $210,000 in student loan debt... can you believe that?! During my first few years of pharmacy school, the debt I was racking up didn't even phase me. Besides who has time to worry about the debt and the interest you are accruing when you have to memorize the mechanism of action, brand/generic names of hundreds of drugs, be proficient with pharmacy calculations and pharmacy compounding, know appropriate therapies and dosages for disease states, the common side effects of drugs and on and on and on. Needless to say debt and accruing interest was the least of my concern.  

It wasn't until the end of my third year in pharmacy school that the cost of education and my overwhelming amount of student debt was finally sinking in. And believe me, it was sinking in so hard it could sink the Titanic, again. The debt became a constant nagging thought that was always eating away at me, always hanging over my head, I could feel the weight on my shoulders, the monkey on my back (yes I get carried away with idioms). And to be honest the feeling comes back to me from time to time still is to this day. During the end of my third year, I began to explore ways on how to minimize my student debt while in school and methods to eliminate it after school. 

In my final year of pharmacy school I had long commutes to several of my rotation sites. I began to search for podcasts that talked about personal finance and reducing debt to make the most of the "wasted" commute time. This is where I found the famous Dave Ramsey Podcast. I would listen to the Dave Ramsey podcast religiously on my commutes. I listened  feverishly  and this went on for a solid year. The Dave Ramsey Podcast was great because  it taught me the basics of personal finance such as having a budget, living below my means, debt payoff strategies, retirement account basics, having an emergency fund, getting life insurance, etc. His podcast provided me with enough knowledge to build a solid financial foundation and an excellent starting point to take on the student debt. I got to a point where learning from the Dave Ramsey podcast plateaued. I realized that I learned all I could from his podcasts, but I yearned for more knowledge... This is when I began to branch off from the Dave Ramsey philosophy and explore other philosophies of personal finance i.e. Robert Kiyosaki's philosophy on leveraging debt for your benefit. 

One day over coffee and tea my wife had the idea of buying a house sooner rather than later. Our original plan was to buy a house but not purchase while we were still paying off the student debt. Our goal was to be debt free in 5 years and during those 5 years we would be putting money aside for a down payment as well. Our thought was at the end of 5 years we would be debt free and have at least 20% down to purchase our home. Because you know, that was what Dave Ramsey said to do! I was hesitant at first because it violated Dave Ramsey's philosophy but my wife is convincing and made a very good case for it financially. Once we laid out the plan on paper and ran the calculations we found that purchasing a house now as opposed to waiting until we were out of debt would be better for us in the long term. It didn't take much else to convince me that buying a house now would make better financial cents... see what I did there? 

When we first started our house hunt we had specific criteria in what we wanted. We wanted that "American Dream" house. You know what I'm talking about, it's that 3 bedroom, 2 bath, house with a big open kitchen, a garage, a fenced in backyard with a shed out back in that perfect neighborhood with awesome neighbors and in an excellent school district. The thought of owning that perfect home was intoxicating. I became obsessed with house hunting and spent hours and hours looking for that perfect house. We quickly found out that the house we wanted was costly. Not un-affordable but costly in the sense that it would jeopardize our financial goals since it would stretch our monthly budget to its limits. This forced us to lower our standards and expand our criteria. We began searching for cheaper houses, condos, villas, town-homes, new constructions homes, you name it. We were basically looking at everything on the MLS. Our main concern at this point was cost, we wanted the best value for our money while still having some traits of our dream home. But many of the cheaper houses needed rehab work, were in rough areas of our town, other properties were in communities with HOA's that had rules and fees that were borderline fascism. 

We became overwhelmed and frustrated with all the properties listed but we couldn't decide what type of property would be best for us. It got to a point where my wife asked me in frustration "What is the best thing for us to do?". I replied, "We should buy a duplex. Live in one side and rent out the other. That'll shrink our living expenses down to almost nothing." I recall mentioning this concept to my wife early on in our search but she rejected the idea... I am sure she will deny that conversation ever happened. Anyways, I digress... after offering my suggestion (the second time) it piqued her interest. I ran some mock financials of house hacking and it convinced her that this house hacking idea was in fact a genius idea. 

The idea of house hacking was first introduced to me on a podcast called "Radical Personal Finance". The host of the show had a guest where she house hacked her way out of student debt. That day on, the idea of house hacking excites me because ultimately it paves the road to reaching two of my goals - paying off student debt and acquiring a rental property. The host of Radical Personal Finance mentioned a podcast by the name of "Bigger Pockets" which by his account was the best resource for anything involving real estate investing/purchasing. Once I got into Bigger Pockets (BP) I realized I hit a gold mine of information. Discovering BP has been hands down the best resource for learning anything involving real estate. I have learned so much from their podcasts, articles, and posts that I feel confident in analyzing properties. In fact, I have gotten to a point where I can simply look at the listing price of a property, the location of that property in my hometown and know whether or not the property will be a deal or not (Thank you 1% rule and to BP). 

And so here we are today, at the time of me writing this we are still in Atlanta, GA and plan on moving back to our home town of Naples, FL in less than 25 days! Our plan is to rent an apartment short term (6-8 months) while we search for a multi-family property. We are looking for a duplex, triplex, quadplex, our a property with 2 houses on it. The majority of the properties we see are duplexes. Most of them being overpriced and not even close to cash-flowing at their opening asking price. Naples has one of the most expensive real estate markets in the country and is highly dependent on the seasonal influx of "snowbirds" making it a destination city. The prices of properties here seem to be exaggerated but nonetheless we will not buy unless the property fits our investing criteria (more on our criteria in a later post).  We have not been pre-approved yet since we will be changing jobs soon and our mortgage lender will require us proof of employment and all that good stuff. So in the meantime I have been watching the real estate in Naples/Bonita Springs area very closely, analyzing as many properties as I can and continuing to gain knowledge from BP podcasts, articles, members posts, and webinars. 

My idea for this blog is to periodically make posts as significant things happen during and throughout our search for our house hacking property. Please share your thoughts below, thank you for reading.