All Forum Posts by: Trevis Kelley

Well, I have read a ton of information in the past month.  I am investing in a small town, trying to gain some cashflow before moving to a bigger town to get multi-family properties.  I think I have some of the analysis fundamentals down for buy and hold properties.  I have a spreadsheet I created to use to analyze these deals, but I have no idea how to upload it, so I will just list what I have.

2br 1ba single family home I found on Craigslist as a FSBO.

Asking Price: $21,500

Place is currently rented for $475 (although market is at $525 for similar properties).

Price I would try to get it at:  $15,000

Been on Craigslist for at least 200 days (verified by the fact that I saw same property with same owners back in March).

I think I could get it for $15,000 after looking at property with owner and how motivated they are to not be landlords anymore.  They are also living out of state, husband comes back for 60 days to show the place and then goes back.  Don't know exactly how often this happens.

Would ask for 100% seller financing (They own it free and clear) and 0% interest.  Don't know if I would get it.  Have enough cash on hand to pay asking price (didn't let owner know that, though).

Here is my analysis (at $21,500/100% financing/5% interest - to make sure cashflow works no matter what I can get):

Mortgage Payment (15 year):  $170.02/mo

Taxes (verified by assesor's site):  $37.50/mo

Insurance (got a quote from my current insurance provider): $45/mo

Maintenance: $100/mo

I would do my own property management (I am already managing 4 properties for my parents and love every minute of it - all 60 I spend per month or less).

Total monthly outlaw:  $352.52/mo.

Monthly cashflow at $475/mo rent:  $122.48 for a cap rate of 7%.

Other thoughts:  What I am showing above is a worst-case scenario.  I am expecting to do better.  The reason I am small is because I can use this deal to maximize my money.  The home is well-maintained.  The home is priced (at asking price) about $5-$7K below what I see everywhere else for similar properties.

Problems I see:  No real good exit strategy if I ever need to get rid of it.  The market in my area is depressed and difficult to sell out of.  Rental prices are decent based on a nearby military base.  Lots of people who don't want to buy because they are moving all the time, but still need places to live.  I don't see rentals dropping any time soon, neither do I see the market for selling properties to go up.

Thoughts?  Anything I should look at that I missed?  Thank you to everyone here!

@Hattie Dizmond

Thank you very much for the outlook.  I think I have just gotten bogged down in all the information.  I think I am going to head over to the analysis forum and throw down what I am looking at.  Might as well get into it and start working toward my goals... instead of just pining for them.  Thanks again.

I am somewhat new to real estate investing, and have been reading this site and all the books, blog posts, podcasts, forum posts, etc that I can get my hands on.  It seems like everyone is trying to pull new investors in a thousand different directions.  I will read a book that says that I need to treat real estate investing as a business and get a business plan, projected financials, LLCs, etc.  Then I will read a blog post that says that you need to sit down with a lawyer, CPA, agents, mortgage brokers, etc.  I will then read a forum post that says new investors waste too much time with stuff that doesn't matter.  There is just too much information and way too much conflicting advice.  Can anyone give a straight answer to what is important when you first start?  I am trying to get into buy-and-hold single and multi-family properties.  There is what I see as a great deal on the market in my area right now, but I am paralyzed by all the other things I am reading about having a team, contacts, business plans, LLCs, contracts, lease agreements, etc, etc, etc.  So, being that I have some money and some education (and a potientially great deal), am I just dangerous without the rest of it?  My instinct is to just jump right into things, but I know that sometimes that has hurt me in the past.  Trying to learn from those past mistakes.  What is really important?  What can I skip?  Should I be posting the potential deal to see if you guys agree with my analysis and just jump right in?  Feeling overwhelmed and under-utilized at the moment.  I just want to go!

@David Hunter  I would be interested in single and multi family rentals.

@Bill S.  My goal would more be a community presence than online.  My market is a town of about 50,000 and the surrounding area.  I would be using some local online advertising, but for the most part, I am only interested in building a business in my local area.  I am eventually wanting to move to Colorado (Boulder area), but that is later down the line.  Until then, I want to learn the real estate business, make some money, and build some equity.  I would also like to learn what I can about building my local brand, so that I can establish one in Colorado.  I am trying to learn what I can before I get started.  It's just how I operate.  I have given myself a 6 month timeframe to start investing in.  Once I get to 6 months, I have learned enough and I am going to go out, evaluate properties, and buy one.

Thank you all for the advice.  I think I am getting some ideas on how to make this happen.

Dev,

Thank you for the quick feedback.  I am going to be restricted to free and inexpensive means at first.  I am looking to build a landlording business as the world of flips is scary to me at the moment.  But, I get what you are saying, and part of my monthly cashflow will be put back into the advertising budget for when someone moves out.

What I was more looking for is how to build that over-arching strategy that can be written down.  I am concerned about things like building a brand and determining what kinds of strategies might fit into that.  I feel like going out and just plastering web boards and local newspapers (or even PPC and direct mail) might be effective in the short run, but what does it say about my business in the long run?  To become a landlord that people seek out to rent from because they know my business is what I am ultimately looking for.  Kind of like the We Buy Houses brand is for flipping.  That kind of thing doesn't happen without a good plan right from inception.

I am looking to build a business that my kids and grandkids can enjoy, or at least one that has value that they can sell if it's not their type of thing.  Making money each month would be great, but I am more interested in lasting wealth.  I am not looking to build it out nationally, but if my business could become a good locally known community pillar, then I would feel like I was able to reach my goal.

Anyone else taking this approach to their marketing?  Am I just being naiive?  Is there any advice that you guys might have?  Again, thank you so much.

Trevis

I have been working on my business plan for the last week or so.  Research has been a huge part of it, though I have a good portion of the plan written now.  What I am looking for now is some help with making a marketing plan when I am first starting out.

I am not by any means a marketing expert.  In fact, I am more of a newbie when it comes to marketing than when it comes to investing in real estate.  I have assisted with being landlord for my parent's properties, and we have only used Craigslist.  What I am wondering is, what does a top-level marketing strategy look like?  I have spent many hours on Google trying to find an answer, but I feel like I am spinning my wheels.

What better place than here to find answers?  Thank you so much!

Trevis

Thank you all for the welcomes!  I am definitely overwhelmed by all the information I have found so far (that's a good thing).  I am starting with the BP blog (since I have read the beginner's guide), then I will move to podcasts, etc.

@Elizabeth Colegrove Thank you for your service!  Spouses of military don't get that much, but you guys (and gals) are really what makes it possible.  So thanks for all you do!

Unfortunately, I was not that smart while in the service.  We didn't move around at all, either.  Not by my choice.  Anyway, my 'stache began growing about 2 months ago, when I woke up to the stupidity of our spending habits.  I immediately initiated an attack on our finances.  We have cut our expenditures a lot, and if I try to do any more, my wife may just kill me.  So, I figure the best way to get there faster is to earn extra.  As we are perfectly OK living on a portion of my disability, and my wife loves her job, we are not in a huge rush.  However, I would feel better living off investments in stocks, bonds, and real estate.  So, since I am not currently doing anything else, I might as well try to make as much money as I can.  I am not in a rush to make money, but only because I know education is the foundation.  Without that, no house.

I guarantee you will see me around, I have no plans of leaving such a wealth of knowledge.  Can't wait to be asking you to help me evaluate my next deal.

Hi Rachael!

What you are wanting to do is right up the alley of what I want to do!  Rentals sound amazing to me, and I think now is the time for me to get the education.  In about 6-7 months, I will probably have the money to get started, and that will allow me time to get the education down pat.  You sound as excited as I am about the prospects!

I hope to hear of your success stories around the forum as well.  Those things really are motivating to me and really help when it comes to making me actually get off my rump and do something!

Good luck in all you do!

Trevis

Welcome Daniel!

I just joined this forum myself and I am also looking for some rental places.  I will take on flips if the opportunity presents itself, but right now that world seems foreign to me and I would not be comfortable operating in the realm yet.

Anyway, I am looking for some other real estate newbies to connect with to share stories, personal and professional growth with, and basically have someone on our side who is experiencing the same things.  I hope you would like to do that as well.

Either way, I hope your real estate dreams are realized!

Good luck,

Trevis

Hi!  My name is Trevis.  I am a disabled veteran looking to jump on the landlording bandwagon!  What I mean by that is, I want to invest in rental properties to create positive cashflows.  I would like to start out with single family houses, but I might eventually move on to multi-family units or even apartment complexes if things go well.  I am sure they will with you guys around!  I don't think that commercial real estate would be interesting to me, but check back with me in 10 years, because who knows.  Right now, though, the single family properties are right up my alley.

Back in 2002, I was living in a run-down-trailer-converted-to-a-house.  I was making minimum wage with my wife, and we were barely making ends meet (raising a child as well).  Don't ask me where all the money was going, because I don't know - I didn't budget back then.  If the money was in the account, we spent it.  I decided by 2004 that the lifestyle I was leading was not the one I wanted to be leading, and looked for a way out.  The US Air Force was hiring for tech jobs, and I was a tech nerd.  Seemed like a perfect fit.  So, I joined, and for 8 1/2 years made better money than I should have been allowed to make for the job I was doing.  I only deployed once, and that was to cushy place in Qatar.  We had swimming pools and indoor gyms.  Don't get me wrong - the job we were doing there at the time was absolutely vital, but the accomodations were nice.

Long story short (too late, right?), I was medically discharged from the military.  Bad knees, bad back, and arthritis in the hands had plagued me for a while, but I pushed through in order to keep my sweet military job.  Now, I had a new problem - my heart.  That one couldn't be ignored, so here I am.  Recently discharged and sitting around the house unable to work.  I have a ton of time on my hands, plenty of income to cover my bills and save, and a drive to work on something of my own.  I have come a long way from those days in 2002, but I have a long way to go before I get to where I want to be.

Where do I want to be? I want to replace my wife's working income. I want to replace my VA and SSDI income. I want to be able to cover all of my bills from my sweet portfolio of stocks, bonds, and real estate.

Why am I on this site in particular?  Because I love real estate.  In 2002, I purchased that house I was living in.  I loved the process so much, I repeated it again in 2007.  After a realization in 2009 that I didn't know what I was doing and relied on the realtor too much, I decided to do some reading on how to buy a house.  After being booted from the military in 2012, I felt like I knew enough to make a great primary home purchase in Herington, KS.  This purchase is the first one that has turned out well for me, and I know that it was because I am now better educated.  So, before I go out into the world to invest in real estate, I want to be well educated.  I have heard all kinds of things, but I would like to get it from the horses mouth.

How did I find this site?  I was in the Mr. Money Mustache forum, reading about others talking about this site.  Sounded great, so here I am.  I am a recently converted Mustachian, and am loving the life so far - still have a long way to go, though.

I must say that I am in the middle of reading this site's beginner's guide.  It has been great.  The mentor section had me chuckling, though, because when it talks about having to work nights and weekends on real estate, I got excited and said that I would do that without a problem.  The very thought of doing real estate deals makes me very excited and ready to jump into it, but I am letting my brain rule my actions when it comes to actually doing it.  It has to be right, the numbers must fit, and I really have to know what I am doing.

I cannot wait to meet you all!  This seems like a really great place to be!

Trevis Kelley