All Forum Posts by: Jeremy Mangen

Hey there! I'm a new investor and I just threw my savings and capital into my first house hack here in the Twin Cities. It's a non-conforming triplex where I will be living in the top attic unit that's not legally a unit and renting out the other two legal units. I should be living for free and cashflowing ~$300 on this first deal. I truly couldn't have done this without a wonderful investor friendly realtor and the help of the local REI meetups and of course the BP Podcast.

Now that I'm significantly reducing my monthly expenses (currently paying $825/m on rent near Downtown Minneapolis) and making money and learning how to be a landlord, I think I'm getting myself off to the right start as a real estate investor. I'll be making an extra 1100-1300 a month plus continued raises at my current job, so I'll be able to save and pay down a lot of debt pretty quickly. 

The obvious next step is to pay off all my debt, including school loans, car payment, credit cards, medical... 2017 and 18 were rough years for me. But I'm not content with just sitting and paying down debt. I'm a very driven and action oriented guy. I tend to move fast and take massive action to prevent myself from getting into analysis paralysis, self doubt, or boredom. So sitting around for a year just saving and paying down debt sounds like a horrible idea to me, though it still will be a big part of my plan. 

I'm trying to figure out how to use leverage to continue to drive my investments. I have a few ideas but I'm looking for input.

1. Take out an unsecured line of credit and use it to purchase some more investments and use the BRRRR strategy to keep scaling up.

2. After 6-9 months of managing my new rentals, look to join a property management firm in some capacity, working part time so I can learn the ropes with the end goal of starting my own property management firm. I'm considering starting my own PM firm because I endlessly hear about how horrible most of these firms are and I truly believe I can do a much better job than many of them, but first I have to learn the ropes and test it out to see if I actually enjoy it as much as I think I will.

3. Try to find a more established local investor and link up and see if there are areas I can help provide value to them. 

4. Get my real estate license and explore the option of making money that way. 

5. ??????

Essentially I'm a new investor who has just tied up his capital and is trying to figure out the best, most efficient way to scale up from here. If truly the best option is to sit on my laurels and use my extra income to pay down debt and save, not investing again until 2020, then I'll find a way to make it work. But I like action and tend to believe there are better options out there. 

This is going to come up and it's important I outline it, so here's my why/goals.

Put simply, I'm an entrepreneur, everything in my personality draws me to being my own boss and taking risks and playing the business game. I have to be able to provide for my future family above and beyond the average, I can't handle just living a life of "average." I will not be the old grandpa living in a nursing home because no one else can afford to care for me. And I owe it to my friends, family, and community to live up to my potential and contribute my talents to the world. The classic Cardone, "Success is my duty" mindset, combined with the idea that I help no one in life by simply being mediocre, and finally my happiness is only truly found in struggle and challenge, I'm never happy when I'm dormant. Which is why I'm afraid of being dormant for a full year. I'm not looking to be a mom and pop investor. I'm looking to build a lot of wealth. I've set some scary goals for myself, following Cardone's 10X rule, and I've always been a big dreamer. I'm looking to run a huge REI business. But talk is cheap and I'd rather do the thing then talk about it. Which is why I'm here on the forums, cause ya'll are extraordinarily smart and I know many of you have gone through similar periods and can help me figure out which actions to take, rather then just reading books and listening to podcasts (which I've done a TON of).

How have you handled that "first investment" hump? Knowing the majority of investors have 1 or 2 properties and either very slowly or never really scale outside of that, how do I avoid getting stuck in that trap? 

Any advice/tips are greatly appreciated and feel free to correct any assumptions as much as you want! I'm still new, young, and dumb with a lot to learn. Thanks!

@Cam Jimmy looks gorgeous! You absolutely killed this. Great job! Did you have the bank REFI lined up before you purchased the home or did you find a bank during the rehab process or did you wait until after you were finished with the rehab? I’ve always wondered when BRRRR investors get that refi lined up because it’s a scary prospect being left with a higher interest loan for an extended period due to difficulty in finding a bank to refi you out.

@Scott H. Read through every comment so far and wow there are a LOT of smart people on here. I agree with all of them, with one caveat. Give it a shot. You literally don’t know until you try. You might find that you love it! But if not, it’s not too costly to back out and either sell the home or hire a property manager and focus on non-hold strategies from here on out. I’m in a similar position walking into my first multi-family house hack (close in a week) and I’m similarly frightened. But I mitigate those fears by reminding myself that there are some really bad and stupid landlords out there and if they can do it why can’t I? I also surround myself with other brilliant investors/landlords both from BP and from my own circle so I can draw on their rich experience. Most of the situations you’ll run into you’ll discover other landlords have already paved the way through to various solutions and BP is a gold mine of advice for every situation that could come up. My 2 cents is give it a shot. Play the game before deciding you don’t like it. But be honest with yourself and if you’re not cut out for it, don’t force it and move on to the next RE investing opportunity! Good luck!

Thanks for the help and advice so far! 

This is definitely not a friendship I want to lose, and I'm willing to take all the precautions to make sure that everything is laid out in fine print legally so we can have a better chance at a successful partnership.

It definitely sounds like I should be talking to an attorney AND a CPA. So that's what I'll do.

@Basit Siddiqi Thanks for the advice around what things to discuss with my partner. I'll definitely be doing that with him and have an in depth conversation with him both before and after I meet with an Attorney and CPA.

@Jake S. I really appreciate the recommendations! I'll definitely be checking them out.

@Heidi Pliam That was a lot of great advice! I believe those horror stories. I'm adult enough and have been through enough relationship drama to know how fast even close friendships can turn sour when misunderstandings occur. Legal documentation is meant to prevent those misunderstandings, and I care about my friendship with this person so I'm going to respect both of us by mitigating the risks to the friendship via legal documentation.  Hope to chat more with you soon about this! Thanks!

Hey there!

I'm a new real estate investor in the Twin Cities and I'm closing on my first MFH deal in December. 

I have a partner who wants to invest with me, and I'm trying to figure out how to best set up a legal real estate partnership.

My goal is to have a legally binding document that outlines roles, responsibilities, and profit splits. I've been looking around and haven't found a lot of solid information. Should I go with an attorney? CPA? Can I do it myself by downloading a document off the internet? I'm not sure.

I am aware of the cons and dangers of having a partner in real estate investing. My friend and I trust each other implicitly and we've done business together before so I'm not worried about that. Regardless, I'm not taking chances, I want a legal partnership that explicitly outlines everything. Any tips/advice on how to get this set up?

I'll tack this on here, I am also looking for a CPA and real estate attorney as I know I'll need both of them eventually in my real estate journey so any recommendations would be greatly appreciated.

Thanks!

Originally posted by @Brian Flannery:

@Jeremy Mangen welcome to the boards.  I'm a newbie myself, but the members here have been nothing but helpful.  I, too, am a powerlifter, but I couldn't dance to save my life.

Good luck!

 Now try dancing the day after a heavy leg day. That makes everyone, even the pro dancers, stumble around and step on a few toes! But I'm glad to meet so many fellow powerlifting investors! I feel there's a lot of similarities in mindset between the two, especially with the basic "don't give up" and consistency attitudes you have to take towards them.

Nice to meet you!

Originally posted by @Tim Swierczek:

@Jeremy Mangen house hacking is a great plan and if you play it like @Jordan Moorhead you can use the properties appreciation to purchase that commercial building you want.  I attend quite a few meet-ups please say Hi if you find me at one.

 Absolutely will Tim! Thanks!

Originally posted by @Jordan Moorhead:

@Jeremy Mangen glad to see another powerlifer on here!

I did the househacking thing to get started and basically did exactly what you’re looking to do. Started with duplex, bought and apartment buiding and then sold the duplex to buy more apartments.

Where do you lift in Minneapolis?

That's awesome! Exactly what I'm looking to do myself. 

I'm glad to see there are other powerlifting investors out there! I have to assume we make up a small minority. I lift at the anytime off Lyndale in South Minneapolis, though I have gone to Los Campones and several other gyms in the area. Where do you lift and how long have you been lifting? 

Hey there! My name is Jeremy and  I'm a Newbie/Wannabe investor in the Twin Cities Metro. 

I have an odd background in real estate... My parents are real estate appraisers and have been for 17 years. They started here in Minnesota but moved their business down to Arizona around 2003. I've helped them with their business and been around real estate, hearing the terminology and seeing what my parents do ever since I was 10. I've always been interested in real estate and knew that I wanted to invest in it but didn't know how. So I started reading, a lot. Which is typical for me, I'm a reader and when I want to do something I read obsessively about it. But I had no money and no prospects and no feasible way to enter the investing game, so I quit trying. That was when I was 19. I'm 27 now with a solid career and a lot more life experience (and money). I realized I couldn't keep running this rat race and chasing the typical career track, and I watched as several of my friends started investing in real estate and I thought to myself, "hey! If they can do that I definitely can too." They recommended BiggerPockets and some books such as "Set for Life" and now here I am, couple months later, introducing myself on this forum, signed up for several local REI meetups and talking to a real estate agent about finding a deal for me to house hack.

My goal is to own commercial property, starting with Apartments and seeing where life leads me from there, but that's clearly not a very feasible path to take when I'm just starting out. So, my short term goal is a classic one, I'm sure. I want to house hack a multi-unit, BRRRR it, then use the money to BRRRR another home, and then continue BRRRR'ing until I've raised enough capital to consider larger multi-unit homes or small apartment complexes, and just keep scaling from there.

I'm green as it gets but with the odd caveat that I've grown up surrounded by real estate professionals and knowing the lingo, I've read extensively on it in the past, and because my parents have always been small business owners and had an entrepreneurial spirit, they've passed that along to me. As such, I've got a passion for entrepreneurship and real estate. I've read a lot of the business and real estate books that are recommended on the podcast every week and at this point I'm just hungry to get started. 

I'll wrap it up with some basics about me, I'm a 27 year old IT EDI Business Analyst for CH Robinson and I currently live in Uptown Minneapolis. I'm an avid reader, partner dancer (swing and latin dancing mainly), and powerlifter. My favorite thing in the world is networking and meeting new people and providing value to those around me. I know that sounds cheesy but honestly it's just what gives me the most enjoyment. 

Anyways, that's me in a nutshell. I'm glad to meet you all and thanks for reading my mini novel!