All Forum Posts by: Peter Stewart

Hi Allena,

Congrats on taking the first steps towards your financial freedom! Purchasing real estate can seem like a scary and intimidating process, but, as long as you prepare properly and arm yourself with as much information as possible (which is what you're already doing), then you'll find it wasn't all so bad in the end. You will actually start to enjoy it.

In regards to your question, you basically answered it yourself already. You are looking to pursue financial freedom through real estate investing. Many will argue that your personal home is a liability, not an asset. If you are investing you want to accumulate assets, not liabilities. Now, if you are going to buy a fixer to live in and to some type of live in fix and flip, then this home could be considered an investment. But, if you're going to buy a "regular" home, then I would not consider it a true investment. The multi family route is one. Not only do you own property, if you get the #'s right you could actually be making money and living for free (or something close to that). You also kill 2 birds with one stone - you become a property owner and a landlord. Multitasking :)

Also, the sooner you start buying rental properties the better. You typically need the rental income on your taxes for 2 years before lenders will start counting it as income (so it becomes easier to qualify for loans to purchase more).

To clarify, the duplex is 1250sq ft per side? 

What about the foundation? Any structural issues to deal with? Is there a basement? If so, will you go finished or unfinished?

I'm in the process of a to-the-studs flip on a 1700sq ft house with an 800sq ft unfinished basement. It was fire damaged so we had to rebuild about 1/2 of the house, and we also reworked the layouts on both floors. So, very extensive. We're halfway done with the project and we expect to spend about $120k. We're doing the home nice though - Hardie siding, good windows, granite countertops, SS appliances, etc. We're looking to sell around $275k so we have to use mid to upper level finishes and products ($275k is top of market for the area). 

With my limited info I have on your project, I think it'll be a minimum of $50k per unit, and could easily go up to 75k/unit. Keep in mind that's 2 kitchens, at least 2 full baths, 2 electrical panels, 2 HVAC systems, 2 water heaters, etc. 

• Do you live in California?
  • Not currently
• Have you lived in California in the past 5 years?
  • Yes, between 2003-2014
• If so, where?
  • Los Angeles - Westside (Santa Monica, Culver City, Mar Vista)
• Will you be staying or leaving?
  • I left in Dec 2014
• Why?
  • I was crushing it in real estate and I loved living there. Ultimately though, after having our first child, my wife and I felt LA was not the best place to raise kids (we planned on having more..and did) - quite dangerous, dirty, etc. There were 3 murders within 6 blocks of my house in the last 1.5 years I lived there, and I was in a nice area (Mar Vista). Traffic is beyond atrocious too. So, we moved back to my hometown of Indianapolis to give them a proper midwest upbringing.
• What is your full time income producing job? 
  • Real estate broker

My suggestion is to make sure all your work is done above board. Do things the right way, every time. Don't put yourself at risk to save a few bucks. If the work requires permits, get them, no matter what the downsides. The downsides of not getting permits far outweighs the few downsides of getting them.

Hi BP Community!

I am new to the site and I'm absolutely loving it so far. Amazing education, connections, people, etc. I live in Carmel, IN (outside of Indianapolis), with my wife and two kids. I've been a full time Realtor since 2009, and I've owned rental property since 2011. I am looking to ramp up the investing side of my business, and that's how I ended up here. 

I currently own 6 units and I'm under contract for 2 more. I have done 1 flip (2017) and I'm in the middle of my 2nd. I am also getting in to new construction - I have two lots that I'll be building spec ranch homes on. Plans are filed with the city on one, so I hope to break ground within a few months.

After getting inspired by the podcasts, I have set a goal of 100 units in the next 5 years. I plan on funding the units through the flips and new builds (also will be growing those businesses). I'm here to not only learn, but to help wherever possible, and network with awesome like-minded individuals.

Cheers!

-Pete