All Forum Posts by: Seth McGathey

The market is important, but also consider where you can build the team you want/need. Even the best market with a bad team could make a good deal go bad. 1% rule is a challenge but not impossible in my market (Milwaukee). So it is one to consider. I successfully found a duplex last year for $300,000 and I am making $500 cashflow after everything. Appreciation in Milwaukee is not astounding but it is consistent. 
If you want help looking into Milwaukee further, reach out and I would be happy to help you out. 
Good luck on your search! 

@Remington Lyman I second this, your team is going to decide whether the deal sinks or swims. So a good question is, do you know anyone you trust in one of the markets you are considering? If not, finding a trusted person is going to be key. I may be biased since I am an agent myself, but an agent is likely going to be your most valuable connections, because agents generally are the ones who can get you good connections for all the other team members. 

I personally am in the Milwaukee area both as an agent and as an investor. So if you are looking in Milwaukee or just want to discuss the Milwaukee market, feel free to reach out and I can help you better understand the Milwaukee market and see if it is one you might consider. 

Have you considered going th BRRRR route? If you find properties that need a lot of work or have good potential for additional beds/baths, you might be able to get most of your initial investment back with a cash out refi. Also, sounds like you are already investing in my neighborhood (Midwest) but finding the right area might mean 20% here is the same at 10% in another market.
If you want help searching in the Milwaukee area, let me know and I can help you out. (I am an agent and investor here).  

Personally I would just list it. I know other people have said not to, but you can always just say your away and that the earliest you can do is the day you get back. (Could even make it sound like you are too busy with other showings). If they can't wait a week, those people probably won't be available when you get back anyway. But if you wait until you are back, you might miss out on some potential. Otherwise you would just wait until 3-4 days out from getting back. But it also all depends on how desperate you are to get someone in there. 

But like others have said, the other option is an agent or friend who can show it for you while you are gone. 

If you can pull that off, that is amazing, and good for you. But honestly, the end goal of quit w2 in 10 years is not the challenging part in my opinion. It is the 3 properties in your first year. Real Estate investing tends to start slow and then expand exponentially. First property is usually the hardest. Then by your 3rd or 4th property you start having enough cashflow or equity to allow you to buy a property every year just off the cashflow/equity of those earlier properties. 
A more common growth pattern is something like 1 property in year one, 2nd property in year three. 4th property in year four to five. 5th property year after that, 6th property year after that, so on. 
All this to say, what you are suggesting is not impossible, just challenging. You either have to have a lot of spare cash from your w2, or you have to be very strategic with your purchases. Likely what you are going to need to do is get some solid BRRRR properties. Properties that allow you to add value right away, cash out refinance right away, and pull all or most of your original investment money out. This will allow you to reinvest the same money in your next property so there is no wait time building up some more savings to invest. The other way is to get some business partners after the first few deals who are willing to invest money up front to use your experience knowledge. This way you don't need to bring as much cash to the table but can still build your portfolio.
Good luck! 

I think it is a nice idea, but I think it will be challenging to get enough clients in a reasonable area. Only new investors are likely to be interested in such a service, and how many new investors live within a reasonable distance to you? And how many of those can you reach before they start doing deals on their own. And how many that you reach will take you up in the offer. Seems like a very small pool to pull from. But, if you can make it work, all the power to you. 

Hey Nick, do you have experience with home repair? If not, do you have trusted contractors? It is possible to start with flipping, people pull it off, but it is one of the higher risk strategies to get into real estate. So you will want to either know how to do a lot of the work or have trusted contractors. Because all you need is one thing to go wrong and now your whole flip went from big payout to big expense and you are out of the game again until you can raise enough capital. 

If I were just starting out, I would house hack. If your current house is rentable, I would rent out the extra bedrooms. If it wouldn't work like that, I would take the equity in a HELOC or cash out refi and buy a 2-4 unit property, live in one unit and rent out the others. In a perfect situation the property needs a bit of fixing up and/or could have another bedroom or unit added. You do that on the side while renting the rest. That allows you to get some of the benefits and experience of a flip without going into a full flip situation.

Hope this helps, and good luck! 

It is tough. I think it very much depends on the job. If it is a job I like/enjoy, sure I will take that. Also, 5-10 years ago, I would absolutely take that. But, I am currently looking to transition to full time real estate, so now I think I would take the $500k because I think it would push me over the edge and allow me to transition out of my 9-5 within the next year or two. 

I would likely keep $100k of it as a safety net to live off of for the first year without my day job. I would take the other $400,000 and invest it into some more long term properties. In my area, I could likely get at least a few 4-plexes. Or maybe I would step up my level and try breaking into the commercial market. 

@Kevin Lee I was thinking the same thing. House hack yourself to success. You won't feel so much like you are managing it, but you will learn a lot about being a landlord. 

You also could go the route of buying a multi family and living in one unit. Either way, you will get the most bang for your buck by house hacking.

I went the house hack route when I started and the only thing I regret is not taking more advantage of it when I was still single and childless. I could probably have twice as many properties now if I had known then what I know now about investing, and it all would have been possible with house hacking. 

One question, what area are you in? Because the one thing that may be a caveat is the prices in your area. For example, if you are in LA you might not have much access to affordable housing for your money. In a situation like that, you might reconsider that house hacking plan and might consider some long distance investing since you don’t want to self manage anyway. But if you are like me and live in an affordable city like Milwaukee, the house hack plan is easily going to be the easiest, safest, and most cost effective way to get started.

Finding one by a train station should be pretty easy. Do a proximity search on the properties for sale by that train station. 

And while I think a train or other public transport is a good thing to have, it probably isn't the #1 thing for most people. For example, if I am walking distance from a train station, but there are no restaurants or other amenities near that train station, it might not be all that appealing. I recommend trying  to take a more wholelistic approach to identifying what makes an area desirable.