All Forum Posts by: Tim Johnson

You're just checking this now? Are there two brokerages involved (listing and buying?) By law, the firms will need to be publicly and clearly advertised, and contact numbers and addresses will be available. Call the managing broker / designated broker for each firm and ask about the agents involved - they will be happy to confirm a valid license. Best wishes!

@Eryk R Wnek - You can see that almost everyone here agrees....

You're on the right track!

Absolutely skip the new car - at least for now.....flex and bling is for children (seriously)

Embrace the fear - and find some great mentors and friends.

You've got this.

@Pat Chamara  Some great thoughts and questions!... but there's really not much chance of any of us here being able to answer your questions. Partly, because there's really no one correct answer..... but mostly because we don't have any context - no idea where you are, average price of homes in your market, what your long term plans might be? 

But hey, you're in an enviable position so we  certainly want to encourage you to move ahead... and get started with something. I like your idea of house hacking the best. Buy a duplex, rent half out. Here's some pluses:

You're no longer renting so you're finally paying down your own mortgage... equals equity!

You have a chance to practice "self-managing" a rental unit. This is great experience. Even if you use PMs for all your future properties, managing once is a good way to learn tons of stuff.

While doing this first step in your journey, you'll have time to start researching and putting together specific criteria and strategies.... that will in turn lead to your real estate investing goals. Why is it that you want to invest in real estate? Being able to state that concisely will make all your other decisions simpler.

Supply and demand. Less renters....more rental units.

• To be more specific, the number of renters may go down due to job losses, industry and commerce disappearing from an area, natural disasters (tornado, fire, hurricane or other weather catastrophe) causing a relocation of folks, etc. These are all highly local indicators of course.
• On the flipside, even with renters around, a glut of new rental units could push prices down - although in my particular corner of the country the number of markets where this is happening is exactly zero.

With our present nationwide lack of housing inventory and general unaffordability of housing for many - it seems likely that the trend toward rising rents will also be around for the immediate future.

I have no comment on the "legality" of that. But from a buyer's perspective - it's hard to imagine closing on a 4-plex without asking to see a rent roll report and all other financials (for the past 12 months at minimum) as part of normal due diligence. 

Hi Adam... great position to be in!  Here's what I would do....

Join a local REI group (meet-up, Facebook, etc.) and start to network locally. Learn all you can here on BP about investing out of state. Start to develop your own plan (where and what?), criteria, budget, risk factors, etc.

Find a great REI-savvy lender and get your money plans in order (crucial if you actually want to be ready at any moment to move on a good deal.)

Continue to live frugally and save like crazy. Add to that $30K stash (there's no correct amount that's needed and nothing to keep you from moving ahead with that amount today.... but it's always easier with some buffer right?)

Find a partner - if not for actually investing... then maybe as a friend who can listen to your plans - and then hold you accountable for moving ahead on them. 

Why would I do these things? From my limited experience - they work. And REI continues to be a great route to financial freedom. Good luck!

@Heriberto Villa - being an agent is a great route to REI. It can help you see markets, hone skills, network with handymen, contractors, prop managers, lenders, other investors, etc.

If, however, you're struggling with income inconsistency and nonproductive work days, it DOES bring a grinding halt to your own investing.... and life in general! A switch to a W-2 job may bring that consistency in monthly income - but will also bring with it a host of other schedule and stress-producing issues. Most folks on BP dream of moving away from their W-2 jobs and into REI full-time.

I would focus on serving your clients and building up your agent business - while learning investment. If, in the end, being an agent just isn't what brings you any joy - then, yes, find some other work that will provide that cash to invest.

Best wishes...

Yes, it's normal. 

Not sure how the "big" investors do it...but most on these forums will encourage you to purchase in your own name and get the best loan terms possible. 

As far as the LLC, you'll find varying opinions on that as well, but again, most will suggest to beginning investors that they cover their liability issue with a reasonable umbrella insurance policy. Changing the name to an LLC later can be done.... though I wouldn't personally do it within a couple of months. Get a payment record established and then talk with your lender.

@Preston Strohm - I would rent out your present home. What difference does it make whether you bought it at market price or as a killer deal 3 years ago? Appreciation has been in your favor and you've paid down the mortgage during this time. Most investors look to buy based on potential cash flow. Your present home that you will be vacating already appears to have pretty good cash flow potential (unless there's some hidden maintenance or capex that we aren't seeing). Is it the highest cash flow you could squeeze out of a property? Probably not.  Would there always be some better off market deal somewhere? Probably. But hey, why not start with a good base hit? Rent this one, buy your forever home as a primary and get into saving gear to purchase that next investment property. In the beginning of landlording, the less unknown variables the better....

"The second part of this is that I been very interested in being a real estate agent. What attracts me to this is the freedom and of course the money."

@Sarah Schneider  Hi Sarah, welcome to the forums! Your words above are similar to many who jump into real estate. The fact is that while being a real estate agent is known for having a somewhat low bar for entry.... it has a high bar for being successful over the long haul. There is NO free scheduling and EASY money when starting out. It's a business plain and simple, and the learning curve to master processes (once you're in) can be steeper than many folks can handle. Having stated that.... I highly recommend it as an honorable and value-add-to-society profession. It CAN also be very lucrative.

• stick with your w-2 work for a bit longer and save as much as you can 
• seek out and find a producing real estate agent who can be your mentor in this process - join a good team to begin with...
• starting part-time as a RE agent is not easy or often recommended - but it CAN allow for that training and transition period...
• find a great lender who can actually tell you what various assistance programs are available to you. Maybe you can get out of renting sooner than you think? It's free to research this. Amazing how few actually do it.
• You sound like you have plenty of courage and energy. Best wishes as you start this REI journey!