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What are your goals with real estate?

6,149 Views | 59 Replies | Last: 5 yr ago by mwp02ag
mwp02ag
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AG
Who knows....may be someone on this very board that is working toward or has already achieved what we are trying to do so let's see where you're trying to go over the next couple years. Hell we may be able to achieve a degree of accountability or even a mastermind group from contact made here. There is real power in writing a goal down.

My wife and I are working to build $20k/month in passive income through rental property and our first small business (a gym in SA) by Dec 31, 2020.

We completed our first BRRR strategy rental property October of last year, it's currently cash flowing.

We want to grow the gym to 150 members so that we can build ourselves out of that business. We're currently about 115 members. In order to do this we need a new space and are working on either an owner carry existing facility purchase or raw land and development of a commercial space. Either one will have additional commercial rental space that will help us hit that cash flow goal.

We are remodeling our current home to sell. The proceeds from that will pay off all our unsecured debt and leave us with some cash, in addition to the savings of the mortgage and other home expenses. We are going to live in an RV until we can get a live in flip or duplex that we can BRRR again.

After that one the plan is to continue house hacking until we hit that goal or become sophisticated enough to syndicate an apartment or mobile home park deal. In the mean time, we are going to use our self directed IRA to passively invest in an apartment syndication with a group here in San Antonio.

If we achieve our goal, #focus2020 or #alohaChristmas are our affectionate tags for this goal, we are taking a month long vacation in Hawaii over the Christmas holidays.
evestor1
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I'm hoping to make 'eff you' money!
evestor1
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Just Kidding

Realistically I want 7-8 duplex/triplex and 2-6 SFH by the year 2022. I am not weighted this way currently so it may take a few years. Total units desired is 20.


My goal is to have an income outside of work that allows me to be laid off and have no worries if it takes 12 months to find a new job.


mwp02ag
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AG
Awesome! There is SO MUCH peace and power that comes with financial freedom. We're on the verge and I can absolutely feel it coming.

How many do doors do you own now? How do you plan to get the next one?

Thanks for the reply!
Diggity
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AG
someone has been reading Bigger Pockets
aggiebrad94
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AG
The $20k per month in rental income is my target too. I expect to begin buying rentals in the fall after a couple more flips so we'll see how it goes.
Diggity
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AG
do you guys worry that deals are becoming tougher to find in big cities these days?

It's no secret that real estate investing has really taken off for individuals that were not previously in the market. You only have to look at the real estate board over the past few years to see that. One of the Houston Facebook investing groups I'm on has 26,000 members! Most of the ones posting don't appear to have two nickels to rub together so probably not much of a threat though

The deals I always hear about on real estate podcasts and read about on forums sound awesome, but how often are these "amazing" deals really presenting themselves?

I've dipped my toes in the water as far as investing in SFR but never pulled the trigger because I couldn't make the numbers work. I have helped clients purchase investment property before but some seemed to shoehorn deals just to find "something".

I feel like the only way to get a decent deal is to somehow be the first one to find a seller who doesn't know what their home is worth and doesn't have the willingness/ability to bring in an expert. HomeVestors and Net Worth seem to thrive on these folks, but how many are out there? Wholesaling in general is predicated on the market being inefficient.
94chem
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Quote:

I feel like the only way to get a decent deal is to somehow be the first one to find a seller who doesn't know what their home is worth and doesn't have the willingness/ability to bring in an expert.
There are a lot of flood damaged homes that haven't even been started on. Seems like greater Houston would have some opportunities.
Diggity
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AG
you're right...there should be opportunity there. I've had friends that have had luck in Inwood Forest for those.
mwp02ag
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AG
Think and Grow Rich is actually what spurred this thread. I don't spend much time on BP or their podcasts anymore. I go through phases. Right now I'm into audio books, Old Capital, The Real Estate Guys and Joe Fairless's podcasts. I also really like Kwik Brain and The Science of Success Podcasts.
mwp02ag
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AG
Just listened to a podcast discussing this very thing. I think the investors were based out of Illinois...somewhere out of state. It's certainly a viable opportunity.
Diggity
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AG
Gotcha. BRRR and house hack are popular phrases on BP so I thought that's where you got them.
Medaggie
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I love financial independence and preach it to the millennials.

I currently have 6 duplex + Lakehouse that I rent. Once I pay all of these off, I should clear about $100K a year.

Every year after the payoffs, I will buy 1 more SFH/Duplex with the goal of having 15 homes before 60.

Building passive income is like a snowball effect. It starts off painfully slow, but once momentum hits, it all rolls down hill.

mazag08
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AG
People read a book and think they know real estate. Then they start offering up more than a property is worth because they don't fully understand what they're getting into.

Good deals truly are hard to find, because there's plenty of dumbasses out there overpaying. Flooded properties in Houston are still available though. So there's at least that. But just look at BCS. A bunch of smart guys bought up SFR not understanding the market. A lot of them are now way in over their heads with rents barely producing a trickle of cash flow. Value adds are always grossly overstated as well.
schwack schwack
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AG
We have a 4-plex, 2 duplexes, 4 single family & 1 other house waiting to be renovated & rented which will be a total of 13 rents when finished. Purchased the 4-plex first in 2015. Goal initially was to have 12 units - we made that. We wanted to concentrate on multis but there just aren't many AND the city just gave some incentives to a developer for some new apartments, so maybe single family will be our best bet - still trying to sort that out.

We are self-employed & want enough to retire, live comfortably & be able to manage on our own but not willing to work ourselves to death. This should do it when we finish the last one. So far, we've been paying cash for properties & using the rents to "finance" the renos. It's worked well for us so far & everything should be free & clear and all money recouped in 6 years or less. As mentioned by others, deals everywhere are getting harder to find and we are in a smallish town & property costs are rising but rents aren't, so the numbers just aren't working. We'd be interested in a couple more if the right deals came up, but will be fine if they don't.

We are set to close this month on a small office building and will use it to transition out of our other business & for storage. Eventually we may rent it out, too.










mwp02ag
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AG
I'm definitely a BP disciple. Brandon Turner lived out our #alohachristmas goal last year and then went back this year indefinitely and may still be there as far as I know. He is my IDOL and him achieving what we wrote down as a goal three years ago was a powerful kick in my ass to get moving.

If Brandon Turner can do it, so can Heidi and I. I believe it now. I know it. We've become the kind of people who do what we set out to do, no matter the labor involved.
Diggity
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AG
It's a great podcast. They're not trying to sell you some BS system or get you to sign up for anything. The only real pitches they make are for their books, which are worth reading for the most part.
mwp02ag
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AG
Interesting isn't it! I am one of those guys I guess. I read Rich Dad, Poor Dad four years ago. It took me two more years of almost deals, missed opportunities, running numbers with no real clue what I was doing before I finally found that triplex.

We made lots of mistakes with it. I was a Project Manager in new construction, a commercial electrician before and during my time at A&M and now I am a TREC Real Estate Inspector....I have a back ground to lean on and STILL almost lost that house twice. We used the cheapest contractor because I was so scared of cost over runs, in retrospect he cost us more than the highest GC bid we had. We were ****ing crazy to take on a 100 year old, ground up remodel for our first project....but we did it. We freaking did it and we're immensely proud of the accomplishment.

It cost us $60k more than we planned due to contractors, delays, permitting issues, theft and holding cost to extend a 12 month hard money loan two months. That HURT. BAD. At the end of the day appreciation saved our bacon and we were able to cash out refi to get out of hard money, walked away with $10k and STILL have at least $125k in equity and had it leased out in three months.
Diggity
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AG
Sounds like you have a great background for the business.
BMach
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AG
Picked up my first turn key SFH home 3 months ago. Bought it right, did zero reno and it's cash flowing very nicely. We close next week on house #2. It's a HUD home that we bought way under market as a value add. Look forward to getting the reno started. Goal is $10k-$20k in passive income a month. Want to get into multi family, but am having trouble finding much in my area (Longview) that makes sense numbers wise.
mwp02ag
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AG
Bravo!! Thanks for shareing!

Creating a business with my wife was the best thing we've ever done. I love working with her and she should be able to leave her job as a nurse before the end of the year. We're doing it for the travel and lifestyle. We want to own a house in Silverthorn Co and one in the Caribbean so that we can travel back and forth and let our friends and family use them too!

That's our why.
mwp02ag
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AG
Ha, fat lot of good it did me. Mindset is what won the day for us, I almost broke multiple times.
Diggity
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AG
I would agree with you there. I think mindset is the most important thing. Look at me, I've been analyzing "deals" for nearly a decade and haven't done a thing.

Analysis Paralysis is a real thing!
BMach
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AG
Pull that trigger!
mazag08
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AG
BMach said:

Pull that trigger!


This

Diggity, You need a better Realtor. I'm happy to help.
mazag08
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AG
mwp02ag said:

Interesting isn't it! I am one of those guys I guess. I read Rich Dad, Poor Dad four years ago. It took me two more years of almost deals, missed opportunities, running numbers with no real clue what I was doing before I finally found that triplex.

We made lots of mistakes with it. I was a Project Manager in new construction, a commercial electrician before and during my time at A&M and now I am a TREC Real Estate Inspector....I have a back ground to lean on and STILL almost lost that house twice. We used the cheapest contractor because I was so scared of cost over runs, in retrospect he cost us more than the highest GC bid we had. We were ****ing crazy to take on a 100 year old, ground up remodel for our first project....but we did it. We freaking did it and we're immensely proud of the accomplishment.

It cost us $60k more than we planned due to contractors, delays, permitting issues, theft and holding cost to extend a 12 month hard money loan two months. That HURT. BAD. At the end of the day appreciation saved our bacon and we were able to cash out refi to get out of hard money, walked away with $10k and STILL have at least $125k in equity and had it leased out in three months.


I bet your first piece of advice is to put down the books.

The ideas in the them are fantastic. But very few capture the true nature of the process of finding, researching, analyzing, underwriting, due diligence, buying, renovating, leasing, and cash flowing.

The people who understand all of these are abusing the people who don't. Unfortunately, unlike the 80's and 90's where you could jump in with very little cash, you have to put a significant investment in to even begin this process. The risk profile is higher, information is more readily available so the competition is more aware, and the value isn't as available as it used to be.

Kudos to everyone that has done it well and is prospering.
evestor1
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I am currently downsizing the fleet down to 7 doors this summer. In 2019 I will add again.

I am very worried about adding new units. I build my duplexes so land and city regulations are my worry.

As far as SFH goes...I only buy from those I know. I close in a week with no realtor, they get out fast without worry, and I get a fee-less house. The generation (60yo-70yo) value not holding the house for 3 months waiting for a buyer. I've done this four times and never had any problems. All have been 100-120k problematic homes (foundation, HVAC, roof.)
South Platte
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You all must be freaking loaded. How much equity do you own in each property? How do you get approved for several mortgages . . . do you operate as an LLC?

My wife and I live in Houston and rent out a condo in Colorado that has rented very well for nearly 7 years and the value has increased $75,000 over that time period. However, I wouldn't know where to begin to get into another one. I don't know that I have the stomach for a number of different mortgages.
Diggity
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AG
cash out refi my friend.
evestor1
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Cash out refi works well.

I do sometimes sit around and think to myself...oh wow - I have a lot of liability if everyone moves out of my rentals. I try to keep a minimum of 30% equity in all properties. There is also the 'oh crap' scenario of what do i do if hard times come. So I am always a short fuse away from offloading one property for cash if needed.
BMach
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AG
I set mine up with commercial loans through my LLC. Diggity is right with the refi, look up the BRRRR strategy on bigger pockets. Only way to scale without a ton of capital up front is leverage.
BMach
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AG
But no matter what happens you always have a tangible asset. That reason alone is why real estate is so attractive to me. Stocks scare me because I have no control over their value.
CS78
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South Platte said:

How do you get approved for several mortgages . . .
Relationships with small local banks. Most of my properties are sitting at 40-60% equity. 20% down at purchase, minimum 15-20% equity gained at purchase, appreciation, and principal paydown all combined and it doesn't take many years to get there. When I find a new property to buy, I crunch the numbers on which existing one would work best, email a banker with the contract and my plans for how I would like to refi or do a second lien on a current house in order to cover the down payment/closing cost on the new one, and usually close in about a month with no money out of pocket from me. If you're buying right, the new property should have enough equity in it to do the same with it later on. I currently have I think 19 financed properties and only had to come up with a couple original down payments. If the numbers are good, most local banks are pretty easy going up to about 1 million in loans. It's best to keep a relationship with at least a couple to keep your options open. Even if your loan balance isn't high, banks can go through times where they aren't looking to do a bunch of loans for varying reasons. One might balk or drag their feet and you can take your contract to a different one the instant they do. Kinda like dating.
bkag9824
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AG
My why: To be able to provide a comfortable lifestyle for my family without worrying about what "the man" is going to do during the next down-cycle. I want my family to have the financial stability and time/location freedom to pursue other meaningful initiatives via charity/volunteering, while also providing generational wealth freedom/stability.

How: I've been a BP disciple for a couple years now, and just recently read Rich Dad (why it took me so long I dunno). I also read other real estate centric blogs/articles to expand my knowledge aside from the great content/resources the BP folks produce.

I don't have any commercial doors yet, but plan on using relocation allowances and personal home equity from our next move with the company to buy my first deals. I spend a fair amount of time looking at realtor.com for small-mid multis in markets I believe will continue growing (census data and population growth rate some of the metrics I look at). I want to skip SFHs altogether if possible as I know how easy it is to lose money/time/etc. in those deals.

I like the idea of BRRR, but am concerned about increasing interest rates and whether or not housing prices will adjust appropriately to find the deals that will provide my target returns.

I renovated our first home on my own (no major electrical or plumbing) and have done the same in our third home. I have the knowledge/skill to estimate and do the easy jobs (paint, fixtures, flooring, cabinets, bathrooms, etc.), but I firmly believe that taking on those projects will keep me squarely in the "buying a job" phase as opposed to truly investing (time value of money). I've "paper bought" several homes, and always include property management as a line item expenditure as I want other folks dealing with the minutiae of day-day operations.

Next steps: Continue reading, analyzing deals, and network with other like minded people who are deadly serious about achieving financial independence and growth. I am locked into a very remote part of the country that I'm not willing to invest in for multiple reasons, so I try to connect with folks I can develop a trusting relationship with to potentially partner on deals in the future.

Potentially significant consideration to achieve my goals:
My stepfather owns a decently sizable portfolio in the Houston area that carries zero debt aside from property taxes/maintenance. He's in his mid-late 70s, and is finally looking for an exit strategy. But he's a miser who refuses to pay a decent wage for honest work... one main reason why I haven't taken over yet. I'm working on him slowly to realize his opportunity cost of underpaying a complete stranger off the street versus investing in me. His why is generational wealth, and I'm trying to help him see that there will be significant repercussions if he were to pass away unexpectedly.

The ability to leverage against his existing portfolio is one option. He also has significant cash reserves and has expressed an interest in investing if I bring the right opportunity. In short, I need to leverage his years of experience and my eagerness/drive to continue building the next generation of wealth.

That was a lot of typing, but I appreciate another venue other than the good folks at BP to share goals and network. While I don't have much in the way of operational knowledge, I've taken copious notes on many good ideas/best practices and would be glad to chat/network with those of you looking to achieve similar goals. Best of luck to all who effort to take control of their financial well being!
mwp02ag
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AG
No way man, I still read/listen to every book or podcast I can if they move me closer to my goals. I wouldn't be where I am and certainly wouldn't be going where I want to go without the education. To quote my favorite "mentor" Jim Rohn...."education will get you a job, self education will get you a fortune".

I understand what you mean though and there is no way I'm going to sink $30k into Rich Dad Education, and I love Robert!
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