Author Topic: I need a kick in the ass ..  (Read 2431 times)

LiseE

  • Stubble
  • **
  • Posts: 189
I need a kick in the ass ..
« on: March 23, 2018, 07:29:51 AM »
OK .. so I'm one of these people that studies up on an idea ... I've read books ... watched youtube videos ... listened to podcasts.  I REALLY want to get started but I'm stuck on these first two steps that keep getting emphasized over and over.

1.  Getting a mentor
(a) How do I go about this exactly?  I have lots of real estate friends (just residential realtors) .. do I reach out to them and let them know that I'm interested in acquiring investment properties?
(b) Why would anybody be interesting in mentoring a new investor?  I mean, giving back is a nice concept, but what's really in it for
them?

2.  Finding a good area to invest in.  Where to start?  I know to look at crime data, vacanacy rates, demographics, jobs etc .. but it's a big country .. how to find the high level location to start drilling down into these other benchmarks?

I'm tired of reading and watching videos and listening .. I need to get into a more active role.  I love to learn but I'm naturally tentative to take action so I NEED A KICK IN THE BUTT!

- Lise



Fishindude

  • Magnum Stache
  • ******
  • Posts: 2732
Re: I need a kick in the ass ..
« Reply #1 on: March 23, 2018, 08:27:24 AM »
You don't need a mentor, just jump in and get your feet wet.
Regarding location, your first should probably be something very close to home that you cane easily manage and keep an eye on.
If you have deep enough pockets, I think commercial real estate investment is a whole lot less hassle then residential.

MaikoTsumi

  • 5 O'Clock Shadow
  • *
  • Posts: 97
Re: I need a kick in the ass ..
« Reply #2 on: March 23, 2018, 08:40:09 AM »
Everyone is like that to some degree.  I knew I wanted in real estate in high school.  I bought my first one at 42. Nothing you read, nothing you do will teach you more about real estate than your first property.  You can't really learn how to do it, until you do it.
If there's one thing I recommend, unless you're a total pushover, manage your first property yourself.  Get your hands dirty and learn the screening process and meeting with people.  Prescreen to weed out the unqualified, or don't if you want to practice saying no, no, no, and hell no.

CowboyAndIndian

  • Handlebar Stache
  • *****
  • Posts: 1694
  • Location: NJ, USA
    • KOWines: Deep discount wine/spirits store.
Re: I need a kick in the ass ..
« Reply #3 on: March 23, 2018, 09:06:52 AM »
Regarding location, your first should probably be something very close to home that you cane easily manage and keep an eye on.
+1
 You know the areas that you are working with. What areas are safe and what are not. For your first one, buy something locally and manage it.

 
If there's one thing I recommend, unless you're a total pushover, manage your first property yourself.  Get your hands dirty and learn the screening process and meeting with people.  Prescreen to weed out the unqualified, or don't if you want to practice saying no, no, no, and hell no.
+1

If you get a great tenant, you will have far less work as a landlord. I always let the prospective tenant know that I would do an extensive check on them. Some of them were
  • I would check with their present landlord
  • I would check with their previous landlord (in case the present landlord is lying to get rid of them)
  • I would run a credit report (one for landlords which also give previous addresses and crime info). If their application did not have previous address show in the report, automatic rejection!
  • Call employers. Do not use the number they give you, but get the number from Google or white pages
A lot of applicants would not even return the filled in application.

Freedomin5

  • Magnum Stache
  • ******
  • Posts: 3743
  • Location: China
Re: I need a kick in the ass ..
« Reply #4 on: March 23, 2018, 09:11:08 AM »
Yes, I agree. Just jump in and get a good property. When I bought my first, I asked myself, where would a renter like myself (single, well-educated, workingprofessional, middle class/upper middle class, first well-paid white collar job out of college) want to live? That helped me narrow down a good area in my town that had the amenities to appeal to young working professionals. Apparently, that has worked out very well as our building has experienced 20% annual increase in value, and no one is selling their unit in our building. Our current renter wanted to buy a unit in our building and nothing is available.

Start with what you know. So start with a good neighborhood you are familiar with. (Our first property was literally behind my old high school.) Another property was down the street from the in-laws. The third one was across the street from my momís old workplace. The next was near my sisterís high school. Actually being from the neighborhood helps because you have a feel for the safety of the neighborhood, the demographics, and any quirks that arenít easily visible from the ďstatsĒ.

With regard to a mentor, I think you need to jump in first. Then as you meet people and talk about the rental property business, people will start to share their insights and knowledge.

Dicey

  • Senior Mustachian
  • ********
  • Posts: 15098
  • Age: 63
  • Location: NorCal
Re: I need a kick in the ass ..
« Reply #5 on: March 23, 2018, 10:45:26 AM »
FFS, do not jump in first, unless you're willing to lose your ass. Read. Surf the listing sites as if they were porn. Go to open houses. Find a solid realtor who understands what you're looking for. Shop in the areas you know. Don't buy condos. Take your time x 3.

For fun, I recently tracked down the first property I ever really, really wanted to buy. It hasn't even kept up with inflation and it's ugly and outdated as hell. So, so glad I didn't do it! I have since done quite well in real estate. We have three rental SFH's, all in one very large development. It's been two years of solid looking since we purchased the last one. We can easily pay cash (hint: we won't), but we're not letting it burn a hole in our pocket. The right house at the right price hasn't come along yet, but it will.

Real estate is a long term game and mistakes are expensive. Metric fuck-ton kinds of expensive if you do it wrong.


thepuglife

  • 5 O'Clock Shadow
  • *
  • Posts: 21
Re: I need a kick in the ass ..
« Reply #6 on: March 23, 2018, 06:21:33 PM »
Before we (my ex and I) bought our first investment property we shopped the market in the area we lived relentlessly for about a year. We were literally obsessed. Every Sunday, we highlighted the open house listings and planned our route so we could see as many buildings as possible. We had an Excel sheet that we used to input the PITI, current rents if available, and estimated fix up costs so we had a general idea of the profitability of each property. No real estate agent is going to have the time or patience to do all of that leg work with you. You have to do it yourself and get a real estate agent who is very good at the offer/negotiation and financing process.

Looking back, I think the reason we were successful in finding properties that have good cash flow in a challenging market is that we both enjoyed the process so much.

Freedomin5

  • Magnum Stache
  • ******
  • Posts: 3743
  • Location: China
Re: I need a kick in the ass ..
« Reply #7 on: March 24, 2018, 05:08:25 AM »
Yes, good point. We also looked at comparable rents to see what we could potentially get for our unit before we purchased, and we had our accountant run the numbers backwards and forwards to make sure rent could cover the mortgage and all other expenses.

thepuglife

  • 5 O'Clock Shadow
  • *
  • Posts: 21
Re: I need a kick in the ass ..
« Reply #8 on: March 24, 2018, 10:55:18 AM »
Yes, we also went to open houses for apartments for rent in the area that we were looking so we could estimate rents for properties that were vacant. We chatted up the landlord/agents too. That is how we ended up meeting our real estate agent, who was a great asset in our search because she loved negotiating and making deals where everyone was happy. She was very creative when issues came up. IMHO, that is the kind of person you want to work with. We met a lot of agents who were more focused on marketing themselves.

Dicey

  • Senior Mustachian
  • ********
  • Posts: 15098
  • Age: 63
  • Location: NorCal
Re: I need a kick in the ass ..
« Reply #9 on: March 24, 2018, 12:10:34 PM »
Yes, we also went to open houses for apartments for rent in the area that we were looking so we could estimate rents for properties that were vacant. We chatted up the landlord/agents too. That is how we ended up meeting our real estate agent, who was a great asset in our search because she loved negotiating and making deals where everyone was happy. She was very creative when issues came up. IMHO, that is the kind of person you want to work with. We met a lot of agents who were more focused on marketing themselves.

Hah! I met mine when I rented the guest suite of her house. She didn't need the rent, but she had a relative that wanted to move in... It had a separate entrance, which I literally never used. I became part of the family. When they "downsized"  (to a bigger house with fewer amenities to support, so less expensive), I went with them because, of course the McMansion had a guest suite. Then she found a great deal for me on a cute little condo and the rest was history. That was in the mid-90's. We're having Birthday Dinner at her house tomorrow. We're also working on putting together our next deal. Seems there's a rundown house with foundation problems in a great area that's never going to hit the market...but first she has to find the seller a more suitable place to live. Love her!

Good agent = solid gold. I will add that it's a bonus that she is a broker, not just an agent. She is smart as hell and a pit bull of a negotiator.

Neo

  • Stubble
  • **
  • Posts: 172
Re: I need a kick in the ass ..
« Reply #10 on: March 25, 2018, 09:28:07 AM »
Regarding why would someone be a mentor: I have mentored people wanting to invest. I enjoy talking real estate and I enjoy using the knowledge I have gained to help others. Plus mentoring can sometimes turn into a partnership down the road. Mentoring for me is a form of networking plus as I said I just like talking RE.

midwesterner1982

  • 5 O'Clock Shadow
  • *
  • Posts: 46
  • Age: 38
    • Follow the link to open a Personal Capital acct and we both get $20 Amazon Gift Card!
Re: I need a kick in the ass ..
« Reply #11 on: April 03, 2018, 12:00:29 AM »
Some great advice in this thread.  I'll add a piece of advice from https://realestateguysradio.com/listen/.  They say 'Do the math and the math will tell you what to do.'

For me, that means I don't even look at a property unless it meets the One Percent Rule.  I also set a Cash-on-Cash figure I want to meet.  For me, it's worth it if I can expect 20% Cash-on-Cash return.  These two quick calculations are my filters.  If a property doesn't qualify, I pass.  I also set a 90 minute drive limit from my house.  I don't want to drive further than that to deal with stuff.  Then I can spend my time looking only at good deals and find the best one for me.  Hope this helps.

LiseE

  • Stubble
  • **
  • Posts: 189
Re: I need a kick in the ass ..
« Reply #12 on: April 03, 2018, 09:43:55 AM »
Thank you all .. and thank you Miswesterner ... this is what I needed to hear .. that first level pass and if a property doesn't meet that criteria then move on.  There is so much to learn and look into it can be overwhelming  but breaking the analysis into phases like that really makes sense. 

Thanks for all of the encouragement!

thepuglife

  • 5 O'Clock Shadow
  • *
  • Posts: 21
Re: I need a kick in the ass ..
« Reply #13 on: April 06, 2018, 08:12:39 PM »
Youíre welcome! Your confidence and motivation will grow as you spend more time looking at and analyzing properties. When you finally find that great property you will know it because of the time you spent looking at 100 other places.

Good luck!