Advice on how to acquire 2-4 cash flowing properties each year?

Question

Hi BiggerPockets Community,

I'm a newbie investor who lives in a very expensive market here in NY and has a full-time job. I've recently bought a SFH turnkey property from out of state last year just to get into the RE game since I've been stuck into analysis paralysis. But lately, I've been thinking that I wanted to do more than just investing on TK properties and had recently set a goal to acquire at least 2 cash flowing properties each year. The only problem is that I'm not so sure how's I'm going to do that or what to do next. You see, I'm a very disciplined and persistent person. If I could only get a clear idea of what to do next or what I should be doing now, I know that I will stick to it until I get my desired result, as long as I know that what I'm doing is bringing me a little closer to where I'd like to be in the future, which is financial freedom just like everybody else. I'm open to the idea of both active and passive investing, I just really need some guidance.

Would you care to share some of your knowledge or experiences when you were just starting out, and was probably on the same boat as I am now? What did you end up doing that made you successful now? What would you suggest that I do next if you were me? Your advice, knowledge and experiences are much appreciated! Thank you so much in advance!

Malcomb Stapel · Answer

@Cherry Montesa  Through a combination of loan product and HELOC on my house hack, I was able to buy two additional properties last year. Another HELOC on my primary has gotten me two additonal properties in the last month and a half, all with money left over. So there are some options you can look into financing wise.

As for market, it sounds like your wanting to stay away from NY and invest somewhere where the numbers make more sense for you. Where is your current turn key SFH? Is that a market you can pursue since you are already established there? Do you have systems in place in that market if you find something that requires rehab?

Nicholas Misch · Answer

Hey Cherry,

It sounds like you have a great financial outlook and a great head start! I love Crypto investing and have about 5% of my total investments though I am planning on doubling that to 10%.

We are doing a BRRRR currently that we purchased for $45k, rehab is going to cost about $45k, so all in $90K (this is all cash), and the property should appraise around $120k. We will refinance at 75% LTV, which means if all goes well we will get all of our $90k back and have a rental cash flowing about $400, on a fully rehabbed property with minimal CAPEX for the far future, with none of our own money left in the property, so we can buy the next and do it all over again!

Some of the difficulties with BRRRR is really (in my opinion) the most profitable way is to buy and rehab completely with your own cash and then refi to get it back, however I know that it often and for most of us takes quite a while to save $90-$100k to get started, but once you do, you can use the same cash over and over (hence the REPEAT part :). You can use hard money or private money to do BRRRR's, however their is associated costs with borrowing, though you can still perform a successful BRRRR that way.

The distance part does add some difficulty, especially if you are a newer investor, however I know people who do it successfully, (I have not yet) and in many markets as I am sure NY may be, it's too expensive for you to start there. As far as contractors and other vendors you may need, a really good real estate agent who also invests usually has a solid list of contractors they recommend and use themselves. Also connecting with a reputable property manager can usually offer you the same assistance. Really the key in my humble opinion if you are going to invest long distance is to build a network and team in the area you want to invest who can help you understand the market and share their network with you.

I am always available for any questions you have.

Cheza M. · Answer

Hi Nicholas,

I'm working a full time job in healthcare as a surgical technologist here in NY. Although the salary is not as high as nurses, it's good enough for me to save enough money to buy properties out-of-state, especially since I don't have any kids, debts, or any big responsibilities. I'm a minimalist and paying low rent since I'm renting my aunt's apartment. I've invested half of my savings already in crypto, 403(b), Fundrise, and some stocks and I don't plan on pulling them out although I would and could save some more money to start buying at least 1-2 properties out of states if I want to and that's actually what I plan to do.

I was hoping to quit my job in 5-10 years from now. And in order to do that I'll need to have 2-4 properties per year cash flowing close to $300. But I'd like to start with 1-2, because I really don't have any experience investing at all and I don't want to get overwhelmed. I feel that BRRRR strategy is the niche I should pick and focus on if I want to acquire more properties in short amount of time but I'm not sure if I could actually do it, especially out of state. How and where do you get good contractors? And how do you manage them to do the work properly and in a timely manner? I'm not sure if I have the skills to manage them right now, but I really do want to learn whatever skills and knowledge to be able to do a successful BRRRR out of state.  It would have been a lot easier to learn how to do it if I knew anybody who I could assist or shadow with their BRRRR properties but I've got nobody that's why I'm just trying to get some advice from expert investors such as yourself to minimize my mistakes, but I'm ready to learn whatever needs to be learned and done.

Nicholas Misch · Answer

Hey Cherry,

I love to see someone who is so motivated to get moving in RE. There would be several things I would need to know regarding your financial ability currently, what your looking to accomplish with RE investing, and what type of properties you are considering and methods to give any beneficial advice for your specific situation. I'd love to hear more and help with any knowledge I have.

Nathan Murith · Answer

@Cherry Montesa congratulations on doing the work and posting here to keep your momentum going. I'd be happy to chat about all things we did when we started to keep the momentum and motivation, please do not hesitate to DM me if you want to go into more detail, I think it will be hard to convey all the things in one single post here.

One things that I have learned to appreciate with real estate is: patience, long-game, daily discipline, hard work, and network. Like they all love to say, it is not a get rich quick scheme, it is a get rich for sure.

happy to share all the tools, tips, tricks, resources, info, etc so please reach out if interested!

Advice on how to acquire 2-4 cash flowing properties each year?

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