Access to coaching?

Question

Hey guys,

Wife and I are looking to get started in long term rentals to hold long term. This would be our first rental. We have about 400k HYSA. Ideally looking for something around 200k.

We have previous experience with Live In Flip (didnt know there was a name for it until after we had done this). Currently with a high income for Ohio of combined 450k. Trying to put our extra dollars at work.

We live in Southern Ohio which is fairly poor. I work in a small college town. I graduated from UK. We are about 2 hours from Columbus, Ohio.

Our 3 options are: A- buy cheap housing in small college town. Benefits is that we know the area and know contractors in the area. Downside is that being in a poor town area, not much appreciation in the future. However, we could buy cash and it would technically be easiest to BRRR. B- invest in Columbus, OH. Would still be in state. Lots of new businesses moving in to Columbus. Downside is that being 2 hours away might as well be 12 hours away with the hours that I work. C- invest in Lexington, KY. More familiar with Lexington as I went to college there. Downside is that again it is about 2 hours away.

Ideally, we would find a coach of some sort that could help us find a deal that works, knows the ropes of the building an LLC.

Does this type of service exist?

Thanks!

Andrea R. · Answer

Hi Zachary,

I love your interest and careful thought on investing in real estate!

I am familiar with Portsmouth, Ohio and actually disagree with some of the other folks advice (no hard feelings to anyone) regarding investing there just because it is local.  The asset return, in my opinion isn't there due to the location and lack of new businesses moving into the area.  While the cost of entry is low and appealing, if the goal is to put your money to work my suggestion is to invest closer to where there are more jobs, so for the sake of your A-C, you should look closer to Columbus and/or Lexington.

Using the BRRRR method and 1031 tax deferment strategies are a great way to build your portfolio. I have built my personal investment property wealth doing both, and have been very successful (my bio has my full story). Part of the BRRRR method is leveraging asset appreciation, and again investing in areas with guaranteed returns (Columbus/Lexington) will help you get to the next investment property quicker.

In searching for a Realtor to represent you in a city you don't live, look for someone that has an established team that can assist you. In addition, make sure the Realtor is full time, and has experience with Investors, and a bonus if they have investment properties themselves.

You don't need 50+ properties to retire early, if you invest smartly. And investing smartly means if you want 50+ you can make that happen sooner and with better properties.

Keep making careful decisions and utilizing resources such as BiggerPockets!

All the best,

Andrea

Remington Lyman · Answer

I would recommend investing locally first. It is easier to learn this way. It sounds like the cost to entry is pretty low too, which is great to learn. After you have done a few deals locally, then you could look to expanding into more expensive markets.

There are a bunch of classes and mastermind groups out there. All you have to do is google it. BiggerPockets has some too that you should look into

Samuel Diouf · Answer

I'd start in your backyard if you have a low entry point. The investment would be a great hands on learning experience with low risk.

Now if you're looking to leverage your money and want to hold for the long term.. Columbus is probably gonna be the way to go, with the city being one of the fastest growing cities in the U.S.

Gino Barbaro · Answer

@Zachary Harr

when you say building an LLC, what do you mean? An LLC is just an entity you use to protect yourself against liability.

If you have the opportunity to buy in your backyard, I would. I would not buy a property with all cash, leaving me with no capital. Not sure when rates are going to drop, so refinace may be farther in the future.

It comes down to what your goals are. Are you trying to create some type of cash flow from the portfolio to be able to leave your job, or build equity and appreciation to be able to extract and move into the next deal?

If you're buying in your town, the down side is you may have to manage yourself, may be difficult find 3rd party management.

Good Luck

Gino

Jimmy Lieu · Answer

Hi Zach, I would recommend working with the a great investor agent who can help! He should be able to connect you with their systems, processes, and real estate such as PM, contractor, lenders, etc. As long as your agent is an investor, you should be in absolutely solid hands. Happy to connect and answer any questions you have!

Drew Sygit · Answer

@Zachary Harr don't do ANYTHING without a well-written list of expectatoins and goals!

If you jump into something before doing this - you're highly likely to get taken advantage of, or at best waste your time & money.

Can't help with a coach:(

Do recommend investing close to home if you can and then screen the heck out of PMCs with your expectations & goals to hire a good one.

Recommend exploring as many sources as possible to get referrals AND cross-reference them to get as much accurate information as possible.

Check out NARPM.com, BP’s Property Manager Finder (BiggerPockets: The Real Estate Investing Social Network), etc.

Also, encourage you to learn from the mistakes of others - by reading posts here on BiggerPockets about owners not having their expectations met by their current Property Management Company.

To avoid going through the same poor experience, keep reading.

Even if someone gives you a referral here, do NOT make the mistake of assuming that the PMC will meet your expectations, just because they met the expectations of the referral source.

In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.

It's often a case of not doing enough research, as they don't know what they don't know!

Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator – so, they often select the first PMC they call or that calls them back!

So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.

EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!

This also leads owners to ASSUME simpler is better when it comes to management contracts.

The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!

A well written management contract should clearly spell out what is expected of both the PMC and the owner, to PROTECT both and avoid misunderstandings. Why do you think purchase contracts are so long and have such small print?

We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!

P.S. If you just hire the cheapest or first PMC you speak with and it turns into a bad experience, please don’t assume ALL PMC’s are bad and start trashing PMC’s in general. Take ownership of your mistake and learn to do the proper due diligence recommended above😊

Basit Siddiqi · Answer

I would choose option 2 or 3 and hire a property management company so you don't have to worry about how far the property is.

Alecia Loveless · Answer

@Zachary Harr Personally I’ve researched other markets and have decided to just stay locally due to the headache factor of managing teams long distance. My market mostly has 2-4 unit properties for multi family so I’m somewhat limited but am finding that it is just easier to do the management myself. I do not do the labor as I am not handy.

With 25 units it usually only takes me about an hour a week to deal with everything unless I have a vacancy and am leasing a unit but even that operation can be fairly streamlined.

I think self management would be very doable for you and your spouse provided you either buy decent units or get them renovated quickly minimizing the need for time consuming repairs.

I’ve decided to just work on becoming more efficient and focused on the market nearby which might be a good solution for you.

I’d still recommend financing for you because it gives you more bang for your buck but if you’re risk averse and/or looking for greater cash flow you could put 40-50% down instead of 20-25%.

James Wilcox · Answer

I don't disagree with the advice already given and kind of second it. If you do want to come down to Lex I can help with that. @Zachary Harr at the end of the day invest where you are most comfortable and can build the best team in.

Robert Ellis · Answer

I can help. I do Deals in columbus and relocated to miami florida. move there for a year then move where your dream is. I focus in all new construction where full return of capital is the value. upside for single family and multifamily new construction and developments. value add at every piece of the project. hard to do that with existing inventory. I'd get out of existing and break into new construction. if you want to come down to miami I can help you here to haha

Access to coaching?

Most Popular Reply