Worth jumping in?

Question

Hi all,

I am a novice to the real estate investing scene, although I have a few bits of knowledge that I've collected from research over the years. I've never really been in a position to put it into practice, but circumstances have changed and I'm trying to decide if now is the right time.

I'm considering investing with a long-term buy and hold strategy for cash flow properties. I live in Manhattan, so clearly I'd need to look outside the city for properties. That's a bit tricky because like many Manhattan dwellers I don't have a car. I could zipcar or get a rental when I need to, but that's not terribly cheap if I go more than an hour or two out of the city. I also have ties to the west coast and I'm not sure how many more years I'll spend in New York before returning.

I'm also very time constrained. My job requires anywhere from 60 - 120 hours per week, with about 80 being average. The hours are unpredictable, and weekends are not exempt.

What I do have is a fair bit of capital that I could invest - I'd feel comfortable putting $30-40k cash to work right now, and over the next year I could add another $50-75k if things worked out and I saw a good return.

So this brings me to my question. Is it worthwhile for me to push forward down this path, or am I better off sticking to more traditional investments (stock/bond/etc.) until I'm in a position to put more time into investing? I do have vacation time that I could potentially use to scout out properties / work on closing a deal, but on-going maintenance would be tough. Another potential option would be to partner with a friend on the west coast.

Thank you for your thoughts!

Curt Davis · Answer

@Bob Danaher

Here is what I know.  You dont have a car and you work 100hrs per week.  You dont have time to do this yourself.  Honestly,  you should be looking at turnkey programs.  Yes I am a turnkey provider but I am not soliciting you just stating what I think is the obvious based on what you told us about yourself.  Figure out where you want to own property and seek out the providers in or closest to that area.

Good luck!!!!

Don Harris · Answer

@Bob Danaher , I've ridden that bull that you are riding on right now. I took the cash generated and partnered ( brought the money) with other investors to enable them to make another deal and me to learn and benefit as well. You Probably have analytical skills that would enable you to partner with others in a passive investment way. When that bull threw me off (they always do) I continued to use my funds as a private lender. You may want to consider this route. Persevere!

Ali Boone · Answer

Hi Bob. I'm in a similar position- I live in LA, hard to invest here, and I have no desire to put any time into my rental properties (different reason than yours, but same result of the time constraint). There are plenty of ways to make non-local properties work with little time. The trick is just having a good team in place. Essentially, you outsource everything. With everyone else doing the work for you, you don't have to do anything other than keep an eye on them which requires minimal time. I wouldn't personally hold off on real estate just for time. For one, you don't need to, but two, you'd be missing all the benefits.

Larry Fried · Answer

@Bob Danaher I am an investor and private lender who is working solely with turnkey properties that have excellent cash flow returns, and in various parts of the country, including the NE. I started this while running a completely unrelated business full time, so have some idea of how to work with time constraints. I would welcome sharing with you my experience of working with turnkey companies and the potential downsides and upsides.  You can PM if you like.

Bob Danaher · Answer

@Curt Davis Thanks Curt, I'll spend a bit more time reading up on turnkey properties. I agree that if I go it alone that's where I'll need to focus.

@Brian P. Sounds like you've gone for a heck of a ride! While I admire what you've accomplished, I'm being treated well enough, or at least compensated well enough, that I'm not quite ready to leave just yet. I kind of look at this job like being an NFL linebacker. It pays really well, but I'm not going to be able to handle it for too many more years, so I'm saving what I can and looking at how I can invest it to put me in a good position once I do leave.

Brian P. · Answer

Bob I had an executive job that was a 90 hour a week emergency room. I did the work of the executives above me and they got the credit and the bonuses. I ask for a minor pay raise and got a we are now in a austerity  program, and can't do it right now. It was a fortune 500 company and over the previous 3 years I been able to reduce their overhead by over 3 million a year and increase income in some areas by 12%. I asked for a $25 a month raise(1964) just to see what would happen. All my work had evolved to way above my pay grade. and I had authority to sign for most departments in the division.

Because of circumstances no one knew my job and how I did it. I had 4 lovely assistants that I think I could have taken over the world with. and after I got the no raise answer, I pulled in favors and got each of the girls set up in new jobs in the company at higher pay grades except for one and she said the only reason she stayed was because of me and when I leave she will leave. I told each of them to volunteer nothing about my job, that I would just give them an assignment and they would do it. I knew the bosses would be having a stroke and jump on the ladies for help and put them in the middle of the mess. I then went to the vice president I reported to and told him I was going to lunch, he said you don't need to tell me when you going to lunch and I said I thought I should because after I have lunch I'm not coming back.  I did a few deals a year while I was there but jumped in full force after I had taken my 4 lovely ladies to a long first class lunch.

The pilot of the company plane called me an said who is going to teach me to do more investing in real estate? It really wasn't that hard to replace the corporate job income by working only 40 hours in real estate being one of the early wholesalers. My father was a contractor and became a friend of Henry Kaiser, I would go with him when he had a job to do on the Kaiser estate I would sit around the pool with him and gain an education. He always told me to call him when I graduated from high school but I didn't.  I thought I wanted to be the CEO of a large company company, I was wrong. The real goal should be to be the owner of a large company, and hire and fire the CEO.

What is my purpose in telling you all this, just this, get the heck out of Manhattan, find a job in where ever you thought you might go out west and jump in. Even though I didn't need to I took a job as a teamster from 3-11 am when I quit and it turned into a perfect anchor for getting my real estate license and doing my investing gig. What are you making an hour now, it can be much more in your new field.

Curt Davis · Answer

@David White

A turnkey program in a nutshell is you purchase a rental property from a company who offers the home to investors already renovated and with property management in place, most cases the home already has a renter in place so once you close on the home you have cash flow from day one.

Hope that clarifies a little for you.

David White · Answer

Could you explain what a turnkey program is?

Worth jumping in?

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