Which track to take for quick expansion?

Question

Hi All,

I bought my first house 4 years ago and slowly updated it and rehabbed it myself, and ended up selling and walking away with 80k to use towards a real estate venture.

My goal is to leverage the 80k as best as I can to get a solid RE portfolio as quickly as possible (I think I need more capital!). I'd love to do this full time, but know I'll need quite a few properties to get to that point.

Also,I'm moving from Baltimore to the Roanoke VA market which is substantially cheaper (thankfully) so deals should be available.

So ultimately I'm looking for different opinions. What would you say is the best track forward? Flip a few houses? Buy a rental now? Try to find a cheaper multi family?

I'm not interested in wholesaling and I will be working full time and using my down time to work on whatever I end up going with for now (which has worked out well so far with my first house).

Thanks for insights. Looking for what YOU would do in my shoes.

Thanks!

Bill Gulley · Answer

Well, you have 4 properties, very good. But what is your real estate skill set? Your question is saying you don't have a strong RE understanding, the basics, because your question is answered in the market. The market tells you the most profitable business strategy.

Need to do some analysis in the market where you are going. Might be partnering with a fix a flip guy needing money, most do, and you work the day job.

But, the market will tell you what's hot and what's not. :)

Dominic B. · Answer

Hii Andrew,

I'm a Roanoke native in NoVa but moving to Roanoke soon as well. I have several small buy and hold multifamily properties there. I feel the Roanoke area is a relatively invester saturated market but $80K can easily net you 4-6 small multi-family units. If you buy at the right price and do your numbers correctly, your annual cash flow should give you enough cash to buy at least one more property per year for the next several years. If you buy value add properties your cash out equity (via refi) should net you even more properties. Best of luck!

Account Closed · Answer

Hey Andrew,

$80k is plenty enough to get started around here. I would either put money down on a small/mid sized community (< 20 units) or buy several SFH's or Duplexes. The full time thing is something you have to look at your personal finances to figure out, but I would say its based on how well you can leverage your money.

As far as a track to follow, do you want cash flow or capital gains? Both have their advantages and disadvantages, but in my opinion and several other investors I know holding is the best. If you choose to hold I would start out small, which is what all the "greats" typically do. This allows you to be hands on and learn so that later on you know what to expect and don't pay a plumber $500 to install a toilet LOL.

Questions to consider (some may factor into your leveraging);

• Do you have any experience in buy and hold?
• Are you transferring your job from MD to VA, or starting over?
• Relationship w/ a bank?
• Property management?
• Do you have or know a realtor?
• Any knowledge of the Roanoke area?

P.S. - I grew up in Maryland, and the pace down here is drastically different. I'm about an hour away in Lynchburg but travel to Roanoke often.

Andrew Dunlap · Answer

Thanks for he response! Interesting to hear from a SWVA investor.

I was under the impression that unless I lived in the multi family (not out of the question) that I would need 25-35% for a down payment on a community. Thus limiting me pretty drastically to places under 400k. True?

Going the SFH route seems comfortable as I understand it better, but I'd rather do the right thing than what's easy!

Thanks again.

Dominic B. · Answer

Hi Andres,

In retrospect, saturated was probably the wrong word to use. There are definitely deals to be found but not like it was 2,3,4, years ago. Obviously, nothing unique to Roanoke. BP is a great start as are the meetups but I feel the BP community in Roanoke is still relatively small. Find a good commercial realtor that can approach it from an investors perspective. I'm sure BP Roanoke members can recommend a ton (I'd be happy to private msg you the one I use).

As for areas, I have city and county properties but am very keen to get into salem and Fincastle areas. But much like you, I need to make the move and learn those markets before I get my feet wet. Remote investing is not ideal :-)!

-D

Andrew Dunlap · Answer

Thanks for the response Bill. I don't have 4 properties, not sure what that's referring to. But you're definitely right in your observation that I don't know the market (I don't live there yet). Maybe there is a way I can learn from afar before the move? I guess this could be a great resource for that!

Which track to take for quick expansion?

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