New investor from OH

[Grace Strahl]

Hi everyone!

I am looking for general advice and resources on how to get started.  A lot of the resources I find are for people with no money to get started.  My situation is a little different.  My husband and I have about $100k to get started.  Our long term goal is to have enough passive income to quit our jobs, in say 10 years.

I am looking for a resource that will help me build a solid plan so that I can see a clear path to our future.  We have good credit.  Should we mortgage our first home and pay for rehab out of pocket and then refinance and do it again?  Pay cash all the way?  My fear is that we'll screw up in the beginning and lose what I see as a shot to retire early.  Any advice is welcome.  

Thank you for reading my post!

Grace

[Faisal Sami]

Welcome Grace !

This is a great place for ideas and advice. I have been off the forum for years as I was building my portfolio of rentals in Cleveland. But now I am back.

You are in a great position right now. You have cash and are at a point where you are close to making the plunge. The regular advice you will hear will be "due your due diligence", "interview several property managers", and " buy in the right areas". While this is all good and dandy, there is nothing like actually buying your first property, making mistakes, and learning and improving at your own ability to invest.

The most important thing I can tell you: BAD THINGS WILL HAPPEN. Once you realize and come to accept this as real estate investor, everything comes into perspective. I have had tenants skip town, new tenants bring in roaches and bed bugs into brand new units, perfect properties failing section 8 inspections, vandalism in the thousands at one of my apartment buildings, and the list goes on and on. No amount of due diligence, screening turn key companies, or interviewing property managers will every prevent this maxim of real estate from occurring over and over again. 

BAD THINGS WILL HAPPEN. It is one of the maxims of real estate investing and once you realize this, you will better prepare yourself to create great income streams.

I sat on the sidelines for several years with cash spending thousands on books and tapes learning strategies that most real investors don't even use. It was only after buying my first duplex years ago that I learned the cashflow game through experience and learning it by doing it.

If you have $100k,, GUARD IT CLOSELY. Start low and go slow. It sounds like you want to build a portfolio for yourself and might buy more than 3 investment properties. If that is the case you need to learn the BUSINESS of landlording. My first duplex was for around $34k, it made $950/month, much of which was stolen by successive management companies, until I fired them, and then my returns skyrocketed.

I started by investing with a "turn key" company. It seemed like a good proposition: the investor hands over a chunk of cash, the "turn key" provider produces passive returns for the investor for years. Several horror stories later, I can tell you that it is simply not that simple. But at the same time it is not that hard if you put in a little time learning the business of landlording and investing.

I started with ONE duplex. After working with 4 property managers all from the bottom 20% of the pool( I maintain that 80% of property managers are excellent........:)))  ,,  I decided to fire all of them and learn the business for myself. It was the best decision I made. Now more than 25 plus units later, I am in control of my portfolio and my money. But it all started with that ONE duplex. That might be a good place for you to start as well. :)

Best of luck !

Faisal