Where to start?

Question

My Story in the 80's my african american grandfather built a million dollar real estate empire. As a child as young as ten I would assist my grand father in building and maintaining the properties. I learned many valuable lessons about the real estate rental business. Unfortunately do to poor management, not riding the waves and stubbornness my grandfather lost everything and died almost broke. Watching him I always wanted to immolate his business. I work well with my hands and become a 5th yr apprentice in the plumbers union before 2008 hit. I'am Currently a License home improvement contractor and own a Garage cabinetry and walk in closet installation business. I went to college and have a small business management certificate and have some accounting course work as well. Through the years I have gained many contractor connections. I currently own my own home and have about $30,000- 40,000 in equity. My settlement is approximately $70,000.

My options:

1 - Rent my current home ( mother and daughter) and move to new location and work and live in location.

2 - Find a flip or rent and hold do work and let the chips fall where they may.

My Issue is

I dont have substantial provable income which will make it hard to get a conventional loan.

I dont have enough cash to buy out right in my area med home price about $300,000. around $150,000-$250,000 If it need work.

Looked into hard money and seems like loan sharking lol....

After many years I now know this is what i'am supposed to do with my life.

Any advice would be appreciated.

Thank you,

Sean

Donald Capwell · Answer

@Sean Dawson,my ou are in the right place, and asking the right questions. Jump up to the education tab and get yourself a free education. Start with the Ultimate Guide to RE Investing... While going through this, click on the links in each chapter to listen to podcasts and read forums / blog posts for each topic. Eventually, you'll decide on the strategy, and will have a plan for moving forward.Education first... Then ACTION! Don't sit on the fence once you know what you want to do and have built up a team and enough knowledge to do something. You'll learn as you go, but learn from other people's successes and failures, first. Welcome aboard, and good luck!

Paul Strauss · Answer

In your conversations, have you figured out if your local area rental property owner is looking to grow the portfolio? If so, there's an ideal buyer right there. You could go get something under contract and assign it for a profit if you know his criteria.

Sean Dawson · Answer

Currently, I have a associate that owns ten rental properties in my area. I have been picking his brain, but most of his properties are in low income area's ( Still debating). I plan on starting a LLC and My strategy is to buy and flip my first property. The profits i make from that combined with my current assets, build up enough cash to be able to go to auctions and buy properties for cash or partner. I also thought about building business credit and trying to purchase through the Investment business. In my area, Blue collar average home price $300,000 and great schools. There are many foreclosure's and auction that need work. I want to create rental properties , which are very sought after in this district. My concern is with the taxes $9000 - $12,000 will it still be profitable? The average 1 family - 3 bedroom rental is about $2000 - $3500 a month. There are very few rentals and I know this because i have rented and lived in the area for 8 years, before I purchased. My end goal is to build a rental hold portfolio and do flips as needed to be able to do this full time.

Sean Dawson · Answer

Thank you for the word on encouragement. I do agree knowledge is power, but knowledge unused is useless. There comes a time when you got to jump or forever be looking over the ledge. I been looking into this since the market crashed 2008. I have done a complete rehab on a 3 family, but had a bad partner. The cycle in on the rise and I think now is the time ( Election year) before interest rates rise.

Donald Capwell · Answer

@Sean Dawson what is your strategy? Will you be flipping? Buy/hold? Other? Have you built your team? Did you speak with other investors I your area, attend REI meetings, and get a mentor? The miney is not the first or even major concern if you get the right deal. Give us some more info, please...

Sean Dawson · Answer

Hi,I have already went through the guides and read some books. I just cant figure out how to break into the game without the income verification.

Cashmere Robinson · Answer

@Donald Capwell, well said, learn first, and then act. That is the key of success. @Sean Dawson Welcome to BP. Money is not the only thing you need to succeed, right? Taking right decision at the right moment is what counts. I wish you all the best.