Ramblings of a Real Estate Amateur

[Andrew M.]

In an effort to publicly state goals, gain insight from other (and more experienced) investors, and write down lessons learned, this is a run on stream of thoughts about all that investing involves.

My goal for 2017 was to purchase 6 buy-and-hold properties, your typical 1% deals, all within my local metro area. It started with the last 4 months of 2016 by networking, interviewing contractors, stating and writing down criteria, and processing deals. My wife and I ended up purchasing a primary residence at the end of last year that I've previously written about, and after a cash out refinance and rehab, has about $100,000 of equity. Within 5 weeks of February and early March, we closed on two deals that will each cash flow between $400-500/month (not including vacancy). Another deal may be closing by early April (with respect to the options period), and it is a far cry from what we are used to. It was built in the 1920's and is a beautiful home in a quickly appreciating part of town. Cash flow will be only slightly lower than the other two.

Items learned so far:

1. Do what you are good at. Delegate the rest. My wife is great at dealing with contractors and the arranging of schedules, therefore she does it. I find passion in finding the deals and typing the numbers into a spreadsheet displaying returns, all in cost, etc, along with the other financial aspects. Seriously, stick an arrow through my heart when a good deal gets put into the formulas! 

2. Once you give yourself a good foundation, you literally have to fight the momentum if you want to stop progressing. Deals start coming from left field and a new sense of confidence settles in. Just be sure to stick to your criteria, unless you have a very good reason to change. Be quick to make up your mind and very slow to change it.

3. Property management is amazing. We finished renovating our first house, and handed the keys to a property management team that we have built a relationship with before leaving for Bali and Australia for 3 weeks last month. This is why we invest, right??

4. I'm trying to find that balance between getting started and letting others do the labor so you can expand the business. But part of me still wants to mow the lawns of a vacant rental and do some odds and ends that the handyman charges too much for. Where is the dividing line where on one side you could easily do these tasks but are too lazy, as opposed to you are getting in the way of yourself if you don't pay someone to do it?

5. You can never have too much private money lined up.

6. Always do the right thing. The only part of your career you can't fix is your reputation.

7. If you are married, get on the same financial page as your spouse like your life depends on it. Once we did, our net worth went from very negative to positive in a short period. Even if the other person doesn't want to actively take part in the daily actions of your business, they need to be included in the overarching decisions. 

8. This is a hypothetical. If you could save $1,000 a month for real estate, how would you invest it? What about $5,000/month? What about $10,000; $20,000, $30,000/month? At what point do you scale up to multi family, larger apartments, commercial? Does it have to do with your knowledge, cash on hand, relationships built, or a combination of all the above?

A winding post with no plot, but needed to air out that laundry!