Newbie from Carrollton area (DFW)

[Hong Tran]

Hi everyone! So thankful for such an amazing portal of endless resources, contacts, and topics for real estate investors. I am gearing up in preparation for my first deal. Looking for SHR and/or multi-family. While I have some liquid reserves on hand, I like to see what other sources of capital I can easily tap into. Would like input on whether I should take out a HELOC on my house which equates to $70-$75K as an added source of investment capital. Additionally, is it advisable to borrow from my 401(k)? Pros/cons on both please... Thanks!

[Michael Lee]

Hello and welcome to BP! HELOC should be one of the last ways you can do it. If you can borrow money from an existing account, I would have to see what it's terms are compared with the return your expecting and compare the two. I would try to get a small apatment complex at first. Multi-unit small apartment complexes are where you should start. You will have lass competition as opposed to SFH which has a bunch of competition. The higher the repairs or renovation needed have less competition.

Be creative with your financing and try to stay away from HELOC's if you can. If you have to use a HELOC no it's terms and abide by them to reduce your cost. I have been in Dallas County for most of my 60 years and I've seen a bunch happen. I tend to be opinionated than others. I found BP about 21 months ago while medically recovering. I am starting to look at my options because I still cannot walk and it has been over 6 years since I had that problem eventhough I thought originally I thought it would only take six months to be able to go back to work. Boy was I wrong and did not know any better.

I have spent some time on YouTube learning about real estate investing and I read a couple books a week.  I can tell that your confidence will increase as you learn more.  I have learned a bunch through writing things down have increased my knowledge which I learned back in college.  At that time I thought that real estate would be easier to get into but instead I got into the construction business instead because that was what I felt more comfort in.

Also. at that time my father made it look more simple.  I realize it took more than what I thought it could be.  He made it look so easy but I soon learned it took more and I did not think I could easily pursue that.  I have been looking at something more flexible to do than a regular 9 to 5 job.   I thought that I could make that change easily and pursue real estate because it was emphasized in my college business degree and I had held a broker's license for about 30 years eventhough I never did that full time.

I was found by a guy named Lance Edwards who wrote a book about how he got his start on small apartment complexes part time while working on a W-2 job that he hated.  It took him about two years to be making enough to cover his bills and quit his job.  He later got into larger projects and did well.  He now does some teaching his way of making it, and anyone could do it and make a living.

At first I really got into showing up at county property tax certificates and deeds but backed out because of the increase of bidders at the county sales.  Now I am into rental property and positive cash flow and tax incentives.  I have only done one investment deal for myself I do not have a bunch of experience to share with you.  

The bulk of my experience has been in the construction business.  I worked there since I was 17 including those college years.  My father has been in the real estate business for about 45 years and he has taught me a little bit eventhough the bulk of his experience has been commercial buying and selling.  He has had a good talking that has helped him.

I am sorry that this is so long but I spent about half of my time telling you all I know.  The rest will come later if I get the chance.  I have lived in Coppell for about 33 years.  I was born and raised in Dallas.

Good luck to you!