New investor, overwhelmed by choices, analysis paralysis...help!

[Dan Pearson]

Hey guys, thanks in advance for reading my post. My goal is to build a solid managed real-estate portfolio that generates at least $10k of cash flow a month. I'm willing to do whatever it takes to accomplish this, whatever amount of work this takes, doesn't matter.

The problem is I have an overload of information and lots of fear about pulling the trigger. 

I subscribe to multiple real estate investing blogs, have a subscription to Mashvisor and RealtyTrac, and can't seem to make a decision about strategy or area. For strategy I'm leaning towards multi-family 4-plex units because I like the idea of consistent cash flow, and vacation rentals kind of turn me off because it's so seasonal and under attack from counties who have a housing affordability crisis (re:everywhere). I've heard investing in Ohio, Florida, Tennessee and Texas are good bets. Knowing specific neighborhoods of cities would be very helpful to know. From my research, it seems like the best cash-flowing neighborhoods are also somewhat sketchy as far as neighborhood, crime, and schools. Is this always the case?

Regarding the fear, I've been burned in the past by my realtor, lender, contractor, property manager, and tenants. Bought a condo in Reno in 2008, and pretty much everything that could have gone wrong...went wrong. I ended up selling a few years ago at a loss...I just don't want to get burned again. Because I've been burned I'm pretty sure I can now separate the professionals from the con-artists, and from what I've read the pending recession won't affect affordable housing that much, given there's a lack of affordable housing everywhere. Thoughts?

Any advice from any seasoned pros out there? I've been shopping for years, and I need to pull the trigger on SOMETHING, for my own sanity. Looking for tips on getting great deals, advice about areas, dealing with fear, and anything else that would be helpful.

[Brandon Sturgill]

Hey @Dan Pearson welcome. You make some good points...and the beautiful thing about this industry is there is a 1,000 ways to make money...and a version of each one of those. I think you can boil it down to simplify.

Choice 1

• A. Use your own money and leverage...grow slowly and steadly and do this on your own
• B. Use other peoples money and scale quickly with lots of strings attached

Sounds like you're on choice A, so now its just a matter of sticking to fundamentals. You want passive income, and that can come from lots of different asset types...but it sounds like you are leaning toward multifamily (good choice). Now the next question

• A. Small MF (under 5-units)
• B. Commercial MF (5+ units)

You mentioned you like 4-units, so you're leaning toward small MF. Your goal is to buy at a discount to speed up your equity build...so, next question

• A. Source your own deals and work directly with sellers
• B. Work with an industry professional

It sounds like you want to ease in slowly, so maybe an industry professional is the best approach. Now its just a matter of running numbers. Set your criteria and thresholds for returns...when you see something close, pull the trigger...close, not perfect.

Aside from that, your #1 skill to survive in this industry is understanding how to structure a deal...there are lots of ways to do this, but only a few make good sense...remember, fundamentals (buy-and-hold...buy at discount). Learn more about working directly with sellers and structuring purchase money mortgages.

There is typically a natural progression for folks that start in the small MF arena. Eventually you'll scale to larger acquisitions and get to that $10k/mo. in cash flow.

Best of luck