Our Strategy starting out - Build to Sell

[Leilah Davis]

Hi all! I'm new to real estate investing and figured I'd start a thread to document the journey. Feel free to offer input/advice as I'm looking to learn from those more experienced and successful than myself. 

A bit of background - My husband has 9 years of experience in construction. He's the director of operations for a large general contractor with 52 employees under him at the moment. He has also dabbled in real estate investing, which he began before I met him. He bought his first home, the home we currently live in, about 7 years ago. It's a duplex and he rents out the other half, which was enough to cover his mortgage and bring in a bit of extra cash each month. About 3 years ago he bought his second property. It was a complete distaster (it had been abandoned and was completely infested with pigeons. I mean pigeons and pigeon poop EVERYWHERE. Pigeon nests and eggs too...) But he fixed it up and has had both units rented out for the last 2 years! He's been very lucky with great tenants in all three units. 

Meanwhile, I have 5 years of experience in a completely different industry. While I love the industry I work in, my current job is horrible and I'm ready to start the journey towards financial freedom. I've quit my job and will be leaving mid-December. I don't make very much at my current job, and we can afford to live on my husband's income for awhile, so we've set a pretty low bar goal of $30 - $40k in the next year through REI.

So here's our plan: I'm currently getting my real estate lisence and hope to have that by January. We're looking for en empty lot in downtown New Orleans (where we live) to buy and we plan on building a house to sell. We've run the numbers and we think we can make about $30 - $40k in one new construction deal. Not as much as we had initially thought, but it's something! We currently have enough that we can do the deal entirely with cash. If that goes well, we'll roll the cash from that deal into the next one and do it again. After that, depending on how those two deals go, I think we'll want to pick up the pace a bit. Even though my husband has more experience in REI, this whole thing is really going to be my baby. He'll help me along the way, but I plan on doing the majority of the grunt-work (finding the deal, finding the contractors, managing the project, finding the buyer etc). I'm also interested in pursuing wholesaling on the side, although I haven't done as much research about that.

It seems like most of the investors on BP invest using the BRRR method or they are wholesaling. I've hardly come across any investors who spend their time building new construction homes. What's the reasoning behind that? Although the two properties my husband currently owns are cash cows, he doesn't have any interest in doing that kind of deal again. He doesn't like the risk involved in buying a property and not knowing what type of issues you might run into. He also doesn't enjoy being a landlord so much. He's the type of person that is never going to feel comfortable hiring someone else to do the work, when he knows it would take half the amount of time and half the amount of money if he just did it himself. So he always ends up doing the work himself, which is pretty much the opposite of "passive" income.

So this is where we're at! The biggest thing for me right now is to focus on finding a good deal on a lot to buy in the next few weeks, get my real estate lisence, and learn more about wholesaling to see if that's something I can try my hand at. (And meanwhile still working 50+ hours a week at my day job, yikes!) Can't wait to hear from everyone on thoughts, insights, opinions, etc. :)