New to investing. Inherited property in Reno. Advice?

Question

My brother and I recently inherited rental properties in the Reno, NV area. I want to build my portfolio there and really have no idea how to get started.

I also have the home that I live in with my husband and two kids.  We have quite a bit of equity, but the house needs work, and it’s in California.

Need advice on what to do to get the ball rolling. I want to be financially free, and think that I can leverage what I have to begin moving in that direction

Thank you!

Scott Jensen · Answer

@Jessica Sawyer I agree with @Brenden Mitchum. Start with education. Read the millionaire real estate investor by Garry Kellar and Set for Life by Scott Trench. You have plenty of time to get things figured out. Start slow, don't rush into anything before you're confident in your education. And keep visiting the BP forums!  Best of luck.

Brenden Mitchum · Answer

Hi @Jessica Sawyer, welcome to the BP community!

The first two steps that I recommend to anyone getting started in REI is 1. Education and 2. Goals.

By thoroughly educating yourself on the topic and setting a 5 year vision plus smaller goals that get you to that vision, you will quickly find the strategy and path that is right for you.

Since real estate investing is so complex (not difficult) it is hard to give someone advice on what they should do to get started. That being said, one of the barriers to entry is capital. If you can take a heloc out on your primary, this could give you the capital you need. You could even refinance after fixing up a few things (rates are quite favorable for this at the moment).

Please, feel free to message me anytime if you have other questions or just want to chat! Always happy to help out a fellow Californian!

Bill Schrimpf · Answer

@Jessica Sawyer - Thanks for posting!  My condolences for how you acquired the new property.  I do hope that in the long run, it helps your family find financial freedom!

I’m a Realtor and small-time investor in Reno.  I’ve helped a few people from CA buy investments or relocate to Reno over the past few years.

I’m happy to lend an ear and discuss the local market, lenders, CPA’s, insurance, etc.  Because you and your brother have other properties, you have some options, depending on what “financial freedom” means to your family.

Please give me a call or PM if you like.

Have a great day!

Charlie Lipthratt · Answer

@Jessica Sawyer - You mention your significant other isn't on the same page yet.  Is your brother? If your father purchased these properties a while back, you two might be able to refi the inherited rentals for next batch of capital.

Ellis San Jose · Answer

I suggest you study property management before you grow the existing portfolio too quickly.  This will give you the confidence to add more properties.  You may think just outsourcing & hiring out to a management company is the easy solution, and it could be, however, management will make or break you. You have to know how to manage  & oversee that relationship.  The next step is to learn acquisition, please take your time on this step.  I have seen many investors grow too quickly and overly enthusiastically buy more rentals at the wrong price & the wrong time in the cycle.  There is lots of info here on BP, but it is a lifelong learning on how to invest wisely in RE.

Brenden Mitchum · Answer

@Jessica Sawyer

So I have actually never read Rich Dad but from hearing so many people talk about it I get the feeling it's more geared towards mindset rather than real estate strategies and actionable steps. For this you definitely want to read books like The Millionaire REI. Another good one for you would be Brandon Turner's The Book on Investing with No and Low Money Down. There is tons of information in there that you will find very useful.

Now, let's talk capital. Obviously, the equity in your home would be an awesome source of starting capital, and this is actually how many investors get started. That being said, if your husband isn't on board that is definitely not an option. So your focus right now should probably be getting him on board. Even if you don't HELOC or refi, you'll likely have a very hard time getting started if your number 2 is not on the same page. Do either of you have w2 income?

If neither of you have w2 or two years of 1099, then you will likely be out of luck for conventional, but still check with your lender to see what you need to qualify. If you are not able to refi/HELOC and you do not have other investments like stocks, 401k or IRA to use, then you will have no other option than to find OPM (other people's money). This comes in many forms, which Brandon thoroughly covers in his books. You could find a property whose owner is willing to carry the note. You could ask friends and family to invest with you. You could find a partner through BP or your local real estate group(s). There is also hard money but you will likely need some skin in the game (10-20% down) and this only works for rehab deals.

Don't let capital stop you from getting started though. If someone walked up to you right now and handed you $100k, do you have a solid deal lined up to put that into? If not, how long would it take you to find a deal? Set yourself up so when the capital does come (and it will), you will be ready to put it to work.

Jessica Sawyer · Answer

@Alexander Yates thank you! That would be great. But I actually live in California. My brother is out there, and he is my partner, so if you guys could meet up that would be great! We have a property manager for two of our properties. They seem pretty decent so far. I literally yelped them and found the company with the highest ratings and most reviews. But any recommendations you have are always great to hear.

What type of investing are you into in the area if you don’t mind me asking?

Jessica Sawyer · Answer

@Scott Jensen thanks so much scott. I’ll look into the book that you mentioned. I have read Rich Dad Poor Dad which has completely changed my mindset. But definitely the more education I have the better.

Jessica Sawyer · Answer

@Ryan Luby thanks so much Ryan. Yes, I live in California, while my three rentals are in Reno where my dad lived before he passed. My brother is in Reno and we share those properties. I would like to buy in Reno because the market is strong, and more and more industry is moving there.

Jessica Sawyer · Answer

@Brenden Mitchum thank you so much! I’ve been listening to the bigger pockets podcast starting from episode 1, and read Rich Dad Poor Dad. And joined a local real estate investment group in my area. But really, with my situation I just don’t really know how to start. I guess my main question is how do I get the capital to begin? I’m a newer business owner, so I don’t think that I would qualify for any kind of bank loan. I have to convince my husband that we can refinance, or do a HELOC on our current home since we have quite a bit of equity. But in that capacity I’m pretty lost. So any advice on how you got started there would be great.

Thank you!

New to investing. Inherited property in Reno. Advice?

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