First property in MPLS, whats next?

[Joey Wilson]

My wife and I have been interested in getting into real estate for a while, and one thing I knew for sure is we didn't want to pay retail. I started thinking "how are we going to find a property for a good deal, especially in this market!?" We have been renting for four years in a condo we love, 5 minutes from downtown Minneapolis. I thought, why not ask my landlord if he will give us a deal since i've spent $1400/month for 3.5 years already. It's a 1500 sq ft two level 2 bed 2.5 bath built in 2006. It got appraised at 215k and we ended up closing on the condo for 185k. So I felt like that was a blessing/win that he gave us a pretty good deal. 

That being said, this is the start to our journey and there are so many different routes we can go with real estate. Many experts have many different opinions, so my brain sometimes overloads with info lol, and the reason i'm writing this post is to network and get some feedback to maybe what you guys did next in my situation to have success moving forward!!?

Thanks so much for all the great info in the BP forums!!

[Amber Gonion]

@Joey Wilson my advice would be this, there are two types of investors one who has a nest egg of money that waits for months and sometimes years for only good deals that come along. They do fine, they sometimes find out that the “deal” they got has hidden issues, but they cash flow and never take much risk and earn money very slowly building up units. I call this investor the hobbyist.

The other type of investor is willing to buy a property at retail right away, he doesn’t overpay, but is able to get a doors earning quickly, he then is in the hunt for the next property as soon as he is able and adds doors which further increases his saving power for the next property and so on. This investor is called the machine because he systematically keeps acquiring properties like a machine.

Both make money, the hobbyist is safe, but leaves money in the bank instead of adding more units. The hobbyists saves on the upfront costs, but does not start earning right away and isn’t able to add units (aka cash flow, principle pay down, and appreciation). The machine quickly adds units and every month is earning much more in the big three (cf,pp,appreciation) that the hobbyist because he has multiple units working and expanding.

There is nothing wrong with either approach, but the machine clients we have quickly are in the business of real estate. It is just like when your financial advisor tells you if you start putting money away for retirement at 22 vs 40. The earlier you start the better. The same with buying units, don’t wait too long to buy a unit at a discount it will cost you money (opportunity costs) while you wait. Our most successful investors are the ones that follow our advice and find repeatable investments that work with their skill set.