180k cash and no idea where to start (FL) advice please

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180k cash and no idea where to start (FL) advice please

Christian Weber
Member since 2021 · 66 posts · 15 votes

So as the title says

I have 80k cash and 100k HELOC on my house I can use and have no idea what to do next. Based in South florida and it seems everything is so highly priced and getting bought by cash investors.

I have no idea on what to do - most agents I have spoken to have zero idea on flips or investor properties, no idea on how to get properties off market or what a wholeseller is and get annoyed when I ask questions because im not a cash buyer looking for a 3/2 for their kids with the white picket fence. The few "wholeseller sites" I am on just relist MLS listings with a higher price

Not looking to be a hard money lender as the risk isnt worth it to me with that

If you were in my situation what would you suggest I do.

Thanks in advance

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Ronald Allen Barney
Real Estate Agent · Tampa, FL · Member since 2020 · 411 posts · 373 votes
5y

You'll want to keep looking to build a "Core 4" team:  Agent, Contractor, Mortgage Lender, and Property Manager.  Starting out that may be difficult because a few too many professionals out there don't want to invest their time with first-time investors.  Keep plugging at it.  The agent should be investor-literate and if they only want to sell residential dream homes keep looking.  The contractor you will need for most purchases to make a property rent-ready, barring some that by luck come to you already in a ready state.  Mortgage lender you will build a relationship with over time so as not to have to start from square one every time you go to get funding.  PM I highly recommend even if you think you have the spare time to self-manage.  It's better to have a PM in place and ready for you to grow into needing one than to decide at a critical moment you've got more operational headaches than you can handle on your own.

Having potentially a $180k cash position puts you in a very good place to start straight into a fourplex+ for doors.  Finding the right deal until you have a good agent on your team will be challenging at first, but after you've closed a few doors you'll start to get a "nose" for it.  Some of the more successful investors I know work with an agent to find primarily off-market opportunities.  When they prospect for listing clients and find one, rather than go to the hassle of listing they can bring those sellers straight to you.

Be patient and persistent on team building and deal finding, and best of luck!

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  • Ronald Allen Barney
    Real Estate Agent · Tampa, FL · Member since 2020 · 411 posts · 373 votes
    5y

    You'll want to keep looking to build a "Core 4" team:  Agent, Contractor, Mortgage Lender, and Property Manager.  Starting out that may be difficult because a few too many professionals out there don't want to invest their time with first-time investors.  Keep plugging at it.  The agent should be investor-literate and if they only want to sell residential dream homes keep looking.  The contractor you will need for most purchases to make a property rent-ready, barring some that by luck come to you already in a ready state.  Mortgage lender you will build a relationship with over time so as not to have to start from square one every time you go to get funding.  PM I highly recommend even if you think you have the spare time to self-manage.  It's better to have a PM in place and ready for you to grow into needing one than to decide at a critical moment you've got more operational headaches than you can handle on your own.

    Having potentially a $180k cash position puts you in a very good place to start straight into a fourplex+ for doors.  Finding the right deal until you have a good agent on your team will be challenging at first, but after you've closed a few doors you'll start to get a "nose" for it.  Some of the more successful investors I know work with an agent to find primarily off-market opportunities.  When they prospect for listing clients and find one, rather than go to the hassle of listing they can bring those sellers straight to you.

    Be patient and persistent on team building and deal finding, and best of luck!

    3Reply
  • Christian Weber
    OP
    Member since 2021 · 66 posts · 15 votes
    5y
    Originally posted by @Ronald Allen Barney:

    You'll want to keep looking to build a "Core 4" team:  Agent, Contractor, Mortgage Lender, and Property Manager. "

    0Reply
  • Duriel Taylor
    Realtor · FL · Member since 2013 · 372 posts · 83 votes
    5y

    @Christian Weber the first question I would ask myself if I were in your shoes would be, “what do I want; 2x-4x my money in a short period of time (rehab projects) or do I prefer to build long term wealth (rental income)?” Once you have that conversation interiorly, then I would advise you seek an investor friendly agent and one with years of experience then said agent should be able to help you. 

    2Reply
  • Ronald Allen Barney
    Real Estate Agent · Tampa, FL · Member since 2020 · 411 posts · 373 votes
    5y
    Originally posted by @Christian Weber:
    Originally posted by @Ronald Allen Barney:

    You'll want to keep looking to build a "Core 4" team:  Agent, Contractor, Mortgage Lender, and Property Manager. "

    Okay, given what you describe of the market you're in you may want to pivot the strategy to SFH in A-class neighborhoods that are distressed enough to not be overbid by thirsty buyers. Cruise good neighborhoods and on each street find the worst-looking property on it. Bang the door. Make a good pitch. Leave your card and professional-looking literature. If their response is anything but an automatic flat "no" you CAN make that deal eventually even without an agent (get a good title company that will walk you through the direct sale process). Some of the cash can be used to rehab the property, use Rentometer to find a good strategic price point for renting, and collect cash flow.

    1Reply
  • Christian Weber
    OP
    Member since 2021 · 66 posts · 15 votes
    5y
    Originally posted by @Duriel Taylor:

    @Christian Weber the first question I would ask myself if I were in your shoes would be, “what do I want; 2x-4x my money in a short period of time (rehab projects) or do I prefer to build long term wealth (rental income)?” Once you have that conversation interiorly, then I would advise you seek an investor friendly agent and one with years of experience then said agent should be able to help you. 

    Thank you for the reply

    Initially I would like to do some flips if even a flip to rent out situation for a year before selling unless it is cash flowing really well. That way I can build up more cash to invest 

    The aim down the line like everyone is to have a bunch of properties to help with building wealth etc. The standard thing that a lot of people want

    0Reply
  • Christian Weber
    OP
    Member since 2021 · 66 posts · 15 votes
    5y
    Originally posted by @Ronald Allen Barney:

    thanks again, Other than driving for dollars is there any other suggestions you might have for getting distressed properties from wholesellers etc i.e. getting on legit mailing / email lists. I dont mind doing that for the first few flips so I can get started sooner.

    0Reply
  • Ronald Allen Barney
    Real Estate Agent · Tampa, FL · Member since 2020 · 411 posts · 373 votes
    5y
    Originally posted by @Christian Weber:
    Originally posted by @Ronald Allen Barney:

    thanks again, Other than driving for dollars is there any other suggestions you might have for getting distressed properties from wholesellers etc i.e. getting on legit mailing / email lists. I dont mind doing that for the first few flips so I can get started sooner.

    I can't speak from personal expertise in the area of finding wholesaler mailing lists, but I do know there are sites such as happyinestor, connectedinvestors, udemy, hudforeclosed, et al., that can help you find deals.  If there is an investor's club or social group in your area it will always be worthwhile to join and network.  Even if they seem to deal-hoard, there will often be times when they find something they can't act on and will toss it up to the group in good will.

    0Reply
  • Marc RiceBusiness Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
    5y

    You should find a good investor friendly agent in the market you want to invest in. They should have access to wholesaler lists as well and should help guide you to good PMs, contractors, and lenders.

    [email protected]614-363-2787
    Marc Rice | Investor Friendly Agent at Reafco Tailwind Team574 Reviews
    WebsiteView Page
    0Reply
  • Reginald Ross
    Rental Property Investor · Gulf Shores, AL · Member since 2019 · 107 posts · 115 votes
    5y

    @Christian Weber

    Have you considered passive investment as an LP?

    0Reply
  • Christian Weber
    OP
    Member since 2021 · 66 posts · 15 votes
    5y
    Originally posted by @Reginald Ross:

    @Christian Weber

    Have you considered passive investment as an LP?

    Hi RR - truth be told I dont quite know what that means. Care to explain like I am 5

    0Reply
  • Jeffrey Donis
    Investor · Durham, NC · Member since 2020 · 1k+ posts · 691 votes
    5y

    I agree with @Ronald Allen Barney. You're team is key. Go to networking events in your area to meet the best via word of mouth referrals. 

    0Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    5y

    IMO, you have 2 questions to answer: 1) What type of property do you want? LTR/STR/SFH/Duplex/Multi? 2) Must it be turn-key, will you use a Contr., or are you willing to put in some of your own sweat?

    And then wait....this is not the time for you, grasshopper....

    1Reply
  • Henry Lazerow
    Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes
    5y

    The wholesalers tend to sell JUNK for over the price it's really worth to newbies. Just study a market and figure out the average cost per a unit and buy a deal at the very bottom of prices per a unit. No one in 2021 is going to sell you something under market being realistic. Maybe if we get a crash but not right now. 

    1Reply
  • Christian Weber
    OP
    Member since 2021 · 66 posts · 15 votes
    5y
    Originally posted by @Bruce Woodruff:

    IMO, you have 2 questions to answer: 1) What type of property do you want? LTR/STR/SFH/Duplex/Multi? 2) Must it be turn-key, will you use a Contr., or are you willing to put in some of your own sweat?

    And then wait....this is not the time for you, grasshopper....

    Again tanks for the input

    Dont really care the type of property - short term rental will work esp with people being more remote these days. I just know I dont want to buy in the ghetto. no problem with section 8 at all (as I will vet the hell out of the candidates and a guaranteed check is a solid thing). Basically im open to all real estate options

    Only turn key if it is a short term rental with a bunch of Air bnb booked out already, I have a solid contractor who is good and very affordable so dont mind a dump at the right price

    0Reply
  • Christian Weber
    OP
    Member since 2021 · 66 posts · 15 votes
    5y
    Originally posted by @Henry Lazerow:

    The wholesalers tend to sell JUNK for over the price it's really worth to newbies. Just study a market and figure out the average cost per a unit and buy a deal at the very bottom of prices per a unit. No one in 2021 is going to sell you something under market being realistic. Maybe if we get a crash but not right now. 

    So what would you suggest as we are living "right now" haha dont mean for that to sound d1ckhead ish. just wondering on what you would suggest

    0Reply
  • Robert TinkerPro Member
    Rental Property Investor · Round Rock, TX · Member since 2019 · 246 posts · 159 votes
    5y

    @Christian Weber I'd start with a PM first. They know the good and bad areas of town. Especially if they also run a realty office too. They also know other investors who have properties that might be available for off market deals. Often know contractors. Talk to them before you have a property. That's when they'll give opinions and ideas not influenced by monetary gain.

    0Reply
  • Grey Stone
    Investor · Palmdale · Member since 2016 · 112 posts · 80 votes
    5y

    One of the absolute best and easiest ways to get started is by renting the home you are currently living in and buying a slightly bigger home to move into....assuming you own the home you're living in. If you do not own any rentals, it may work in your favor because you can buy a multifamily with better terms if you live there for atleast a year. After a year you can move out, buy another and so on. That imo is by far the easiest and cheapest way to get a portfolio. This is how I started and soon was able to buy properties with the cash flow from my properties. As long as you buy right, and have a few ways to make the numbers work, you will be good. And finding an investor friendly agent is awesome, but more importantly is finding a local investor friendly lender. This is much more valuable. If you don't have a huge portfolio or can pay cash, your lender can vouch for you and even refer you to agents that can help. The easiest way to build a team is to use the best people in your area and ask for referrals. You really get so much in RE by the quality of the relationships you have.

    1Reply
  • Christian Weber
    OP
    Member since 2021 · 66 posts · 15 votes
    5y
    Originally posted by @Grey Stone:

    One of the absolute best and easiest ways to get started is by renting the home you are currently living in and buying a slightly bigger home to move into....assuming you own the home you're living in. If you do not own any rentals, it may work in your favor because you can buy a multifamily with better terms if you live there for atleast a year. After a year you can move out, buy another and so on. That imo is by far the easiest and cheapest way to get a portfolio. This is how I started and soon was able to buy properties with the cash flow from my properties. As long as you buy right, and have a few ways to make the numbers work, you will be good. And finding an investor friendly agent is awesome, but more importantly is finding a local investor friendly lender. This is much more valuable. If you don't have a huge portfolio or can pay cash, your lender can vouch for you and even refer you to agents that can help. The easiest way to build a team is to use the best people in your area and ask for referrals. You really get so much in RE by the quality of the relationships you have.

    Ok super helpful but I have some questions - I currently rent our the 2 of the 3 rooms in my house so at least live for almost free but I was informed that if I wanted to buy another home I had to

    1) if it wss far enough away could go with an vacation home loan 

    2) I could use the FHA MFH loan (current loan is conventional mortgage) but only if I could qualify without needing to take the income from my current house (I would rent it) into consideration because you need to be over 100miles away I was told to be able to use the FHA loan and take income from a rental property into consideration

    3) put 20-25% down and do conventional financing and I dont have that for a MFH not in the hood and would require a cash out refi and not a HELOC as I wouldnt be able to pay it back fast enough or a HELOC

    4) not take the current home into consideration, get approved for what I can with an FHA and 3.5% down and then pay out of pocket to get a property on the gap between the FHA max I am given and the home price

    I am open to your thoughts as I thought I could just turn current home into investment property (over 50% equity) and then go FHA with a MFH and move in. But several lenders told me no, cant do that

    0Reply
  • Luis Malvar
    Orlando, FL · Member since 2019 · 12 posts · 5 votes
    5y

    Please someone correct me if I am wrong.... To my understanding you can't rent your primary home with a FHA loan in the first fiscal year of buying, after that you can house hack with leases( in order to be able to depreciate that part of the house) and have more income so you can buy another house but it has to be 50 miles away or more from your home if you want to do another FHA loan, if you use conventional loan it doesn't matter the distance... right?

    0Reply
  • Christian Weber
    OP
    Member since 2021 · 66 posts · 15 votes
    5y
    Originally posted by @Luis Malvar:

    Please someone correct me if I am wrong.... To my understanding you can't rent your primary home with a FHA loan in the first fiscal year of buying, after that you can house hack with leases( in order to be able to depreciate that part of the house) and have more income so you can buy another house but it has to be 50 miles away or more from your home if you want to do another FHA loan, if you use conventional loan it doesn't matter the distance... right?

    I believe it has to be 100miles away and that you need to live in it for at least 12 months. which I wonder how is everyone doing this time after time with FHA loans like the you tubers etc tell us they do.

    0Reply
  • Luis Malvar
    Orlando, FL · Member since 2019 · 12 posts · 5 votes
    5y

    @Christian Weber

    Maybe if you buy using a conventional loan the 100 miles rule doesn’t apply

    0Reply
  • Christian Weber
    OP
    Member since 2021 · 66 posts · 15 votes
    5y
    Originally posted by @Luis Malvar:

    @Christian Weber

    Maybe if you buy using a conventional loan the 100 miles rule doesn’t apply

    It doesnt, but then you go from 3.5% down to 20-25% down on the property.

    0Reply
  • Account Closed
    Flipper/Rehabber · New York, NY · Member since 2019 · 340 posts · 122 votes
    5y

    @Christian Weber well your main goal should be finding distressed properties to scoop up and flip. Jane you thought about strategize ways to be in front of distressed homeowners then offer them cash for their home?

    0Reply
  • Salvatore Lentini
    Rental Property Investor · Doylestown, PA · Member since 2008 · 1k+ posts · 1k+ votes
    5y

    Hi @Christian Weber - you need to start generating leads.  It takes a lot of "no's" before you get a yes.  Zero in on an area, zero in on a strategy, map out your plan and diligently follow it everyday.  If you're all over the place with haphazard effort you'll never get your 1st property.  Remember, there's no "ONE" right way.  You just need to figure out which way works for you.  That's one of the major points I teach my online students.

    1Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    5y
    Originally posted by @Account Closed:

    @Christian Weber well your main goal should be finding distressed properties to scoop up and flip. 

    Yep, this is the absolute best way......but - you have to be able and willing to do a lot of the work yourself. Not everyone can do the electrical/plumbing Etc, but everyone can demo, sand floors, paint, and that kind of easy stuff. If you buy distressed and just hire a contractor, you'll be spending almost as much (or sometimes more) as if you'd just bought it in good condition. You can find everything on YT nowadays, or take classes at Home Depot.

    0Reply
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