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Updated almost 11 years ago on . Most recent reply
![Jason Rodriguez's profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/165577/1621420702-avatar-jrodriguez78.jpg?twic=v1/output=image/cover=128x128&v=2)
Newbie from Tampa, FL - Looking to Change My Career
I’m Jason Rodriguez from Tampa, FL. I am 35 years old and am considering real estate investing as a career change. Now is probably the right time for me to do this. But first I need to learn much more about it and find people who can help me make smart decisions.
Here’s my current situation:
• I own a 3/2 house in Ocala, FL (I own free and clear and pay $4,400 per year in expenses – insurance, taxes, bills). The house is in a 55 and over community and is 80 miles from me. It’s listed for rent at $750/month. Currently no tenant.
• My only debt is the mortgage on my primary residence. I owe $165,000.
• I have $150,000 in various investment funds and high-yield savings, as well as a $20,000 in an emergency savings account. I can move this money anywhere at any time without penalty.
• My 401(k) currently has $80,000
• My Roth IRA has $1,800
• I work a full-time 9-to-5 job that I don’t enjoy. It has allowed me to make and save money, but I don’t enjoy going to work, and most of my time and energy goes into my job. I need more flexibility and control over my time and schedule. I need more freedom to do things I truly want to do.
• I’m currently working with my financial advisor to develop an exit strategy and business plan for transitioning to a career in real estate investing.
• One of my biggest concerns is health insurance. My situation is unique because I have one lung, and I have to get CT scans every 6 months and see my pulmonologist several times per year. I must have health insurance and have always assumed that if I don’t have employer-provided health insurance, I could be in trouble.
Starting out, here’s what I’m looking for:
• Guidance, advice, and ideas on how I – given my current situation – can achieve greater financial freedom
• Networking opportunities with people in the Tampa Bay area
Thanks in advance for your thoughts and ideas. My experience on this site so far has been great. A very helpful resource, and I love the podcast!
Jason
Most Popular Reply
![Buddy LaRue's profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/81668/1621415706-avatar-buddylarue.jpg?twic=v1/output=image/cover=128x128&v=2)
Wow, you do have a rather unique situation.
I'm on the other coast of Florida, so I can't help much with Tampa area, but here are a few thoughts about the investing aspect.
Real Estate investing to become financially free takes time. Don't rush it or you'll end up buying bad deals. Analyze the properties carefully. My recommendation would be to find properties with a 100% return on capital gain (minimum) and a minimum of a 10% cash-on-cash return. I recommend this because you're building wealth at the same time you are building cash flow. Some invest only for the cash flow, I prefer the best of both worlds. These deals are not always easy to find, and you may have to analyze a large number of properties before you find one that makes sense. Don't get discouraged through the process, it WILL take time.
Build a team of people you can trust, and even when you trust them, always run your own numbers to check on everything. Though I am licensed and consider myself pretty good at what I do, I set up a series of checks for my clients so they know they're getting a good deal. I recommend that not only do they get every property inspected, but also get two or three repair/make ready bids on each property, at least a desk-top appraisal by an independent appraiser for the ARV (don't go just on what I say, pay the $100 to the appraiser to get another professional opinion on that ARV). Overall, double check EVERYTHING at every step through the process and get as much done as you can during your inspection period so you can back out of a deal and get your EM deposit back if needed, with the lease amount of hassles.
Don't rely on properties increasing in value (speculation). That got a lot of people into a lot of trouble when the market turned this last time. If you start working with an agent who says anything like "in a couple of years, it will be worth a ton more" RUN - DO NOT WALK- away from this person. They don't know how to work with an investor.
Be careful if/when you work with wholesalers. I've seen many wholesalers inflate after repair values to astronomical heights to entice a buyer. Some are reputable, but many are not. Stick with your checks and balances to ensure you are getting a good deal.
Leverage as much as you can. I'm not saying go for 100% financing, but do use other people's time, knowledge and money for as many deals as you can. Yes, it may cost you some money, but if the returns are high enough after the costs, it's worth it.
You mentioned the property you have in Ocala is in a 55+ community. My recommendation would be to not purchase in these communities (HOPA communities). You're restricting not only the pool of tenants for these properties, but also your exit strategy. If you don't have the property rented at $750/month, contact an agent in the Ocala area and ask them to run some rental comps for you (preferably in the same complex). There are usually only three reasons a unit goes vacant for any length of time: Cleanliness, condition, or price. Make sure the unit is clean, in great condition and priced appropriately for the area in which the property is located.
You are wise to stay close to your home base to look for properties. My thoughts have always been that your properties should be within a 1/2 hour drive from home or work. I have had some clients go further out, but if they're too far you'll not be happy when the toilets need fixing, or driving for 2 hours to show it to a prospective tenant.
Manage your own properties until you have at least 10 properties, then maybe consider hiring a property manager. If your properties are in excellent repair when you first rent them out, and you check everything between tenants you shouldn't have to do much other than collect your rent each month. Again this goes back to cleanliness, condition, and cost.
Once you have acquired enough in capital gains through your properties, you may want to look at multi-family properties (think 50 units, not 2,3, or 4) that you can reposition in the market...but that's a discussion for a later time.
I'm rambling on here, feel free to message me if you'd like and I'll be more than happy to respond.
Best of luck to you!