Im a new member.

[Ismael Ayala Jr.]

Hello everyone! I'm a novice SFH investor. I guess you would call me an "accidental landlord" as I was able to take advantage of our interest rate on our first home. My wife and I bought our 2nd home just recently, and rent out our 1st home. I got a taste of real estate and have been learning a little more through YouTube videos, webinars, etc. But now I think I'm ready to take that next step and put things into action. By watching these videos I've recently learned I already made my first mistake by buying the wrong property for our 2nd home, lol. As there were better deals out there. But I guess hindsight is not always 20/20, and I guess that is part of the real-estate territory. But I also learned-reluctantly- I need a mentor, and that's not always cheap. But here we are, when there is a will, there's a way. Thank y'all! I look forward to hearing your stories!

[Noah Bacon]

Hi Ismael,

Don't get FOMO or try and turn back the clock to try and find the perfect deal that you missed out on. I encourage you to look forward and stay hungry for property number 3!

What did you learn from Youtube that makes you feel like you made a mistake by buying the wrong property? 

Also, with you success of obtaining 2 properties at this point by accident, what would you be seeking from a mentor? If you have this extremely valuable experience already under your belt owning 2 properties, why dish out a potential down payment for property number 3 over to a mentor or coach?

I'd love to hear about your second property and what your struggles are finding property number 3. You never know who is watching this discussion and can provide extremely valuable feedback that a mentor or coach may provide for an arm and a leg!  

[Min Zhang]

Hey Ismael! Welcome to BiggerPockets! You're in the right place to learn more about real estate investing. Can't wait to see you grow. Let me know how I can help!

[Ismael Ayala Jr.]

Hello Noah, 

thank you for your vote of confidence! For my 2nd home that my wife and I currently live in, we were able to obtain a 5.5% rate through the builder DR Horton for a new home. So instead of paying the bank for a home equity line of credit on my first home and paying them interest, I was able to use a personal loan to myself via my employer 403b and pay myself back with interest. 

The step where I feel I messed up was, I would have taken that personal 403b loan to myself and not bought a new home. Instead, I would have assumed a mortgage for a fairly new home(5 years or less) at a lower interest rate at 2.75% to 4% and used my loan as the down payment to cover the equity that seller was trying to recoup. 

Last July, August I was just starting to learn about real estate and completely missed the concept of assuming mortgages. I had no idea that was even a thing. Now, I feel I would probably have to wait longer for rent prices to go up for me to get positive cash flow from renting out my current home(2nd home). 

This is where I feel like I messed up as I can't compete with cash buyers, I don't have that kind of capital. Banks want at least 3.5% FHA or 5% conventional which sadly to say I just don't have. I have a good income producing job, however, I have a 6 member household with teens, preteens, and children who are eating up my house like Pacman, lol.

So, I have been looking at creative financing, but still don't have a clue. So needless to say, Im trying to watch a lot of videos and webinars in my free time and put out feelers to see how much a mentor would cost and if it would be worth it. I have $100,000 of equity in our first home, but I am very hesitant to use it due to my novice ability and naiveness in real estate. Especially, with the 10%, 11% rates banks want to charge to lend it.

[Noah Bacon]

Quote from @Ismael Ayala Jr.:

I still have no reason to feel like you messed up! 

A very common phrase that I redundantly use is "It's not about timing the game, it's time in the game" and you are in the game!

In addition to your creative financing education, start to include education around scaling your portfolio using the equity in your home. HELOC, Refi, 1031, etc. Rates are high, and have been high for sometime now, but don't let the interest rate steer you away if the numbers make sense on the next property. There will be more competition when they inevitably come closer to 5%, so acquiring properties with assumably negotiable prices could be a massive hidden gem for you though the APR sounds scary!

Keep up the great work, Ismael!

[Amber Stout]

Welcome to real estate investing, it becomes addicting :) 

You didn't know what you didn't know and that's called learning - all part of the process. I've learned the most in real estate by just DOING and making mistakes and learning from those mistakes. Secondly, getting involved and getting around people actually doing deals that you can bounce situations off of will help tremendously as you're on this journey. There's some great meetups around here to get around those people. If you have interest, send me a PM and I can share some of my fav's with you. 

[Dave Foster]

@Ismael Ayala Jr., The market moves in cycles.  Creative financing opportunities come and go and move with that cycle.  Lots of cash you're competing with (yes in Tampa Bay).  That means creative financing opportunities are fewer.  But that's OK.  Because if you're patient and don't swing at the wrong pitches you'll be in a position to use your creative finance education to pick up properties from motivated sellers.   Even here in Tampa rumblings are sounding.  Days on market lengthening in certain sectors.

You've got a rental and a place for your family to roam.  That's a pretty good start.  Now continue the education.  Reduce your debt.  Add cash to the war chest.  And be ready when the next opportunity presents itself.  Don't force the next opportunity.  You're good!

[Ismael Ayala Jr.]

Quote from @Dave Foster:

@Ismael Ayala Jr., The market moves in cycles.  Creative financing opportunities come and go and move with that cycle.  Lots of cash you're competing with (yes in Tampa Bay).  That means creative financing opportunities are fewer.  But that's OK.  Because if you're patient and don't swing at the wrong pitches you'll be in a position to use your creative finance education to pick up properties from motivated sellers.   Even here in Tampa rumblings are sounding.  Days on market lengthening in certain sectors.

You've got a rental and a place for your family to roam.  That's a pretty good start.  Now continue the education.  Reduce your debt.  Add cash to the war chest.  And be ready when the next opportunity presents itself.  Don't force the next opportunity.  You're good!

I really appreciate the advice, it is very sound and timely. I'm trying to get creative while also minimizing risk, and my eyes are wide eyed to the new information and potential opportunity. But you can say I'm trying to balance the YouTube info/advice from these real estate gurus with Dave Ramsey's advice. I just recently started using this quote, "I'm on Dave Ramsey's modified plan". My LTV is not 0%, like Dave Ramsey would suggest but at 50% on the rental property. But I'm also producing good cash flow, which I plan to first save and build a good 6-8 month emergency mortgage fund for both my rental property and my primary residence. I see you're local, that's awesome. We moved from St. Pete to be able to buy our first home across the bay. Look forward to connecting in the near future!

[Jorge Vazquez]

Welcome, Ismael! It's great to have you here. We've all made our share of mistakes in the beginning—I've been in real estate for over 20 years and learned the hard way by making just about every mistake possible, from buying the wrong properties to underestimating repair costs. Kudos to you for educating yourself through YouTube and webinars; every bit of knowledge helps. If you're looking for a mentor, you're definitely in the right place. This community is full of experienced investors willing to share their insights. Feel free to ask any questions you might have. Looking forward to seeing your