REI in Vancouver, BC

[Raul Velazquez]

Hi powerful BiggerPockets members!

Soon I will receive some capital (as the outcome of my divorce). I want to invest it wisely so that a part of it is used for my living expenses and the remainder invested in RE producing cash flow and appreciating over time. Since I am entering this field in the latter part of my life (63), I do not want 'long-term' investments as I am not interested in making millions, but having enough for the remainder of my life to 'Vive La Vida Loca'! ;-)

I am starting to read books, audiobooks, and this site to build a basic understanding of RE investing in 3-6 months. By then I expect to have a clear plan so I can move into action.
I don't expect to know everything by then, but I hope to develop a basic strategy that prevents me from making the most common and costly mistakes that a newbie can make.

Would you share 3 specific things I should do during my "training period" (if it includes a book, which one)?

Thank you!

[Randall Alan]

Quote from @Raul Velazquez:

Hi powerful BiggerPockets members!

Soon I will receive some capital (as the outcome of my divorce). I want to invest it wisely so that a part of it is used for my living expenses and the remainder invested in RE producing cash flow and appreciating over time. Since I am entering this field in the latter part of my life (63), I do not want 'long-term' investments as I am not interested in making millions, but having enough for the remainder of my life to 'Vive La Vida Loca'! ;-)

I am starting to read books, audiobooks, and this site to build a basic understanding of RE investing in 3-6 months. By then I expect to have a clear plan so I can move into action.
I don't expect to know everything by then, but I hope to develop a basic strategy that prevents me from making the most common and costly mistakes that a newbie can make.

Would you share 3 specific things I should do during my "training period" (if it includes a book, which one)?

Thank you!

 @Raul Velazquez

I would suffix what others wrote by saying that you need to understand that real estate really is a longer term wealth strategy - even though that is what you say you don't want due to your age / starting point.  You will make more money on appreciation when you sell your property than you likely will from the monthly cash flow.  Natural appreciation usually takes holding the property for at least a few years (just depending on what the RE market does going forward).  You can force appreciation by rehabbing and such - so that might be a shorter term way to go?  We saw huge appreciation in the 2018-2022 inflation run up, but that has significantly slowed these days in my opinion.

From a rental perspective your monthly income per unit after all expenses with a typical 20% down payment is likely $100-300 when you find a property that will cash flow. (And I would tell you to not buy a property that doesn't cash flow unless you have significant resources behind you that could absorb anything that could come at you - like replacing a $5,000 AC one month followed by replacing a $1,000 hot water heater the next).    The $100-$300/month amount is just a generalization - but the point is, on a monthly basis you don't see a huge income per property - and you also have to absorb repair expenses and such as well.   

Time overcomes low cash flow to some degree... rents go up while your mortgage stays the same and your tenant pays down your mortgage.  That helps some...but your variable expenses also go up too - property insurance & taxes - so a lot of your rent increases go to offset rising variable expenses.

I started at the age of 47 in 2018 and we bought properties fast and furious - 12 the first year, 10 the next, and 9 in 2021 and currently have 38 properties.  Because of the relationship between lower housing prices back in those years, and how rents have increased since, we have good cash flow on our portfolio.  But the thing to know is it is that is not easy to duplicate in todays market.  Very little cash flows at 7% interest with houses that have doubled in price over the last 5 years.    

Wishing you all the best - but wanting you going in with your eyes wide open!

Randy