Hi! New member in Houston, TX, but investing in San Mateo, CA area

[Michael Delpier]

Hi, my name is Michael and I'm new here. :)

A little background.

I am what I call an accidental investor. Basically, I bought a condo in San Mateo but I had to move out of the area for work during the housing crash. I could not sell the place, so I rented it. I moved back into the area and I did the same thing a few years later. So now I have two rental condos. But, I am ashamed to say, even though I have owned these rentals since 2002, I don't know much about investing. 

I do know how to referb houses and search the Internet. But that is the extent of my talents this far.

Recently I have come to the realization that I love real estate. I am not looking to make millions. And I know it is hard work. But, I find a lot of joy in being able to provide places for people to live.

So, I am starting on the education journey into real estate investing. The goal is to buy, rehab, and rent single family, multi-family, or condos in the San Mateo area. Of course I would love to quit my job, move back to California, and work real estateivesting full time. But that seems so far off.

Any help on where to look and what to read would be great! Hope to learn a lot from everyone here.

[Michael Delpier]

Not sure if there is a better place on BP to write your personal diary about your journey to becoming a REI. But I will use this area and happily invite all others to comment. But if no one reads it, that is okay too.

Long post, but follow on posts should be shorter.

History:

I am back on the journey of REI after taking several years of off. Kiyosaki's book inspired me to buy my first condo in 2002. At the time I was going to school to reinvent my career, so I had no money, but knew I had to do something. I was renting a house where I sublet the rooms so I could live rent free. This was not the plan, but the necessity. I graduated in 2001, became an Industrial Designer, earned a small income, and bought a condo.

In 2005 I picked up an moved around the world to Hong Kong to step up my career. Due to market conditions, I was unsuccessful at selling my condo and therefore was still paying a mortgage and HOA. My wife also quit her job to be with me in HK. (yep, I am lucky and she is very supportive). I was cash poor and upside down in the condo. I could not even afford a bed. I did not get much sleep because I was sleeping on bubble wrap and every time I moved it popped. Despite the increase in pay, the condo and move was sucking all my money. This situation still scares me a little.

We moved back to San Mateo in 2006. The market was at the top but I did not know it. The renter in my first condo had just signed a year lease so I had no place to stay. I bought a "deal" on another condo. It needed a complete rehab. I did all the work myself except the tile in the bathroom and the asbestos removal. The rehab work, and learning the HOA requirements, was a great experience. We love this place. Rehab actually became a selling point with some of the local realtors as to what could be. They would show our to sell another listing.

We moved to Houston in 2008 to move up the job ladder again (wife amazingly still with me!). We bought a house that looked like a deal but was actually a money pit. It had lipstick in all the right places. There was 30 years of differed maintenance. The inspector my agent hired said the house was all good. Um, not so much. All the lipstick was applied by low quality (cheap) contractors. The first clue was when I plugged in a light and the sparks flew out of the socket (positive and neutral were wired wrong on every outlet in the house). I sure learned a lot of lessons on this purchase.

Current:

Back on the REI tract. I am finding that, I have more money to invest than before, but I am in a serious time debt situation. Demanding job that requires international travel, 2 young children (1yo and 3yo), a house I am still fixing, and I am building a plane in my garage. So I need to dig myself out of this time debt in order to make room for REI in my life.

Why am I here? Why REI?

My focus had been climbing the job ladder, but after taking note of the lives of several high level managers in the corporate job, I realized working your butt off to move up the ladder is an empty pursuit. This was crystallized when a VP retired after 30 years, and the going away party consisted of beers at a local ice house. I can't leave my corporate success to my kids. If I quit, I have no income. I wont even get a gold watch. The 401K would provide a miserable retirement and medicare may not be there for me. Wake up call acknowledged!!! I need a new path.

I needed to "find myself". This does not mean shedding all my responsibilities to sit on a mountain somewhere. I have kids and a wife depending on me. It did mean several sleepless nights. (still continuing)

I realized I really work for my kids. I am a designer and still love it. I also like to help people and make the world a better place. This is what drives me. I realized my tenants have given me joy because I have been able to provide a solution to their situation. I like hands on rehabbing because the transformation gives me a feeling of accomplishment. I have made something better. I love real estate. Not because it will make me rich. That is not my intention. I like the feeling it gives me when I make something better and provide solutions that help people. I found BP by following a worm hole during a google search. This is my type of place. No BS. Just help and support.

What has kept me out so long?

I am not in any disillusion that REI is easy. It is very hard. I now this, and this is why I have not entered before. My mom was an book keeper for a PM. I have a good friend who owns a PM company in the SF area. I grew up helping my dad fix duplexes we managed in exchange for reduced rent. My wife's father was a tile man most of his life. My brother in law owns a commercial electrician business. I have heard first hand accounts of horror stories. I know every aspect of REI is hard and has a good amount of risk. Honestly, this scares me a little. But it also means I have a lot of people I can learn from. I am just sorry I just did not realize it until now.

Where do I go from here?

Although I have been a landlord for over a decade, I embarrassingly don't know much. So education is priority number one. I'm working on that every day now now. I am putting together a syllabus to follow. (I would love is there was one readily available)

Brandon has the 7 steps. I will follow those, but it seems this is an outline that needs to be tailored to each individual.

Education

As a designer, I am naturally detail oriented. BUT... not organised as I should be. I really need to learn to run a business. I have no idea how to put a business plan together or do a SWAT analysis. So that will be some of the focus of my education.

I also need to learn about the particulars of my niche and strategy. There is a lot of learning to do. Of course I would love to find a mentor, but I am a strong believer in a win/win and I don't feel I have much for them to win at the moment. 

Niche and Strategy

I also need to figure out my niche. I don't have a lot of money or time. This is not exactly conducive to moving into real estate. But I love making things better. I like rehabbing but it can be very frustrating also. I would not want to flip for a living. I actually like condos and apartments better then SFH's but not sure on the financial aspects of each. More education needed!

So my target niche at the moment is under performing condos or small multi's and make it look and perform better. My ideal target area is the SF area peninsula, but Houston also has some potential for me. If in the SF peninsula, I have the connections for agents, rehab, property management, and sales.That is a positive. I just need to find the deal and funding. In the Houston area, I would need to find an entire team, but the positives are that I live here and REI has a lower barrier to entry than the SF area.

Just need to figure out how to find the funding and the deals that work. This is turning out to be very difficult. Buying a house is easy. Investing is hard.

The (3) plan, (4) finding property, (5) paying for it, (6) marketing it, and (7) getting paid of Brandon's 7 step method are still unknowns at this time. I have a long way to go.

Goal

I would consider myself very successful if I had a few properties that fund my freedom and retirement. Something that can be left to my kids when I am gone. And hopefully I can teach them the value of REI so they don't sell off the property for the quick cash.

A dream well beyond my foreseeable grasp, is to find several apartment complexes within the same block and rehab them into a single park like setting complex in a class A or B area. A hidden secret where people feel excited to live there.

That is my story. More to come!