New From Central Illinois

[Mike Curry]

Hello BP!

My name is Mike and I am new here. I am a 28 year old from Peoria Illinois.

I got into real estate a few years ago after messing, or should I say guessing, around with stocks. It was not for me, but it did get me researching investing. In my research, I was reading an article in Forbs about self-made millionaires. It had a huge list of self-made men and woman. The list included how they made their first million, and it read like a broken record. Almost all of them started in real estate. I then googled real estate books and was pointed to a book you all seem very familiar with; Rich Dad Poor Dad.

After some reading up on real estate, I ended up buying my current home. It was a foreclosure that was in need of some serious TLC. I almost instantly saw that there was something to this real estate thing. Before doing any work to the house, I had almost $30K in equity. I used that to buy a pretty much turnkey rental.

That was about 2 years ago. I have no idea why, but I pretty much stopped there. I started a new, and very much less satisfying job in January. For whatever reason, this has relit that fire, and I am looking forward to getting back at it.

Anyway, that’s my story. I look forward to getting involved in the BP community!

[Mike H.]

You found the right home then - as in BP.com.

Great place to ask your questions, read up on strategies, listen to some of the best podcasts around, and learn as much as you can handle. Most importantly, it'll help keep you motivated when you're struggling to find deals.

Peoria is actually a decent market for rentals though. Its well out of my range but I would check in on it every so often when I was bored and there was nothing up here by me to even consider. That being said, that was 4 or 5 years ago though. But I did like the taxes down there compared to here. :-)

And I would agree that real estate is the best investment vehicle there is - albeit it does require quite a bit more effort than the rest though. Once you pick a stock, you don't have to do a thing. With real estate, you're responsible for it.  Which is why I believe it offers such a huge return as well - not many people want to deal with it.

But its one of the few remaining ways that us little guys can build some true generational wealth.

Think about it. If you buy a house for 60k and put in 10k in rehab with an ARV of 100k. In 20 years, that house should be worth 200k. It should be paid off. And it should be making you about 1,200/mo in profits per month.

In that example, to buy the house, you'd put down 18k (30% of 60k) and pay the 10k rehab out of pocket. So a one time investment of 28k will turn into 200k in 20 years with income generation of 15k a year?  Not bad.

Now if you're able to do a cash out refi after a year, you can pull that 28k back out and  have little to no money in the deal and that house is still going to look the same. Whats your return on that?

5k investment. 200k asset in 20 years. 15k a year in income.

Thats literally what that looks like. And its not counting the rental income you'll be making over the next 20 years too. All for a one time investment?

Nothing comes remotely close to investing in real estate if you are able to buy it right, use leverage, and account for all the ways real estate makes you money:
1) Equity capture (on purchase
2) Rental income
3) Principal paydown
4) Appreciation
5) Tax benefits

You've found the right place to learn what you'll need. Dig in. And enjoy the ride.