Starting with a plan in North Texas

[Steven Chang]

Hi all!

I've been on BiggerPockets too long to have just made an account here :)
I organized my intro so hopefully it's easier to read (FYI: I promise to read all responses within reason).

A bit of background
I graduated from a decent university and worked for a year in software engineering before I decided I really wasn't learning much at my job and wanted to build my own financial independence. My excitement level has reached an all-time high as I prepare to move back to my hometown in Plano and to start a new path in REI. I'm looking forward to learning what there is beyond coding for a paycheck.

My REI education
My first exposure to REI was a talk by Josh and Brandon on real estate investing and BiggerPockets. Naively, I didn't make an account and my learning stopped there. Months later, after having read Rich Dad Poor Dad, I jumped into blog posts and podcasts for information - I've lost count how many I read and listened to. I currently have a plan to re-read the UBG and start 7 years to 7 figure wealth (yes, all the free ones - 'tis the problem of young age), and maybe move on to one or two current books.

My scenario

• I'm starting in my early twenties, so I expect to work overtime due to having less capital.
• I'm hoping to look for a mentor, maybe partnership, on my first deal.
• I quit my job (I might get some adversity for this, but no turning back!), so I expect financing to be harder. But my credit is excellent (>760).

My concern
I'm looking forward to starting, but unfortunately (or fortunately?) I have a lingering voice in the back of my head that goes something like "You just said you have little capital, and financing will be hard. How will you close on any deal this way?". It doesn't help that you won't come across houses in Dallas for under 100 grand. I'm considering options, but they're a bit bleak.

• Family - my family doesn't exactly have the disposable income to be dropping grands on any endeavors.
• Co-workers - they're all out of state (and some out of country); this may not be a good idea just starting off.
• Other investors - no track record, but possible in a partnership.
• Big banks - no job, no loan?
• Portfolio lenders - this is the best I can come up with. Hopefully they'll overlook employment for a good deal? I still don't have a track record, though.

My plan
I'm interested in buy and hold on SFH or multifamily homes. My market of interest is north Dallas or north Texas, within ~1.5 hours drive from Plano. I think most of this will be decided based on how much capital I can scrounge up (SFH and rural areas are cheaper).

I'm looking for properties that cashflow at least X after property management (where X is a positive number I haven't decided on yet). I'm open to partnerships, but would also like un-partnering agreements in the long term. I think this will make it easier on both parties.

If anyone has comments or can help me narrow down my plan further, please do!

My next steps (and more questions!)

• Read (at most two) more books? The podcasts on Quick Tips and Deadly Mistakes mention it's bad to not be educated, but it's also bad to have analysis paralysis. Oddly, there's no mention of the gray zone where people decide when they're educated enough. To avoid this, I'm limiting myself to two books before taking action. I have one or two in mind, but any suggestions?
• Join REIA(s) and meetups. It seems there are a number of REIAs in Texas associated with Dallas. Do people have any preferences or recommendations?
• Find a deal. I see three paths: do my own mini-wholesaling effort, ask a wholesaler, or become a licensed agent and access the MLS. In Texas, I'd need to be under a broker to operate as an agent, so the last option is less appealing to me.
• Find a mentor. I heard recommendations that people are less likely to mentor if you have nothing to bring to the table, so I put finding a mentor after finding a deal.
• Keep chugging along! I have general ideas with regards to deal analysis, due diligence, purchase, (maybe) rehab, and finding tenants. But from experience planning this far in the future is hazy anyways.