Newbie from Bellingham, WA

[Fallon Richardson]

Hey BP members!

     My name is Fallon and I'm 27. I moved here from Terryville, CT and have been managing an organic farm for the past two years out in Deming. Some big life events have caused to me to reorient my pursuits.

     I came to bigger pockets after finding the podcast while researching alternatives to savings accounts or CD's for my inheritance from my mother. She passed away earlier this year and my brother and I were left with her home, retirement accounts, and a little cash. The majority of the inheritance will be available upon the closure of the estate and I want to learn as much as I can before then so I don't waste it. I am the executrix of her estate so I'm also trying to find out if selling the property within probate, outside of probate or keeping it as a rental would be the best option for my brother and I.

      I've only been listening to the BP podcast for a month or so now but I have read many of the books their guests recommend. For example, 'Rich Dad, Poor Dad', Brandon Turner's Guide to Rental Property Investing, and Investing with Low and No Money Down. I just started The Book on Tax Strategies for the Savvy Real Estate Investor. I am hungry for knowledge. I also started Hal Elrod's Miracle Morning two days ago to begin to keep me focused. The past six months have been completely unpredictable. I feel confident now though that I am ready to begin this new chapter of my life.

My real estate investing goals for the next three months (or until the estate closes) I will be reading, listening, and taking in as much knowledge as I can. I am going to a local REI meetup and look forward to networking there and on the forum as well. I am anticipating the closure of the estate to take place around the same time I will have enough education to confidently make my first purchase. I'm currently leaning towards house hacking a multi-family and financing it with a low down payment using an FHA loan. I'd like to buy 3 properties in my first year following the closure of the estate. But I've heard its better to set your goals 10x, so I'm shooting for 30!

The why behind all this? I want financial independence and the ability to be with the people I love the most and pursue the things that invigorate and excite me. My income made it difficult to take vacations more than once a year to be with my family who still live back in CT. I want to be able to help my friends and family when they need it. My brother and I could be the one's caring for my grandmother as she ages and I want to make sure I'm in a strong financial position so that I can. She still lives in CT for now so I want a lifestyle that gives me the freedom to visit her more than once a year!

If you made it to the end of this long introduction, thank you for taking the time to read it and I look forward to meeting you and learning from you on the forums!

Happy Holidays!

Fallon Richardson

[Patrick Britton]

@Fallon Richardson that was an excellent introduction. And like Dave, sorry to hear about your loss. Couple of things: first, I see you will be at the REI meetup in Bellingham next Thursday. Thanks for joining! It will be a pleasure to meet you face to face.

Ok, now for the medicine :)  

Buying real estate is a lot like falling in love.  You cannot predict when it will happen.  I caution anyone to forcibly purchase something simply to adhere to a static plan.  That you want 3 by the end of the year is admirable.  But you might find yourself the owner of 3 luke-warm deals, instead of 1 or 2 really good ones.   You can make costly errors by forcing yourself into a deal, as opposed to letting the good deal find you, especially here in Whatcom County with so few truly good deals. Some real estate agents might try to convince you there are a lot of great house hacking opportunities here, but no, there aren't.

I have to take issue with the whole 10x thing I am afraid, LOL.  That mindset was promoted by a known scientologist and while catchy and exciting, it creates a very dangerous, high risk mindset that's rarely, if ever, executed longer than a few days.  I don't like it because of the idea, but rather its effect.  It causes burnout.   Sure, you should not approach something haphazardly or with half the conviction or interest, but 10x?  Let me put it another way, if 10x is better than 1x, why not do 100x? or 1000x?  

One thing I must address, which is fantastic, is your "WHY."  So few investors have a clearly defined reason for investing and your reason is highly motivational and light years beyond the conventional need for material things.  It is very admirable.  

In terms of goal setting, instead of saying you'll buy 3 properties by the end of the year, you might want to consider a goal that reads something like this:

My goal is my promise to myself is to purchase any property in X (location) that meets the following criteria: 

A.)  3 - 4 units

B.)  total gross monthly rent/unit over $950

C.)  total purchase price under $350,000

D.)  including 5% vacancy, 5% cap-ex, etc., my net return per door after mortgage payment must be greater than $200

F.)  estimated deferred maintenance no more than $25,000 as quantified by the average of 3 bids from GCs

This way, you will avoid making the mistake of "cooking" the numbers just to buy something.  This will also allow you to buy logically instead of emotionally, which can make all the difference in the world.  And best of all, you should be able to eliminate those "oh crap, what have i done moments."  They suck...