Newbie from Apopka FL

[Russell Holmes]

Hello all, I'm new to BP and have been browsing for a few days. I live in Apopka FL, about 30 mins from Orlando. I started a mobile auto detailing business in 2007 which has grown quite well in the last decade. I don't own an investment property yet, but bought my house at a perfect time and position. I bought a brand new 4/2 1910sqft block home for $180,000 on 2009. One year before, the builder was getting $240+ for the same house. After I bought values dropped slightly through '11 but have climbed steadily since. Houses in my neighborhood are now selling in less than a month for $220-270k. I had a growing family and rent prices hadn't decreased with the housing market. I got the $8k first time home buyers credit and 3.5% builder contribution to closing. So I basically qualified for the loan, and moved into a $180k house with a mortgage principle of $175k and zero down. I'd like to say I was some genius who waited for the perfect moment, but it all just sort of happened, my business was growing as the housing market crashed. Fast forward a few years to 2012-2014 and my wife at the time and mother to my two kids decided to sneak around, cheat, and have a baby with another man, then claiming it was mine before using this poor kid as extortion to try to get a windfall settlement and child support. Through the divorce I fought tooth and nail to hold on to what I worked for. Luckily I made it through with my house, my business, and 50% custody of my kids. I've got some debt to pay back due to that mess, but it's manageable and shrinking. A few months after she left, I met my now fiancé, a mother of three who had transplanted from NC to Florida to start over. She had been working hard and had built up a good life for her and her kids. When we met, she had been planning to start a cleaning business while I was planning to expand to a second truck in my mobile detailing business. Again, the pieces just fit together perfectly and she started our second truck as a partner, effectively doubling the business. Between the two of us, we bring in 6 figures in gross revenue with very very little overhead and very little stress (although being in Florida, a LOT of sweat and hard work). As far as service businesses go, it has been an amazing ride. Very little overhead aside from our trucks which also double as personal vehicles. The business continues to grow as we have built a great reputation with customers. We make a great income, but it is tied directly to hours worked. Our hourly income is so high that I could never even consider working for anyone else (since I dropped out of college and lack the engineering/accounting/medical degree I'd need to make more from a job). When I started the business, I had imagined I could grow to several trucks run by lower paid guys, sit back, and enjoy a passive income. I was also 21 years old at the time...so that's my excuse for naivete. haha. In reality, we end up with gate codes, garage codes, and free access to keys to Lamborghinis, Ferraris, Porsches, etc and have many credit card numbers on file to bill once complete. Despite carrying insurance, I'm not about to hand off that kind of liability to low paid employees so I can profit more. We are sort of at a sweet spot in the business. we have some room to continue growing, and all customers are handled personally by myself and my fiance. We have tossed around the idea of getting a third truck and hiring a detailer. We could easily find someone to be as trustworthy and accountable as us, but it would come at a price of paying them a high wage, leaving not much left for profit for all of the hassle involved with managing another's schedule. Instead of expanding our business adding lots if stress for a little extra profit, we plan instead to just enjoy working a healthy business and transition into real Estate investing. We are tentatively planning to keep working in our business for the next 6-10 years while building a portfolio of properties, eventually selling or just closing our business when we can afford to live and continue to invest extra without the business income. My house that had an extra bedroom when it was just my two boys is now bursting at the seams. We gave my fiance's son the extra bedroom and closed in an unused dining room for her two girls to share. It is still a bit tight, and with houses slightly larger starting at about $300k and going up quickly, we are going to add an extra bedroom and bathroom as well as a bonus room in about a year, after we get married. We will be using a combination of a refi (likely with a bit of cash out to bring us to 80% ltv) and/or second mortgage to fund the addition, but will be doing all the labor possible ourselves. I think we'll only need to pay pros for the planning, concrete pouring, and roofing. Doing the rest ourselves will save a ton and will help us to increase our already sizable equity even further, as the addition will cost less than the added value. The square footage when finished will be in line with the largest homes in our neighborhood, so we won't be making it too big for the location. Thanks to the divorce, I'm not sitting on a war chest of cash. I'm exploring options of getting into investing without cash out of pocket, but also plan to use our equity post-addition as a way to leverage into my first property if I haven't done so yet. I'm most of the way through Brandon Turner's "The Book on Investing in Real Estate with No and Low Money Down". I recently finished "Building Wealth One House At A Time " and have previously read other success books such as "Rich Dad Poor Dad", "The Magic of Thinking Big", and others which titles have escaped my memory. I know a few local friends and customers who buy and flip houses and buy and hold, and will definitely network with them along the way. I feel, for now, that I'm a bit to early to discuss it in depth with them as I would come across as a novice looking for funding and guidance rather than a strategic partnership when I'm more prepared. As appealing as making huge profits on flips seems, I've already got a day to day "hustle" in my detailing business, so the tight schedules and pressure associated with flipping is something I don't care to get into until down the road. Instead, my main interest is in buy and hold investments. I love dealing with customers day to day, and am quite handy around the house. I feel that in the beginning at least, I'll really enjoy managing my own properties and doing much of the repairs myself, while having pros on standby for times I'm either unavailable or not skilled enough for certain repairs. I've kept an eye on what real Estate is doing around me since I bought in 09. My area of Apopka was undervalued when I bought. I had looked at some aged and run down houses a few miles away in Altamonte, where I grew up, and they were all quite a bit more expensive than the new house I bought. now, 7+ years later, my house is worth 20% more than some of those I couldn't afford. There is a new toll beltway being completed through our area, a new 40 acre town center retail/restaurant development nearing groundbreaking, a new huge hospital being built which will draw in many more high incomes, etc. From what I can tell, assuming no recession, values in my area should continue to climb strongly for the next 15 years at least. I don't want to manage super low income tenants, but there are a lot of smaller older 3/2 homes around that have been maintained or renovated within recent history that seem as if they'd make great rental properties. Sale prices are usually in the $100-150k range and rents in the $1250-1400/month range. Sometimes I'll see a foreclosure or other distressed property for $75-80k, although they appear to need major work. With my flexible schedule working for myself, I'm looking forward to diving in deeper, finding deals, managing property, and hopefully finding some investors to work with early on. I'm not looking to get rich quick, but rather build wealth slowly so that I can quit working as hard physically detailing before I wear my body out. I've always had an interest in real estate. I got about halfway through online coursework for a real estate license and learned a lot, but realized I wasn't all that interested in marketing and selling houses for a commission and would rather invest for longer term security. One of my grandfathers retired at 37 and has lived on dividends from personal investments in stock and commissions from being a stock broker. He is incredibly talented and even wrote the first book on the strategies used in the stock market used by colleges for years, "Capital Appreciation in the Stock Market". He just turned 90 and still actively works a few days a week trading. I've just never had a huge interest in the stock market as I've never been able to build up a large fund to buy with. My other grandfather started and sold several businesses before rolling proceeds into commercial real estate in South Florida from the 60's to last year when he sold out to liquidate and enjoy the rest of his life. My mother retired recently from being a founding partner in a successful accounting business. So within my family, there is a lot of experience to tap into. Down the road, I may inherit some money that I could use to invest in real estate, but I've never been one to make plans based on a living relative leaving me money when they die. I'd rather my family live many happy years and spend as much of their money as they desire. If I inherit money, I'd like it to add to an already growing real estate investment portfolio, not be the beginning of it. Also, I really do not wish to approach any family for private real Estate financing as they have been more than generous in the past helping me start my business after dropping out of college and assisting greatly in my divorce, funding the fight to keep my assets. I'm still paying that debt back, and even when it is paid, I don't think they'd take to kindly to me popping up with another idea needing funding! Haha. So I guess that's my short autobiography. I don't necessarily have any specific questions as I'm on more of a "soak up all the knowledge I can" quest, but feel free to provide any guidance or pointers that my novel above may spur. Looking forward to learning more, and I plan to replace my Pandora music with BP podcasts while I work. thanks for reading!