Starting With The End in Mind.

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Starting With The End in Mind.

Adam Scheetz
Elk Grove, CA · Member since 2018 · 29 posts · 8 votes
Greetings All, My name is Adam Scheetz and I'm new to BP. I decided to include my Real Estate plan for public critique. Enjoy and Thank You. Mission Statement: I'm 30 years old and have been Active-Duty Military for the last 11 years. I'll retire from military service at 40 years old. At that time, I'd like to own a business that doesn't need me. A self-sustaining, functional, and community improving entity that allows me to not have a NEED to work. Meaning, I'll no longer be burdened by the need to work a salary job to provide for my family. I want to build long-term, passive income that allows me to provide for my family and those on my team. I love the idea of creating jobs for people and allowing them to earn a living. My goal is to create an enterprise that spans real estate and business able to support and grow my team and better my community. A journey of a thousand miles begins with a single step, I believe Real Estate investing is that step. Short Term (1-3 years) - Goal:  1. Begin to generate $500/month net passive income with Buy & Hold investing. -How to Get There: 1. Invest in Single-Family or Multi-Family (preferred) properties with a minimum of 10-12% ROI w/ no more than 20% Down-Payment and a target income of $150 per door @ 100% financing (used for conservative calculations). 2. Use personal bank loans, mortgage lenders, or private equity investors to finance deals. 3. Consider Flipping as a means to generate capital needed to acquire properties. Look for a minimum of $20,000 profit per flip. Partner with experienced House Flipper and if needed take less % in exchange for more deals and experience. Long Term Goals (10 -12 years) -Goal: 1. Have a sustained monthly passive cash flow of $5,000 through multiple Buy & Hold properties with an average ROI from each property of at least 10% of initial investment. 2. Consolidate investment capital into mostly Multi-Family units and Apartments. 3. Diversify portfolio with investment in Self-Storage facilities. (Ultimate Goal) Goals will change and adjust based on circumstance and perhaps it's wishful thinking, but I'd like to start with the end goal -both short and long term- already in mind and formulate the plan to get there. Let me know what you think or where I might improve by thinking to get to where I want to be.  Much Appreciated, Adam
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Caleb Heimsoth
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
8y
Adam Scheetz I think most of these are doable depending on where you’re buying. If you’re buying in an expensive part of CA this could take millions to accomplish. It would cost much less elsewhere. For multifamily residential (2-4 units) if you’re not owner occupying it you’ll need 25 percent down, maybe even 30. Anything beyond that will also be 25-30 percent down but you’ll have commercial lending terms. (Not 30 year fixed). Hope this helps. Thanks for your service !
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  • DJ Cummins
    Rental Property Investor · Bethalto, IL · Member since 2014 · 319 posts · 103 votes
    8y

    Hello @Adam Scheetz,

    First off, thank you for your service!  I think this is a solid plan.  Your goals are very similar to what mine are.  It has taken me 3 years, but i have achieved step 1 in your plan(6 units, over $500 CF).  It has been a slower go that i had originally hoped, but i can feel the steam picking up now.  I am also interested in a larger apartment building and a self storage facility.  Those are 2 of my goals over the next 5-7 years.  You seem to have a solid plan, now just act on it.  Good luck!

    DJ

    0Reply
  • Adam Scheetz
    OP
    Elk Grove, CA · Member since 2018 · 29 posts · 8 votes
    8y
    DJ Cummins Thanks for the response. Glad to hear cash flowing. I'd love to talk with you about your experience and get some insight. Thanks, Adam
    0Reply
  • DJ Cummins
    Rental Property Investor · Bethalto, IL · Member since 2014 · 319 posts · 103 votes
    8y

    @Adam Scheetz message me anytime 

    0Reply
  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    8y
    Adam Scheetz I think most of these are doable depending on where you’re buying. If you’re buying in an expensive part of CA this could take millions to accomplish. It would cost much less elsewhere. For multifamily residential (2-4 units) if you’re not owner occupying it you’ll need 25 percent down, maybe even 30. Anything beyond that will also be 25-30 percent down but you’ll have commercial lending terms. (Not 30 year fixed). Hope this helps. Thanks for your service !
    1Reply
  • Adam Scheetz
    OP
    Elk Grove, CA · Member since 2018 · 29 posts · 8 votes
    8y
    Caleb Heimsoth Hey Caleb! I'm living in California at the moment but soon to be moving elsewhere. I've got no interest in this market. I'm looking at Jacksonville, FL and Central NC. I may be getting stationed in Jacksonville towards the end of the year and used to live in Raleigh. That's why those locations are on my radar.
    0Reply
  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    8y
    Adam Scheetz what part of Raleigh? I live in Cary and start my masters at State this fall. I love living here but the market is quite high here. You can find affordable areas around here though if you’re willing to go out a couple hours drive from here
    0Reply
  • Adam Scheetz
    OP
    Elk Grove, CA · Member since 2018 · 29 posts · 8 votes
    8y
    Caleb Heimsoth I lived in Wake Forest for 5 years and Raleigh for 2. I have an agent friend in Raleigh who has said the same thing.
    1Reply
  • Michael Wagner
    Specialist · Victor, NY · Member since 2013 · 823 posts · 844 votes
    8y
    Originally posted by @Adam Scheetz:
    Greetings All,

    My name is Adam Scheetz and I'm new to BP. I decided to include my Real Estate plan for public critique. Enjoy and Thank You.

    Mission Statement: I'm 30 years old and have been Active-Duty Military for the last 11 years. I'll retire from military service at 40 years old. At that time, I'd like to own a business that doesn't need me. A self-sustaining, functional, and community improving entity that allows me to not have a NEED to work. Meaning, I'll no longer be burdened by the need to work a salary job to provide for my family. I want to build long-term, passive income that allows me to provide for my family and those on my team. I love the idea of creating jobs for people and allowing them to earn a living. My goal is to create an enterprise that spans real estate and business able to support and grow my team and better my community. A journey of a thousand miles begins with a single step, I believe Real Estate investing is that step.

    Short Term (1-3 years)

    - Goal:  1. Begin to generate $500/month net passive income with Buy & Hold investing.

    -How to Get There: 1. Invest in Single-Family or Multi-Family (preferred) properties with a minimum of 10-12% ROI w/ no more than 20% Down-Payment and a target income of $150 per door @ 100% financing (used for conservative calculations). 2. Use personal bank loans, mortgage lenders, or private equity investors to finance deals. 3. Consider Flipping as a means to generate capital needed to acquire properties. Look for a minimum of $20,000 profit per flip. Partner with experienced House Flipper and if needed take less % in exchange for more deals and experience.

    Long Term Goals (10 -12 years)

    -Goal: 1. Have a sustained monthly passive cash flow of $5,000 through multiple Buy & Hold properties with an average ROI from each property of at least 10% of initial investment. 2. Consolidate investment capital into mostly Multi-Family units and Apartments. 3. Diversify portfolio with investment in Self-Storage facilities. (Ultimate Goal)

    Goals will change and adjust based on circumstance and perhaps it's wishful thinking, but I'd like to start with the end goal -both short and long term- already in mind and formulate the plan to get there. Let me know what you think or where I might improve by thinking to get to where I want to be. 

    Much Appreciated, Adam

     Adam,

    You've done well to outline a very good plan here...and I don't just say that because its the exact one I started with:)  You are wiser than most in that you've developed a solid plan rather than just jumping in. Beyond that, and the most impressive part is that you have defined your "why".  I find that most folks who put an action plan together, neglect to dig deep enough to discover and articulate their why which is probably the most important component of all this planning.  With that, I say well done to you!

    I hope you don't find my question intrusive but I am wondering why you have decided to start with some buy and hold rentals if what you really want is to invest in larger multi-family or self storage facilities?  Why not go straight for what you really want?  And please know I am not being critical.  I started in in 2-4 family back in 2007 before making the shift to self storage in 2011 and while I learned a good deal in the multi-family if I could do it all over again I would definitely skip that phase:)

    Just something to keep your wheels spinning.  Feel free to reach out anytime.

    Mike

    0Reply
  • Adam Scheetz
    OP
    Elk Grove, CA · Member since 2018 · 29 posts · 8 votes
    8y
    Michael Wagner Thanks for your encouragement. I've started this whole process from self-storage research and it seems to me that in order to get into a good deal, with a good CAP rate, in a good long-term area in SS I need some decent capital and experience with the whole commercial real estate side. Though I want to end there and would love to start there with no toilets, tenants, or trash, I didn't see a viable path without cutting my teeth on smaller ventures. My overly simplistic formula is as follows. Flip house make capital. Take capital and invest in MF. Use Net income from MF to finance Self-Storage venture. Retire happy!
    0Reply
  • Lane Kawaoka
    Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
    8y
    Adam Scheetz all roads point to mfh as being superior to sfh but dude start with sfh first to get the hang of it.
    1Reply
  • Adam Scheetz
    OP
    Elk Grove, CA · Member since 2018 · 29 posts · 8 votes
    8y
    That's what I was thinking too. I feel like the liability and complexity is lower with SF. Best to not just jump in the deep end while learning to swim.
    1Reply
  • Paul MoorePro Member
    Commercial Real Estate Fund Manager · Lynchburg, VA · Member since 2015 · 1k+ posts · 1k+ votes
    8y

    Hi Adam,

    Thanks for serving our country.  Great goals.  I recommend going through the One Thing book (and program) by Gary Keller.   I have personally done about everything on your list (SFRs, MF, Storage and more), and I would be happy to talk with you.  I've written several BP articles on these topics as well. Hopefully you can learn from my mistakes! 

    Connect with me on BP and we can set up a time if you wish.  

    Podcast Guest on Show #533
    0Reply
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