Newbie in Houston Texas

[Cullen Hairrell]

Howdy BP nation! I am a new BP member with plans to use 2019 as a springboard into a real estate investing. My wife and I both graduated from Texas A&M University in 2016 and moved to Houston after taking a 6 week backpacking trip across Europe. 

Professionally, I have a mechanical engineering degree and work in the commercial HVAC construction industry in Houston. Throughout high school and college I worked on commercial construction projects, which has made me comfortable in the contracting world. 

I grew up in a small town outside of College Station, which taught me how to fix most things I get my hands on. No one in my family has ever invested in real estate, but it's been something that has piqued my interest since college and I have searched Zillow and HAR daily for the past 2 years to try to learn the Houston market. Only recently has my wife introduced me to the BP podcast, which has been the catalyst to turn an interest in real estate into actual plans to make something happen. 

The ultimate goal is to build passive income through rental properties to open up the ability to travel. Our goal for our first property is to find a multi-family property to house hack and live-in-flip in Houston.

[Robert Haney]

Cullen,

I assume you have little cash with which to work.  That means outside financing your properties.  It will likely be slow going for years, but if you stick with it (slow and steady) you should do well.

Rentals are a good way to go, but will be much slower that flipping some properties to build your cash.  If you make X amount per year on a rental you should make 3X or 4X in 4 to 5 months on a flip.

I have rentals and I do flips.  I do everything in cash.  I just sold ($160k sale with 5 months closing to closing) a house that I initially was going to rent.  I would have made $1000 per month renting which is $12k per year.  The flip will make $40k net.  That's 3.3 times the annual rent profit.  Flipping the one property in 5 months equaled owning over 3 rentals for 12 months.

Again, renting is a good slow way to go.  Even flipping will be slow if you are starting with little.  The key is STEADILY WORKING it, AND KNOWING WHAT YOU ARE DOING.

My old day job had a bumper sticker they gave away which said "There is no substitute for knowing what you're doing!"