New REI seeking guidance from the wise and experienced

[Sheldon Vic]

Hello everyone!

I am 31 years old, currently in grad school with a family of 4 (including myself), and currently rent. I have 1 more year until i'm on my way to start my "so-called" career in what I truly do have a passion for (Sports medicine). In my free time, I dabble in trading stocks and do my best at educating myself on my new found desire of REI (via audiobooks, and blogs, etc).

Growing up, I was always foolish in terms of financial management, so I am fortunate to find out about BP! I am continuing to learn as much as I can, but I am hoping to get a little more direction from this post (as the amount of information I find is almost to a point of overload). 

Anyways, I am in the process of selling my grandparents home; and will split the profits with my uncle, which should leave me with roughly $130k (completely grateful for this) that I am looking to invest with (and would complete love to get out of this renting situation, and into our first home with!).

Currently I live in Hawaii, but once I graduate we are looking to move back to either CA or OR; depending on where our careers take us.

I would like to build some passive cash-flow and am open to out of state investing (lower cost, quicker gains/retuns?). I am looking for the ability to be able to spend more time with my family, build long-term wealth, and have a nice nest-egg for retirement. My wife and I are both veterans, so are entitled to VA home loans.

I've been learning about buy-and-hold rental properties (SFH, duplex, triplex, 4-plex, etc); fix-and-flips don't seem too appealing as I would have to be active within the process (which would be difficult with a w2 job); live-and-flips are another option that I would consider, but would the area we end up living (CA/OR), make it worth it (or could we find a decent place)? I've also been doing research on properties and came across Roofstock, which seems to be pretty convenient. My biggest fear is coming in with a loaded shotgun, knowing barely the surface of what I need to know, so I appreciate any and all input. I am looking to learn as much as I can before jumping off into the deep end. Thank you all, and I look forward to getting schooled! :)

[Michael Ealy]

Originally posted by @Sheldon Vic:

Hello everyone!

I am 31 years old, currently in grad school with a family of 4 (including myself), and currently rent. I have 1 more year until i'm on my way to start my "so-called" career in what I truly do have a passion for (Sports medicine). In my free time, I dabble in trading stocks and do my best at educating myself on my new found desire of REI (via audiobooks, and blogs, etc).

Growing up, I was always foolish in terms of financial management, so I am fortunate to find out about BP! I am continuing to learn as much as I can, but I am hoping to get a little more direction from this post (as the amount of information I find is almost to a point of overload). 

Anyways, I am in the process of selling my grandparents home; and will split the profits with my uncle, which should leave me with roughly $130k (completely grateful for this) that I am looking to invest with (and would complete love to get out of this renting situation, and into our first home with!).

Currently I live in Hawaii, but once I graduate we are looking to move back to either CA or OR; depending on where our careers take us.

I would like to build some passive cash-flow and am open to out of state investing (lower cost, quicker gains/retuns?). I am looking for the ability to be able to spend more time with my family, build long-term wealth, and have a nice nest-egg for retirement. My wife and I are both veterans, so are entitled to VA home loans.

I've been learning about buy-and-hold rental properties (SFH, duplex, triplex, 4-plex, etc); fix-and-flips don't seem too appealing as I would have to be active within the process (which would be difficult with a w2 job); live-and-flips are another option that I would consider, but would the area we end up living (CA/OR), make it worth it (or could we find a decent place)? I've also been doing research on properties and came across Roofstock, which seems to be pretty convenient. My biggest fear is coming in with a loaded shotgun, knowing barely the surface of what I need to know, so I appreciate any and all input. I am looking to learn as much as I can before jumping off into the deep end. Thank you all, and I look forward to getting schooled! :)

 Sheldon,

I commend you for admitting that having money does not make you an investor. In fact, sometimes, it's a dangerous thing to have money but no knowledge and then you jump in and lose it all. That happened to me in the past and I learned it the hard way. Here's Part 1 of my story:

https://www.biggerpockets.com/forums/55/topics/690349-from-bankruptcy-to-1-000-units-part-1-thru-the-dark-tunnel

Now after reading that story, don't feel bad for me. I have acquired over 1,000 apartment units since then, so I am doing fine.

OK to answer your question. You have several choices. It depends on your interest and the level of involvement you want to have and the time it will take you to learn.

1. If you want to get your hands "dirty" and you like improving things, then go into flipping. BUT, my advice is to learn first from a successful flipper in the city you're going to move into. Also, ensure that the flipper will still have skin in the game. You can invest, say 75% of the cash needed by a flipper to get a project going. He/she invests the other 25% - he/she manages the flipping process, while you learn from the flipper. Once the property sells, you guys split the profit 75% to the flipper and 25% to you. You basically paid the flipper for the expertise and you learn in the real world.

2. If you don't have time to be actively involved, then consider investing in a syndicated apartment deal. It's more passive and in a way, less risky, assuming of course the syndicator is credible. You get a pro-rated share of the cashflow and capital gains with no tenants/toilets/turnovers. You can also start sooner because you can invest in a syndicated deal and the property does not have to be in your city. It's less risky because you leverage on the experience and expertise of the syndicator.

3. Now, if you're very organized/detailed person and you want to be a landlord yourself, you can invest that money in a single family rental. You can focus on properties that need repairs so you can buy them at a discount and add value by doing renovations, and most likely, you will have positive cashflow. You can research BRRR technique here on BP (Buy-Renovate-Rent-Refinance).

Makes sense?