Newbie from Baytown, TX

[John Bell]

Hi BP community, my name is John Bell. I live just east of Baytown, TX and I'm fairly new to real estate investing. I've thought about REI in the past but was on the fence until I read David Greene's book " Buy, Rehab, Rent, Refinance, Repeat". The idea of making your money work hard for you instead of the other way around peaked my interest. Now I'm reading as much as I can as fast as I can and working my way through the pod cast and webinars.

I've worked as certified marine chemist for 11 years now and I own a couple of small pet related  businesses. One is a mobile grooming service that runs two vans with my wife as a pet groomer in one and an employee in the other. The second business is a small pet supply store that I opened last March. I did the rehab on the store myself (took 6 months) so I have some experience with plumbing, flooring, electrical, framing, and taping & floating. I also rehabbed our old office which needed walls, hot water heater, shower, and flooring. 

At the moment I'm a bit cash poor but I have decided to move my SEP IRA ($163k invested in stocks) to a checkbook self directed IRA at Broad Financial. The problem I'm running into so far is that the non-recourse loans will at most give a 60% LTV. So I'm not positive that the BRRRR method will be effective enough under a SDIRA. I'm hoping the differed taxes will make up for the low LTV.

My short term goals are to learn as much as possible, evaluate 2-5 homes a day, and meet some local talent. Within the next year I wanna buy at least one single family home in either the barber's hill school district area (expensive area making a great deal hard to find) or in Baytown in the 77521 zip code near the new mall development. (Zillow claims values in this area have gone up 3.5% in the last 12 months and 7.1% is expected next year). I'm hoping to find something in the $60k  to $100k range with some rehab needed. 

My only experience with owning real estate (besides the two homes I've bought to live in) is my Mom's house. She defaulted on her loan and was gonna be kicked out with my younger brother and sister so I paid the remainder of her loan, put the house in my name, and charged her the same rent she was use to. Unfortunately she only made 5 payments and I carried the expenses (taxes) for 5 years. I finally got a cash offer that allowed me to break even and the rest I gave to her to find another property.  What do you do kick out your own mom? So lesson one don't rent to family. I'm open to thoughts and ideas. I'm very excited to open a new chapter in my life. 

John Bell

[Brenda Logan]

Hi and Welcome!  We're in Baytown so we're neighbors.  I don't profess to know even 1/4 of what a lot of the people on here know but I have got my feet wet and can maybe help with the simpler questions.  We have 4 long term rentals (single family), 2 in Baytown, 2 in Pasadena.  We also have a condo in Galveston for short term that we Airbnb.  We've only been doing the Airbnb since June so that's just a whole nuther ballgame that we're still learning. 

Prices have gone up. It used to be $135k was the sweet spot and you could find those all day on MLS. Now it's about $147-150 for the same or less of a house. I'm still talking MLS as we look for houses that don't need too much work in good neighborhoods. However, we did totally rehab the condo top to bottom with sub contractors. Jury is still out on the condo/Airbnb thing.

I know next to nothing about Self directed IRA's so my question may be a dumb one. Could you take out just enough for the down payment and re-hab and get a conventional loan for the rest?

Anyway, just wishing you luck and success in your new venture.