Starting out in Chapel Hill, NC

[Weston Tracey]

Hi All,

Finally ready to take action! A bit about me:

-Moved to NC and bought a primary residence in January. (Wife and kids, no house hacking for me!)

-I've been wanting to get started for years since taking an RE class in college, and have been reading and researching off and on since.

-After budgeting expenses/extras/emergency fund/401k/HSA/etc I will have $45-55K/year from my W-2 job to devote to RE.

-My motivation is financial freedom, and to open up my options in middle age (currently 25) but also for security for my family of 5.

I'm interested in buy and hold, likely via BRRRR. I'm waiting to define my specific criteria until I get to know this area a bit better, but I will definitely be using a PM.

I'll be spending the next couple months getting to know the area and hopefully going to some REI meet ups and making some contacts. I'm still defining my goals, although a lofty somewhat arbitrary longer term goal is $1M in equity 10 years from now.

In the short term since I only have 10k today, and 50k by year end, I'm torn between:

1) doing a traditional mortgage purchase this year because I'm so ready to take action.

2) waiting and BRRRRing when I have sufficient cash

3) BRRRRing with the help of hard money by year end (I'll investigate private money first)

I'd love any advice I can get, including areas to investigate in the Chapel Hill / Raleigh / Durham region, and what kind of numbers others are seeing in the region!

[Jeff Cichocki]

@Weston Tracey,

Congratulations for only being 25 and thinking ahead this way. It's really impressive.

I know I'm tainted in favor of option 3, but it's not just because I'm a lender. My business partner and I are active investors as well. Option 3 has the most flexibility and opportunity in it.

Using a HML or PML to acquire good properties that need renovation is a great way to leverage your resources. Using leverage (properly) will accelerate your goals and create opportunities you won't be able to pull off on your own easily. I help a lot of borrowers with this exact strategy. It works great.

Here's a couple of pointers/thoughts on finding a good lender to work with...

1. Find someone who wants you to succeed. All lenders want you to succeed, but what do they do to help you succeed. This is a hard one to test, but referrals are big indicator. Having a low foreclosure rate is a big indicator.

2. Find someone who thinks of themselves as your financial partner and not just a lender. If they act like a partner, they will be a great resource, guide and mentor to have on your team.

3. Find someone who is active in the market (doesn't have to be your market). A lender who understands the day to day struggles of investing can be an invaluable member of your team. They will have a perspective that few others will.

4. Find someone who will be there to help in the event anything goes sideways. Remember, they are your financial partner. Even though they don't own the property, treat them as if they did. You'll understand why when your first property goes a little off kilter and they help you fix the problem.

5. Find someone that is going to be fair & reasonable with you. Some lenders have very high fixed costs. Most of it's junk fees. Yes they need to make a profit. But, if the fees get too high, it's more likely you'll lose the property if anything goes sideways. You want to work with someone who wants to work with you long term. High fees are a good indicator of short sighted thinking; they are not long term relationship driven.

Good luck. I hope this helps you get started sooner than later.