Introduction - Seth Alexander

[Seth Alexander]

Hello BP community!

I'm Seth Alexander from Issaquah (Seattle) WA. I've been out here since 2008 after moving from Ohio. I'm currently employed full time at Amazon as a Software Manager. 2020 was a rough year for most people, but I had the misfortune of also going through a divorce around the same time period. This led me to earlier this year, in Jan. 2021 I met with my financial advisor and realized I'm no longer on track for my retirement goals. After that call I decided to find ways to diversify my securities portfolio and create long lasting wealth by way of financial freedom. This, of course, led me to BiggerPockets!

While this is my first post, I've jumped into the podcasts with both feet and have listened to about 60 episodes in the past few months and subscribed to dozens of notable investors on YouTube. I also utilized the excellent BP rental property calculator in order to get an understanding of how to run the numbers. With that, as a person who likes to commit and execute I decided to purchase a few properties. I have always believed in learning as I go, it may not be perfect but a course in reality is the quickest way to grow. 

I closed on a duplex, which will be my primary residence, in Issaquah (don't ask the price... it's crazy out here) on 3/18 and will be closing on an additional 2 duplexes in Ohio on 4/27. The WA property is currently undergoing a heavy rehab, with me and my handyman friend doing most of the work. I think it's important for me to do this work and learn the vocabulary and get a general sense of the cost of materials. It also is a hand-on education of the types of challenges that I might face when working with contractors in the future. 

The Ohio properties are each a 14% COC-ROI. I originally found these pre-MLS through a realtor I've been working with. I passed on first glance because the numbers did not line up (7%) with my goal ROI. However, while looking through their photos I noticed that all 4 units (2 identical duplexes) had finished basements and were one door and a small closet from being considered a 3 bedroom, 1.5 bath unit. This would allow me to command another $300/month on each unit.

Why Ohio you may ask? It's a great question, but the answer is simple; I have a good friend of mine who owns a few properties out there (among other businesses) and he offered to property manage for me for 5%. With that I started to see what the economics were like for the area I was interested in and found that they were on the rise, with significant 10-15% appreciation values in the past 2 years. Plus, I'm somewhat familiar with the area having previously lived there. Regardless, jumping into real estate investing remotely and out of state was an additional challenge. 

Fortunately, I had David Green's excellent book Long-Distance Real Estate Investing (thanks David!) and I'm experienced in managing overseas teams. This has helped me overcome the fear associated to investing out-of-state. 

With that, I'd like to cover some of my goals and see what I can learn from seasoned investors like you all. Let me know if you think these goals are too aggressive. Keep in mind that I intend to continue to work as a Software Manager for the next 3-5 years. I'm good at my job, but it does not stir up the passion in me the way investing does, in real estate or other securities.

Goals:

• Year 1 - Purchase 5 doors (Complete on 4/27)
• Year 2 - Expand to 20 doors (I have some potential unexperienced partners for commercial property)
• Year 3 - Expand to 40 doors and reach a cash flow that can replace my current salary (minus stock)
• Year 4 - Expand to 70 doors and decide if I want to continue my W2 job
• Year 5 - Expand to 100 doors

I think this is entirely possible. Especially as a person that can stretch the power of a Seattle dollar further in Ohio. Some of the challenges I'm facing that I could use some advice on:

• Finding lenders that are not frustrating to work with
• Understanding how to form a partnership for creative financing of commercial property. Should those be structured similar to a loan with interest rates for each contributing partner or given equal stake in the equity and associated cash flow.
• Connecting with local real estate investors to form relationships and immerse myself in the community

I have other more tactical questions that I'll form separate posts about. I think for now this is a sufficient introduction and I'm excited to meet you all!

Seth