Salt Lake City Market

[Charlie Lee]

Hello Bigger Pockets Community! I'm Charlie Lee from Salt Lake City, Utah. I am graduate student with a bachelor degree for New Media. My goal is financial freedom through real estate. I have very little background in the real estate business, but am highly eager and determined to get my feet wet and begin building my portfolio! Like many of us, the book Rich Dad Poor Dad changed my mindset and how I want to approach my career. I came across Bigger Pockets and from them have been educating myself diligently. I've been a lurker for a while but it's time to up the ante and rev the engines.

I'm motivated towards financial freedom for the stability and flexibility it offers. Every day I read more articles about the doom and gloom of the economy, the housing market, the retirement woes of the elderly, the middle class disappearing, etc. I understand that by starting now and planting seeds along the way, I will be able to reap the fruits in the near future with hard work and consistency.

Like I have briefly mentioned I obtain to reach financial freedom by using real estate investing. I’ve been lurking on Bigger Pockets for a while, and have been doing my own research as well. I’ve sat down and come up with this plan with our longer term view and our short term attack plan. I would welcome any advice. Is there anything I may have missed? Should it be shorter and more aggressive, or a longer timeline, or is the approach wrong, etc. I’ve also added some questions in bold.

I think Bigger Pockets is an amazing community and it’s been teaching me so much! I need to be more active on it.

Thank you so much for any and all feedback!

Goal- Earn at least $5,000 a month in passive income.

Strategy- buy and hold rental properties. Mostly single family fixer OR multi-family fixer. Wholesaling after gaining experience to help finance more properties.

Timeline- Reach 5,000 a month in passive income ten years from when we buy our first property.

Market- Middle- income small single families/ multi-familiy. We are also okay with low-income properties depending on the property, but still only properties and areas that we would want to live in.

Criteria- $100 per door minimum cash flow.

$220,000 max purchase price for single family property. I want to tap into off-market properties, possibly MLS if the numbers work.

Maximum rehab budget- $35,000-$40,000. Once we have more cash reserves, BRRRR strategy, so maximum rehab budget will be raised at later point.

Cash on cash ROI- 8% minimum

Marketing Plan- I'll use the MLS, but do not expect to get many if any deals from it. We will network through Bigger Pockets and investor meetups, and build connections with agents. We will use direct mail to find off market deals.

Financing- Owner occupied conventional 5% loans or 3.5% FHA. I do not qualify for Home Possible with our income.

In order to reach $5,000 a month in passive income in at least 100/door, then I need 50 doors. In order to reach this in 10 years from my first property then I need to acquire at least five doors a year. The first three or so years will be using house hacking, which can only be done a year at a time and the max is four doors, so we will be behind after the first three years. After three years of fourplexes there are still 38 doors needed to reach the goal in the remaining seven years, which equals to 5.42 doors a year. We’ll set the goal at year three to six doors a year to allow some margin of room if we buy a duplex or triplex in the first couple years.

Plan:

• -Buy first house hack by August 2021. By doing so we can save a better cushion and hopefully take advantage of any market softening.( When the market is down) estimate around 2-3 yrs from now.
  • Goals to meet objective
    • May-
      • -practice analyzing deals
        • -Call local property management companies for market Rents?
          • This would probably affect our analysis..
        • -choose real estate agent.
        • -choose lender.
        • -Get estimate on how much I can qualify for.
          • + Should I get a preapproval this soon? I know they expire. Can a lender run the numbers to estimate instead? Kind of like a fake approval.
        • -Educate educate educate!
        • -Become more active on Biggerpockets to build relationships and understand our market better.
        • -Attend at least one investor meetup.
        • June-
          • -Attend as many meetups as possible, including the first free meetings of the local REIAs.
        • -Choose one and stick with it.
        • -Analyze
        • -Educate
        • -Network
        • July
          • -Choose properties that are for sale to drive around and get a feel for areas and the properties themselves.
        • -Talk to my dad (who is experienced in construction and repairs) to get a feel for how much upkeep/repairs would cost and/or go to Home Depot or other hardware stores to scope around and talk to people.
        • -Get a preapproval for a loan. I know they expire in 60-90 days usually.
        • -Continue to network, attend meetups, and educate

• July-August-
• -Honestly not sure what else I need to do at this point other than what I would be doing already to continue preparing before we pull the trigger. Any ideas? Anything I’ve missed?
• August
  • -Find a deal and pull the trigger!