Journal Entry #1: The Start

   My goals: To pay for my Kids College; to take my family to Disney; to retire when I am 47 year old with my work pension; to have 100K in passive income; to run a marathon; to buy a Class A RV; to go on a 1YR RV Trip with wife; to visit every state with wife, to go on a cruise to the Caribbean and Pacific and Mediterranean; to build my wife a custom house; to own three MHP; to own 1 Large and 1 Small Apartment Building; to own 25 Rentals; to own 10 Vacation Homes; buy a rental property no later than October of 2018. 

   Yes, I want to own a diverse portfolio of Real Estate. I also don't really have enough experience in real estate to narrow down what I want and what my bigger real estate goals are. I just know I want to retire when I am 47, do a bunch of stuff with my family, and I know real estate can get me there. So, my situation: I am 27. I am in Asheville, NC. I have 10K in my savings and a couple in my checking. I own one home in Birmingham that is a rental but I am breaking even on (more on that one in a minute), I have a good salary and enjoy my job and want to keep it right now. Me and my wife have student loans, I have one car payment, and I have one more loan from college that I will be able to payoff with my next set of tax returns. That is my debt. My credit score is over 750 so I know I can get a good loan because of my credit. My wife isn't much of a fan of real estate. She is nervous because we are losing money on the rental house. So, my next deal needs to be a home run to show her that real estate investing is the way to go. 

   My rental in Birmingham. So, we moved to Birmingham in 2015 and thought we would be there long term. We did the American Dream: we bought a house to raise our family in. It was in a small town 30 minutes south of Birmingham. The subdivision was unique with 350K+ houses in the front of the subdivision and the cheaper houses towards the back. The house we found was our dream house: it was a brand new ranch with brand new hardwood floors, a giant fenced in backyard, a huge master bathroom with my wife's dream walk-in closet. Complete open floor plan. The house had been sitting for a year because the builder was did a terrible job marketing it. The pictures were few and before the builder made upgrades to the house. He was building 80 more houses in the subdivision and wanted this one off the books so he sold it to us for 200K. I used a VA loan to 100% finance the property. We thought it was a steal. A year went by and my job in Birmingham sucked (I worked 16hr night shifts) so I found a job in Asheville with a 15K pay raise and we got ready to move! We were originally going to sell the house and thought we could get 230K for it. There were other houses in the subdivision smaller than ours being listed for 220K-260K. We should be able to sell. So we brought in a real estate agent. They appraisal was 187K by him. So we got another one. This one said it was 190K. The agent explained that the other houses had been sitting for over five months. They were overpriced. She gave us a recommendation for a property manager. Manager said we could list it for $1599. We said great. He had two months before we moved to get someone in. For two months there was zero interest. No one came to see the house. No one called to ask questions. Nothing. So we dropped the price to $1550. Then we moved to our rental house in Asheville. Now we were paying rent and paying a mortgage. So we dropped it to $1450. We finally got someone to bite and to rent our house. I thought this was fine because we had renters who were paying us more than our mortgage (mortgage was $1106) so we were making money! Now, after reading about real estate like crazy for the last couple of months and doing the math and putting money aside of capex/repairs, paying the property manager, I am breaking even. But, even with that, I knew that I could make money in real estate. I just needed to learn.

   So, here I am now. A few months later. A few months of reading as much as I can about real estate. Listened to 100 podcast episodes of Bigger Pockets. Read Rich Dad, Poor Dad. I have a base. Not a great, solid base that I can build a billion dollar skyscraper on. But enough to build a small hut. And out I go, trying to find my first deal. I want it to be a by and hold. I want it to produce $300 cash flow. That is my biggest priority. I am setting aside 10% for CAPEX, 10% for Repairs, 10% for Property Manager, 5% for Vacancy, $40 for insurance, money for property tax based on the county assessment. I planned on using the FHA loan to get my first investment property until I read that you have to live in the home to get that. I will have to do more research on that, but if that isn't the case, I will have to figure out how to get 20% for a downpayment. I had this excel spreadsheet all set to analyze deals...and I just kept reading. Reading. Gaining knowledge. Figuring out if my numbers were right. Until I listened to a podcast where the it was mentioned about being paralyzed by knowledge. Then it hit me. I was paralyzed by just wanting to learn everything before I did anything. So I went on Zillow. I drew a circle around my area about 1 hr away in every direction. I put the max price at 100K. And I looked thru every home for sale and saved the ones I thought could work. Then I went thru and analyzed over 100 homes, labeling them as either Y (rent ready), N3 (needs paint and some flooring), N2 (new counters and some cabinets, maybe some stuff in the bathroom), or N1 (the house needs to be rehabbed) and then used my numbers above to figure out at what purchase price I would need to purchase it at in order to get a $300 cash flow. I used Zestimate to estimate the rent price I would have (I know this isn't exactly the most accurate, but I think it gets me in the ballpark for now). And that is where I am now. My next step was to draw an even bigger circle (2 hours away from me) and get a daily update of houses that were sold under 350K, houses listed for rent under 2K, and new listings for under 100K that way I can see the market everyday. And that is where I am at now with my next step being to organize my houses that I analyzed into zip codes and begin doing research on each of the areas finding out if those areas will be good investments. Once that is done, I will go and call real estate agents and ladlords to get more accurate numbers for the areas. Then I will vet and find a real estate agent/property manager and hopefully then start putting offers in. Once I get someone negotiating, then all I got to do is figure out how to finance it.