All Forum Posts by: Collin Placke

Welcome @Luke Nafrada

Out of state BRRRR is a great way to get started in real estate for low to no money down if you find the right deals. It's how I got started, but I've since transitioned to 100+ unit apartment buildings.

My advice: locate and select your market FIRST. Tennessee is a big state, narrow that down by looking for cities with population growth, job growth, industry diversity, high occupancy and lower crime.

Once you select a market, build your team:

1) Wholesellers and real estate agents

2) Property Management

3) Contractors

4) Lenders

I would also advise finding a good mentor, even if you have to pay for it. I had one starting out and he saved me thousands of dollars and countless time off my learning curve getting started. I good mentor will save you 10x what their program costs.

By market analysis, do you mean analytics on the city where the property is located (population growth, job growth, occupancy, etc.)? Or market analysis on the property itself (comps, ARV, rents, ROI)?

Welcome @Kenneth Vasquez!

Out of state BRRRR is a great way to get started in real estate for low to no money down if you find the right deals. It's how I got started, but I've since transitioned to 100+ unit apartment buildings.

My advice: locate and select your market FIRST. Look for population growth, job growth, industry diversity, high occupancy and lower crime. 

Once you select a market, build your team:

1) Wholesellers

2) Property Management

3) Contractors

4) Lenders

I would also advise finding a good mentor, even if you have to pay for it. I had one starting out and he saved me thousands of dollars and countless time off my learning curve getting started. I good mentor will save you 10x what their program costs.  

Depends on if you want cashflow or not...

Denver will work for live and flip. BRRRR won't work here, not a cashflow market.

Dallas- solid cashflow market (Fort Worth as well) so BRRR works well here. I live in Denver and invest in DFW- live where you want to live and invest where the numbers make sense.

Charlotte- Never visited, but I've analyzed the market for rentals and it has everything an investor would desire. Again, I would invest in Charlotte while still living in Denver. 

@Neil Masincupp First of all, I want to congratulate you on your financial progress... What you listed above puts you light-years ahead of 90% of people your age, but you came here for advice, not kudos, so let's get down to it...

First, you need to decide your risk tolerance. Do you want higher cash-on-cash returns in exchange for debt on your properties? Or do you want lower cash-on-cash returns for the "peace of mind" of owning the properties outright. At your age, and with the properties producing $4k/month, my advice would be to keep the leverage on the houses and let them be paid off over the 30 year term. Your cash-on-cash returns will remain high- remember if you pay them off you will have a large amount of equity tied up making a lower return. You have to consider the returns you could get on that equity outside of the houses. You have plenty of room on your cashflow to weather a storm, and it doesn't seem like these are over-levered in the first place. 

Now, my advice comes with the caveat that you have to make smart moves with the cashflow. It can't just go sit in a bank and lose value to inflation. As for the stock market, I personally think it's over-inflated and I know enough Wall St/Hedge fund guys to know they too think the market is ludicrous at this point. Also, you have plenty exposure to the stock market with your retirement and pension accounts. 

I have been putting my extra cash into passive investments in apartments. I become a limited partner, invest my money with professional teams with decades of experience, and I get double digit returns and tax benefits. That may or may not work for you as well, if not, then use the extra cashflow to buy a few more rental properties because you seem to have done pretty damn well on the first ones!

Collin

I use Frontline for my property in Fort Worth. They are active on BP and have done a good job for me. They were great when it came to double checking my rental projections, but more importantly they were great at telling me areas where NOT to invest. 

https://frontlineproperty.com/

Good luck on getting your first property, just getting started is the most important part! 

@Nick Alexander consider the following questions before you jump in...

1) What are your cashflow goals? In my opinion, anyone looking to earn $10k per month or more from rental cashflow should skip single family and go straight to multifamily investing because of the scalability. Plenty of people on here will argue with me on this, but here is my reasoning... $10k per month at $250 cashflow per door is 40 houses. That's 40 roofs, tons of sinks, 40+ fridges, and 40x anything that can break. Expenses will kill your cashflow. Now consider one of the 100+ unit apartment complexes I'm invested in... 10-20 units share one roof. If a sink breaks, they are all the same and we have 3 spare sinks on a shelf and a full time maintenance man on location to fix it. The scale and efficiency of multifamily is lightyears ahead of single family. 

But the answer to question one brings up question two...

2) How much control you want to have in your real estate investments? Large multifamily real estate is a team sport, no ones takes down 100+ unit properties alone. If you're looking to fly solo and do everything yourself you should stick to single family. 

Bonus question:

3) How much time do you have to invest? Many Drs, Dentists, Lawyers, and other higher net worth busy professionals chose to passively invest in multifamily properties. They get all the benefits of real estate investments but it doesn't require a further investment of their limited free time. Obviously, this wouldn't work well for anyone looking to have complete control, but these people are too busy to learn about real estate investing on their own and they are happy trusting their investments to experienced professional multifamily management teams.

Also forgot to mention you should check out the H.E.B. area (Hurst, Euless, Bedford), it's a great market and a little closer to Dallas.

@Zac Barnes Don't be nervous. I bought my first BRRRR in Fort Worth while living in Denver... Trust the numbers and the process and the rest will work out.

Don't let proximity to your own house be the determining factor. Live wherever you want to live, but invest where the numbers make sense. 

First, its important to understand transactional real estate investing (flips, wholeselling, new development) versus building equity in real estate (BRRRR, buy and hold, multifamily).

Flipping is like having another job. Its transactional in nature meaning if you quit flipping, your income goes away. With the BRRRR method, you are building wealth through equity and cashflow and if you stop buying houses you income doesn't dry up for as long as you hold your properties.