All Forum Posts by: Matt D'Arco

Hi Jason! Thank you for the response. Sorry it took me so long to get back to this post, my business has been pretty busy this year and that’s where most of my attention has been. 

I’ve been looking into turn key out of state properties and they do seem appealing especially for our budget. I feel we could buy at least one property per year with the turn key out of state method. I do enjoy my business and it’s been doing well so there isn’t a need to gain quick financial freedom. That being said, the past year has really made everyone reevaluate their financial positions and careers/businesses. We would like to not have to rely on the two incomes we have as our only sources of income. 

I'd definitely like to connect and I'll send a private message. Leominster is actually one of the areas I've been looking into for a long time. But even still, it's tough to throw all your savings into one property especially when I don't have experience with rehab costs. But if you feel that BRRRR is the best way to scale with limited funds then I will absolutely hear you out on that. I'll reach out!

Hey everyone. What would you recommend as the best strategy for someone who does not own any properties and lives in Massachusetts?

I started a business right in the beginning of 2020. Timing couldn't have been better as the business did well and has really taken of since. I save everything I make and only spend when necessary. My fiance is the same way with her W2 job; save the majority and spend on necessities. We're combining our savings to buy our first investment property. Massachusetts is pretty expensive compared to other states. Granted I'm looking at on market properties so I know there can be better deals to be found. But it seems like it can be tough to buy here in MA when you can buy nearly a turn-key property in another state for far less and still get a little bit of cash flow each month.

So my question is, should we focus more on more turn key properties out of state or should we look into some BRRR properties here in MA?

And if the recommendation is to look for rehabs in state, what is the best way to find deals? I don't need a step by step, but a resource/resources that I can use to educate myself on how to find in state deals would be great. My business is pretty hands on so I don't have all the time in the world to be driving to properties to manage a rehab but I could definitely find some time to do that. Combined, we have about $30k to work with in cash which leaves us with about $20k to keep in reserves.

Let me know what other info you need from me and I thank you all in advance for the responses.

Matt

It’s this sort of question that gets me excited because it is this very question that keeps me going when things get hard. Once I reach my financial goals of completely replacing my income with rental income to the point where I can provide for myself and a family and then some, I want to buy the business that got me started in this in the first place.

The reason for me investing in real estate and being a real estate agent is so that I can put myself in the best possible position to buy the Conway Scenic Railroad in North Conway NH. This is a very long term goal as I don’t see the railroad coming up for sale again for the next 20-30 years. So I have plenty of time to get myself in financial position. Preservation of history through a living museum is my big why. Ownership of that railroad is why I’m doing this. It’s not the sole reason, but it’s the big one.

@Huong Luu

Hi Huong. I am a real estate agent here in the US. There were two main reasons why I decided to become a real estate agent. The first is that I wanted to invest in real estate and what better way to absorb the local markets and trends than to work in the industry I will invest in? The second reason is that my income isn’t limited as an agent like it was at my previous job where I made a certain amount of dollars per hour in exchange for a lot of time during the day. I could only take that so far before I ran out of hours to work. As an agent, I am not limited to how much I can make like I am at a 9-5.

For someone who is looking to just start out, I would highly recommend planning ahead financially. It’s difficult to make big bucks during your first year. I didn’t start out part time, I jumped straight in as a full time agent and I feel this is the way to go because it forces you to stay razor focused on your business. I saved up about one years worth of expenses before I started. And for me that wasn’t a ton because I lived with my parents and I only had to worry about them insurances and school loans plus gas.

Another recommendation for someone who is just starting is to treat this as a business. Because it 100% is. It’s not a job. As an agent, you are solely responsible for the production of your entire income. You set your own hours and have a pretty flexible schedule. If you’re someone who can hold yourself accountable then this won’t be a problem. If you’re not then you will struggle but can definitely learn. A great book for this is The Millionaire Real Estate Agent by Gary Keller. It will help you to create systems and hold yourself accountable.

I would also recommend a professional brokerage. It doesn’t necessarily have to be a big name. One of my biggest mistakes when I started was working at a small brokerage where the commission split was high. I quickly discovered that the broker was not professional and was not organized. I left there after only a few months for the brokerage I am at now. What a difference! There is office space, a marketing team, training sessions and meetings and great resources for agents at any level. What turned me on to that particular brokerage was the fact that I would see their signs all over the place and I even got some of their direct mail.

It’s easy to get discouraged at first as a new agent and even as an experienced one but once you learn to take responsibility for yourself and your business you will be just fine. It’s more work than a regular 9-5 but completely worth the effort. Save up those commission checks and invest in some nice cash flowing properties. You won’t be disappointed.

As far as recommendations for other real estate related jobs that isn’t an agent, I’d say look into being a property manager. If you’re on this site it’s probably because you want to own investment properties someday or you already do. And if that’s the case, you’ll more than likely be managing this properties at first. As a property manager, it would be like practice for when you have your own properties. And you’ll be able to connect with the owner investors and learn from them.

Whatever you choose, I wish you the best of luck! Real estate is a great industry to be in.

As an agent myself, I have gotten to work with investors and have learned a lot. From buy and holds to flippers. Great to bounce questions off of and learn how your local markets work while doing it. Another great option would be a property manager as these guys work with the owners of the properties directly. It’s almost like a practice run for when you own an investment property yourself because you’re doing all the things you’ll have to do as the owner. That’s if you decide to manage your own properties. If you do, I’d recommend Mike Butlers book “Landlording on Autopilot”. Great read.

@Chase A. The first thing I would do is borrow money to get my real estate sales license. The idea is to use the money from being an agent to invest in rental properties. The best way to make a lot of money is to take a job that has no income ceiling and rewards you for hard work. This could be any job in sales that offers a commission. Personally, I choose being an agent because I’m working in the industry I’ll be investing in.

Lead generation is key to converting people in dollars. One small portion of a commission can easily pay for a great lead gen system. BiggerPockets offers one to premium members.

Now if we're talking being a millionaire as in net worth, then you want to get into buy and hold properties. The route I like if focusing on equity is to buy a single family home that needs work and using the BRRRR strategy so often talked about on this site. Use a private lender to get the financing. Do your due diligence and make sure that the property will be worth well more than what you bought it for and paid to get it renovated. Refinance, rinse and repeat. Keep the property and rent it out.

If your focus is more on cash flow then focus on multi family properties. The value of these properties is determined on how much money they make. If you want the value of the property to go up, then find ways to add value to the property so you can increase the rent. If you can do that and simultaneously lower costs, now you’re onto something. Rent goes up, costs go down, value of the property goes up. As good equity goes up, so goes good net worth.

You’d have to be aggressive but to do what you’ve described above is definitely possible. If you have the work ethic and the drive and the willingness to learn and to put aside material things and experiences for a while, then you can 100% accomplish this.

Thanks for all the responses, great discussion here.

I’m just for now going to stick to my plan of saving my commission checks to cover the down payment and closing costs. Mass Housing loan offers a 3% down payment for first time home buyers and they offer down payment assistance up to $12k. This is as close to no money down as I’ll get. Obviously I need to owner occupy one unit but I’m fine with that. I’ll work on fixing up the property so I can refinance it and use that to buy my second.

I did read into the 2 years of income in order to qualify. Basically what I read is that even as a 1099, if the brokerage you work doe has been doing business for 2 years then you can use that as your qualifying factor. And the brokerage I’m at has been in business now for over 41 years. I do know the owner and his son very well (graduated with his son). We talk this stuff all the time and I’m sure I could turn to him if I run into a snag.

@Caleb Heimsoth yeah that’s why I posed this question. Because although I do love the book, a lot of his work seems to be vague and leave a lot of detail out. I don’t like the idea of investing with no money because you lose the control but I also don’t see why anyone would front the money to someone, take on all that risk so maybe they get their promised return. And I get that people do this everyday but for someone like me, just starting out and with little money to put down, I feel like it’s not a realistic way to start out. I could be wrong though I’m sure there’s someone on here who did do this their first deal or does this now. I’d definitely like to hear both sides of it.

@Heath Ryans thanks for the info. The article made it sound pretty straightforward and it looks like from your explanation that this would be. Reading it got me thinking that maybe there’s a faster way to my first investment than I thought. My brokerage business is picking up so more than likely I’ll be using my money for the down payment and closing costs but it’s good to know that this other option isn’t so far fetched. Sometimes I read Kiyosaki and think the stuff is just too good to be true. Almost like it’s too vague and leaves out a lot of the more complicated aspects.

@Caleb Heimsoth thanks for the response. When you say raise money do you mean in the sense of selling shares of the LLC to investors? Or as Heath was talking about, just having an attorney write up all the docs for me and the investor?