All Forum Posts by: Tom Wilson

Something within driving distance would definitely be nice.  My concern is that it's a saturated market for purchasing rental properties, but I'll definitely look into it more. 

I did an initial review of Vegas and came to the same conclusion.  I have family back in TX, so I might go back to that area to invest so I'll have eyes on my properties if I invest in their area.

Like the title states, I've got $300K (or will in a few weeks when we close escrow on our current home).  I've been studying real estate investment books for the last several months and am a little overloaded by all the options.  Honestly, I'm afraid of making a mistake starting out.  

I currently live in Southern California and don't like the Real Estate market out here.  Seems like the prices are near the top and from what I observed (I honestly haven't researched it in depth), it seems like the renter's rights outweigh the owner's rights (just had a friend in San Diego take 6 months to evict a tenant who wouldn't pay the rent).  I think I'm leaning toward investing across the border in AZ or NV which are within a 4-hour driving distance if I need to go over and check on my properties once a month.

I feel like I'm a bit at a crossroads at the moment starting out. Again, it feels like there's an infinite amount of options. I'm looking for somewhere to park my cash and get a return. Not sure if I should go for a standard SFR, multi-family setup, or go for something bigger, like buying an apartment complex. Reading through some of the books and postings here, some people start small and work up to a cash flow that allows them to get bigger options like an apartment. I'm not sure if it's wise to start small, get a feel for real estate investments with a single small, $100K SFR and then work up over time to something bigger after I get a feel for what I'm doing.

Would love to get the insight of the community.  Trying to navigate a course, but not sure what direction I should point in.

That's the question: figuring out our priorities.  Since originally posting this, I've sat down with my wife to go over our options based on my preliminary understandings.  The bottom line is that this house we currently have is amazing, but if there's a strategy that allows us to retire earlier and set our kids up for financial success, that is our priority.  Then on the other hand, do you enjoy what you have now (this house we're in) and maybe take a slower approach to real estate investing allowing us to keep our current home?  A lot we have to decide on in the coming months.

Great questions.  

As far as my strategy goes, if I sell my current home, buy a smaller home, and then take the equity from selling this house, I'd be sitting on around $300K.  I'm not sure if I would buy smaller houses out of state or something more aggressive, like an apartment complex (learning about this still).  I think I'll have a strategy within the next month or two (which I'll update on this forum).

I'd like to start off as active as I can.  In time, I'd like to move more of my time into real estate and find ways to offload responsibilities with my other companies.  

Thanks for the response!
 

Hey Steve, thanks for your insight.  It does feel a bit overwhelming, but I'm really enjoying the learning phase and will be coming back with a lot of questions again shortly.

Just got off the phone with my lender I've used for years.  His advice was to avoid pulling equity from the house and instead dump it.  Adding debt to the primary residence makes it trickier to finance real estate properties as I'll now have a lot of debt on my primary.  His advice (and seemingly the same I'm finding in so many places) is to dump the large house, take the equity, buy a smaller house, and then go after rental properties having removed debt from my liabilities column.  According to him, while doable if I pull equity, it gets trickier.  While I really enjoy this new house, I'm not in love with it and can walk.

Hello everyone!

After doing a little research on how to get into Real Estate investing, I landed on Bigger Pockets as the place to learn.  As I'm starting down this path of learning, I've got a few questions to hopefully help me along.  Let me start by giving you a little information about myself.

What I'm currently doing

I'm currently in the "learning" phase and am reading the following books:

• The book on Rental Property Investing (Bigger Pockets book)
• The book on investing in Real Estate with No (and low) money down (Bigger pockets book)
• Long-distance Real Estate Investing (David Greene)
• The book on Managing Rental Properties (Bigger Pockets book)
• Build a rental empire (Mark Ferguson)

I just finished Grant Cardone's "The 10x rule" and about to finish up "Rich Dad, Poor Dad".  So between all of these books, I've got the motivation to go full steam very soon (just need to get through some of these real estate books to get educated).  Plus I've read the stories from the Reddit Real Estate investing subreddit and my mind has been blown.  I guess you could say I'm sold on this path for investing.

My situation

Currently, I own 2 businesses (a web development agency) and a YouTube channel that are both cash flowing really well.  What I love about these 2 businesses is the cash flow, but what I realize is that if I don't show up, they won't last very long.  Plus, I'd like to find ways to invest the extra income I'm making with these 2 businesses.  I have the typical RothIRA's for my wife and me for retirement, but I'm not satisfied with them as my primary source of retirement income.  As such, I'm looking to invest in a vehicle (which is why I landed on Real Estate) that someone else pays for (my renters), will generate positive cash flow, will build equity I can one day hand off to my children as an inheritance, and I can use for retirement (assuming I properly maintain the properties).

I currently have a home here in SoCal (a city called Murrieta).  I bought a house here in 2009 when the market was in the dumps, sold my house last year after the value had doubled and traded up into a nicer house which I bought at a below market value.  I've got about $350K of equity sitting in my new house.

Questions

While I have a general idea of how I'll probably approach Real Estate Investing (probably go after buying properties and renting them out), I guess I'm trying to map out these things:

• What to do with the equity in my current home?  As mentioned above, I've got roughly around $350K of equity sitting in my house.  I'm not sure if I should pull as much as possible from the house to invest in Real Estate properties.  I just don't know the tax implications of whether it's better to roll this money into properties or keep it where it's at.  The problem with leaving it sitting in my house is that it does nothing.  It's not working for me.  I want my money to work for me and right now it's not.
• Should I keep my current home?  As mentioned earlier, I rolled the equity gained from my first house into this new house.  We're enjoying the new house, but if I'm honest, I realize it's a huge liability and not an asset.  It's large on a big piece of property and the maintenance, insurance, upkeep, taxes, heating, cooling, etc. digs into my pockets each month.  My plan is to be in a position in 10 years to generate $10K per month of cash flow from my real estate investments.  I want to do whatever it takes to get there and if that means dumping my current home for a smaller house, I'd be glad to do so.  But before I make huge decisions like this, I figured I'd get the community's insight.  I don't know if by keeping this house and pulling equity, the banks will this property as a big liability when making the decision to approve loans when buying rental properties.
• Finding a mentor.  I've been reading "The book on rental property investing" and came across the section last night about mentors.  I'm looking to find someone local that I can learn from and I'm willing to invest in them as well and hopefully form a relationship that's a win/win.  Guess what I'm asking is how to go about finding mentors in my local area.  Any tips you found useful would be welcome.

I'm sure these questions have been asked before, but for now, the biggest item I'm trying to work through is figuring out what to do with my equity.  The market is up and rates are low, so if I'm going to do a refi, I think now would be a good time.

Thanks!

Thanks to everyone who has responded.

Hey Arthur Garcia, I'm in Murrieta (Inland Empire), and the housing market has totally collapsed. Great area...very clean, new and virtually next to no crime. Both of your points are solid advice. In regards to point 1, I'm definitely very conservative and tend to move cautiously with my money, so I'm definitely gonna look at a business model of only buying what I can afford and not overextending myself with credit. In regards to point 2, yeh, I definitely need to meet people in this area I can sit down with and get their insight. Is there a general way to do this on the forum? Connect with others by location?

Thanks again!

I'm wanting to get into Real Estate investments, but not even sure where to begin.

I'm a small business owner that makes low 6 figure income. I have a home in So Cal I bought 2 years and am aggressively paying down a $210K mortgage (should have it paid off in a 7 more years). I'm wanting to get into Real Estate since the housing market in my area is in the toilet (you can get properties on the penny right now). Home values have decreased as much as 50% to 70% in my area since 2007. I'm in my 30's and my long term goal is buy homes over the next 20 to 30 years, turn them into rentals and hopefully have enough homes that can position me to be a good place financially when I retire (I also invest in Roth IRA's, so I diversify a bit).

I'm totally new to all of this and I'm wanting to find a community of others that have done this (or trying to do this) to get your insight. Curious if there's any place you'd direct me to get started, like a good book to educate me to begin this process.

I'm very conservative financially and I've watched so many people here in So Cal get caught up in speculation with the housing market, so I tend to go at a snail's pace with my money. I'm a bit uncomfortable leveraging myself with credit, but would rather take a slow and steady approach of buying a rental home, getting a renter in it, pay off the first home, buy another rental property, the take the money from the 2 rentals and roll that into the 3rd home, etc. I'm sure there are so many factors that I'm absolutely clueless about (taxes, crazy tenants, property management, etc.). I'd like to learn as much as I can from the community to begin informing myself to move in the right direction.

Thanks!