All Forum Posts by: Greg P.

@Greg P. Hi Greg, I’m still relatively new at this, only being involved in real estate investing about 6 years this go round. I’ve been doing fairly well with my purchases and they are appreciating nicely.

That being said I’m only averaging about $225/door.

Maybe in different markets you could find $300/door but I think it is going to be difficult as a beginner.

It’s going to take you a considerable amount of time and effort to reach $350,000 per year.

My average rent is about $1100/month.

You might be able to find a lower price point per unit than I’m at but it’s a LOT MORE WORK to have low quality properties as opposed to nicer ones.

I’d recommend starting slow with one 2-4 unit using leverage and see if you even like being a landlord.

Then buy a second. And after a couple of years if you are enjoying it start to scale bigger or faster or both.

Hey Greg,

With $750k to work with, you're in a great spot to make a serious move towards financial freedom through real estate. The right strategy for you is going to depend on a few things, like your risk tolerance and how much cash flow you need to hit your goals. Since you're looking to transition out of the corporate world over the next 3-5 years, I can share what worked for me.

I started with a lot less capital—around $250k—and used the BRRRR strategy in Detroit. Over two years, I built up 12 doors, which now generate about $100k in net income annually. The great thing about BRRRR is that it allows you to keep recycling your initial cash, which makes it easier to scale quickly while building cash flow and equity.

Flipping homes, in my opinion, is more of a job than an investment. It could be a solid route once you've transitioned away from your corporate job, but it's tough to juggle flipping while working a demanding W2. If I were in your shoes and aiming to build a portfolio while still working, I'd focus on strategies like BRRRR that let your capital work for you while building both cash flow and long-term value.

Happy to discuss more if you have specific questions or want to explore Detroit as an option!

—Travis

@Greg P.

With a $750K budget, I recommend focusing on single-family home investments in the Midwest. This region offers attractive home prices in the $100K–$200K range, combined with rental yields that often exceed the 1% rule. This provides an excellent opportunity to purchase properties, make light renovations to increase both rental income and property value, and optimize cash flow. Especially in a region where homes often have great bones but need interior TLC. 

From there, work with a reliable cash-out refinance partner to continually access your equity, allowing you to keep non-taxable cash on hand for future investments. By repeating this process, you can scale your portfolio while working toward your desired monthly income goals. This strategy offers both stability and growth potential, especially if you're able to identify high-demand rental area. For example, in market I see single homes valued 100-150K, taxes 1-4K, rents 1800-2200.

Buy 2-3 quality rentals with a 1.25 DSCR. Buy the same amount(in regards to downpayment allocations) in debt notes. Every year do the same, 1-2 properties + 1-2 notes.

Can change up rental style; maybe some STR, maybe some LTR. Pick 2-4 locations, get no more than about 6 deep in any but no less than 2 deep. Prioritize quality locations.

Keep healthy amount of reserves per property, hire a PM, and hire a tax friendly CPA(not planning just prep). 

Around year 7 or 8, ideally year 10, re-assess your equity and maturation of those debt notes and re-adjust how you invest to suit your needs. 

@Greg P.

assuming your post is real... i'm with @Jonathan Greene in that i don't know enough about you to even try to help.  so i'll throw out my standard cold water.

-flips and BRRRRs are very time consuming, energy intensive, and hands-on. and they're difficult to do, because you're up against businesses that do nothing but flip and BRRRR, and here you come along wanting to do 1 home run right out of the gate. that's REALLY difficult! it will take a lot of work to build a network to get viable deals to come to you. and if you're busy with your full time job it's even harder.

-interest rates AND prices are high right now, which have REALLY hurt cash flow. real estate is still a great investment - here we all are! - but the 'cash flow' you will have in just 3 years even after purchasing several properties will.... not really amount to anything. it's after 5-10 years that things really start to stabilize. you fixed everything the previous owner neglected, you have good tenants, your rents have gone up, etc. for example, my cash flow ranges from: $0 a month on my class A property, to $300 on a single family that I BRRRR'd and have a 4.5% interest rate on. it's a good portfolio. i worked hard to build it. but i can't retire on it.

-mobile home parks and Section 8: ...maybe?  is that what you want to do?

-i wouldn't give up on Florida just because the midwest looks cheaper.  you lose all ability to be hands on and add value.  so... i'd start in Florida.  buy 1 rental.  see what you think.  don't worry about when you hit 21.

hope that helps

There's a lot of other things to consider here but I'll go through your list and make some suggestions based on 10 years of investing across various asset classes - single family, multifamily, industrial, storage, retail, office, etc. and I've had experience with section 8 housing, BRRRR, flips, etc.

• Purchasing rental properties? (Best regions/areas for returns?) -- sort of depends where you live and if you want to invest out of state / have the ability to manage a team remotely, the best out of state investors are very active in managing their teams. I like the midwest (I'm from Milwaukee) but there are great linear markets here with solid cashflow and less volatility.
• Flipping homes? -- if you're looking for a way to get your hands onto more capital quickly you could certainly do this. I'd start small and just try to learn the game of flipping. 
• Acquiring pre-existing rental portfolios? -- solid strategy, make sure you look at the trailing 12 months cashflow and do extensive due diligence, you might even consider hiring someone to help you with due diligence
• Investing in mobile home parks? -- solid strategy as well, if you go this route I would consider investing with an operator that specializes in this asset class. My friend Dylan Marma would be a solid bet and I'd be happy to make an intro.
• Using leverage to scale, such as borrowing against this cash for larger down payments? -- depends on your risk appetite but leverage can certainly pour gasoline on your real estate investment fire in both a good or a bad way. 
• Employing the BRRRR ? - tried and true strategy, start small and learn
• Targeting Section 8 housing? - just starting out I would steer clear, it's nice that the rental income is guaranteed but that can be a rough tenant base and many new real estate investors just get smoked

If I was just starting out in real estate and had $750k to play with, I would really try to understand my goals - is it to retire on a beach and be completely passive? If so, I'd 1) join a real estate investing mastermind that focuses on your asset class of choice (multifamily, industrial, storage, etc.) and learn as much as I could - it's worth the $10k-$20k in both knowledge and connections. Then I'd probably spread that $750k out amongst numerous operators and diversify across asset classes that I like (for me it would be industrial, multifamily, storage, and mobile home parks). I would target a 2.5x equity multiple and 8% cash on cash return, but I would focus mainly on the operators and try to figure out if I believe in the team and vision, and really try to understand if I trust them or not. From here you could decide if you want to stay on the passive side of things as an LP, or if you want to begin raising capital for your own deals / funds based on your track record of investing with other experienced operators and being part of the masterminds that you're in. Theoretically you could turn that $750k into $1.5m, and then turn that $1.5m into $3m within ~15 or so years and be earning 8% on your equity along the way, relatively passively, and it would allow you to build a track record to start doing your own deals. 

Just my two cents! I have resources available for you if you're interested just reach out via DM.

Geoff, 

I sincerely appreciate you taking the time to share your feedback. I’ve enjoyed reading your comments and look forward to connecting with you directly in the near future. Thanks again, and have a great holiday!

@Greg P. welcome to the forums and congrats on the first post! It all depends on how active you want to be as you start out and how much experience you have thus far? The more actions you take of course the more money you will save but it will take more time, effort and energy while there is a learning curve which often times can be pretty steep in this industry. If you're going to continue to work while you start to build a portfolio I'd advise to invest passively, at least for the first few deals. There are companies out there who purchase homes, renovate them, sell them to investors and manage for those investors as well on the back end so it can be an extremely passive way to invest. While it doesn't provide a sexy return like a flip or BRRR it's a great way to start and it's a slow, consistent return for you. If you started somewhere like Texas, where there's more appreciation, you could do this for 5-7 years then 1031 exchange those properties into higher yielding products that'll allow you to walk away from your job. Again this is if you want to do is passively.

In regards to markets I would recommend the southern/middle part of the country because the price points are much friendly as well as the laws. Longterm my family's plan is to build our wealth and cash flow in rental properties but we focus on median priced homes. Not only are they the most conistent as far clientele you're working with these areas will have the most demand from renters and owner occupants so units will fill up quickly, more times than not with higher quality clientele. 

Happy to discuss in further detail if you're interested. Best of luck on the journey! 

So many ways to go about it. Study all strategies, markets, etc, and find what fits your strategies. Doing a BRRRR/flipping OOS probably isn't your best bet to start, so I would lea towards something more passive. It gives you more time to learn about the market you are in, as well as others you are still looking at. Once you have more trusted sources, like your realtor, PM, maybe even a good GC you can get referred from by these already trusted sources. This isn't something you do over the course of just 5 years, it will take a while. And Jonathan Greene is right, don't stick to strictly real estate, diversify. If you have any interest in Greater Cincinnati, let me know and we can talk some more, good market for cash flow and I think has a bright future

If you are saying you want to be making 350k a year from real estate before you leave your job, you have a LONG way to go and aren't thinking of it the right way right now. It's not realistic the way you laid it out. It seems like someone told you real estate investing is a good idea, but you haven't done any research much on your own yet. I say this because your opening post was like walking up to a buffet and asking the chef if you should have pizza, sushi, ice cream, scallion pancake, spare ribs, or peanut butter and jelly. The chef can't answer that question.

Turnkey rentals, one by one, would take you about 30 years to get to 350k in income. The average turnkey rental make about $300/month.

From what you said, using real estate as a side vehicle with your good salary and earnings is a good start, as well as investing in core things like index funds. And when you go to an open forum and say, hey I have 750k to burn, you are inviting every guru and charlatan to pitch you a course o a way of doing things so you are opening yourself up to all the junk.

 @Greg P.

There are a lot of unknowns in your proposition.  The first one that comes to mind is do you plan to keep working while building your real estate empire?  And how much money are you making in your current job that you would want to replace with your real estate income?  Those are probably the biggest questions someone needs to know to determine the feasibility of your ask.  Also - what part of the country do you live in... California where expenses are really high, versus like Ohio (etc), where expenses are really low.

Using leverage is always going to make your buying power go further. So yes to that one. Flipping / BRRRR comes with a lot of work required... who is going to do that work? If it's not you - you are going to be paying contractors (most likely) retail repair rates - and with the prices of housing (even dilapidated housing) pretty high right now - I would say that flipping is not the easiest "in" to the market. Flipping remotely is even a worse idea - you have no control over the scene and will likely be exploited because of it. Flipping comes with a pretty large learning curve. Simple mistakes can be very costly. As an example, we decided to replace the windows in a house we were renovating and ended up costing us $50,000 extra because we got into issues with permitting and suddenly found ourselves having to hire an architect, speciality contractors, etc. We had to remove the windows we had already installed in a 1925 house and reframe the openings to bring them to 2023 building code. Major nightmare! So just know that you don't know what you don't know... and with flips - that can get expensive really quick! (Had we rebuilt the original windows we would have been fine and wouldn't have had to bring them to current code.) LESSON LEARNED!

Rental properties come in several flavors... short term, long term, etc.  Short term will make you more money, but require a lot more management (new tenant every 3 days, turn over, cleaning, etc).  Long term tenants are much easier.  Turn over is usually measured in years.

I'm not a fan of mobile home parks.  They do not appreciate like actual real estate and your caliber of tenant can be lower which can bring with it its own problems. 

Rental portfolios would be a quicker way in - as you could possibly buy numerous properties in one transaction.  

Like the saying goes - much is about location, location, location.  In the midwest, prices are lower.  Rentals boil down to how much do you net after paying principle, interest, taxes, insurance, and a maintenance reserve.  In todays market $300/door / month is probably a pretty good net if you can even find that (at least where I live in Florida.)  Depending on where you buy, you would want to take the average priced house and figure you have to put 20% down to buy it with financing.  From there you divide that down payment into $750,000 (your nest egg) and it will tell you how many rentals you could possibly finance.   You then multiply that by your anticipated net profit per month per rental to determine a monthly income and see if you can live on that.  That will start to tell you if rentals are a feasible option for you.

(Keep in mind there are Fannie Mae maximums on the number of personal loans you can have - which is 10 per person. If you are married - put each one in a single name and you can then have 20 - there are higher qualifications the more you have though. If you go with commercial financing you can put them in LLC names and you won't have those restrictions - but will have crappier financing terms - like 5 year locks instead of 30 year.)

We bought 12 houses in 2018, 10 in 2019, and 9 in 2020 before prices went skyrocketing. (We switched to commercial financing when we ran out of loan slots with Fannie Mae.)  Once we got to about 20 rentals we quit our full time corporate jobs and now manage our rentals full time.  Since 2018 the value of our portfolio has probably tripled!  Can't beat that part - but it likely won't come back around anytime soon.  Realize that today you are looking to buy into the real estate market towards its recent peak.  Not that prices will likely decline anytime soon - but it's much harder today to find value like a few years ago.  Areas like Ohio seem to be mentioned quite a bit on the message boards for better affordability.  We haven't bought anything in the past couple of years locally because the value proposition compared to what we already own just isn't there.  (That's not to say you can't find cash flow - it's just much more difficult in today's market).

Hope it helps! 

Randy