Hey everyone,
I wanted to share what I have experienced in the real estate in the last 2 to 3 years, as someone who probably just got out of the beginner's phase in his investing career(or is still at it). So far I have owned 4 properties, including my own home, in which I have another tenant. Nothing informative, and no soliciting. Just wanted to let it out and be heard from like minded folks.
I came to the US from S.Korea in 2018 when I was 28, and had worked full time as an RN in one of the city hospital in New York City. On my way to work or when I got off work I would see people lying on the lawn enjoying the weather, which made me wonder how come I go to work on the beautiful sunny Saturday while the rest of the world is having fun(Probably majority of them in the lawn were there after work but somehow I acted like I was the only one who goes to work). Well, I don't know about any wealthy people, but I did know they don't work 12 hour shift in the hospital. I was going to apply for nurse anesthesia school for more income from my job. At the time that was my end goal but then I realized that I needed to reconsider my goal in life and make sure I am headed in the right direction. I started searching and reading about how to make money and build wealth quicker. Small businesses, stock investing, having youtube channels... then I was randomly listening to a guy talking about the real estate and later I realized it's something called BRRRR and he was David Greene. After I finished watching that video, everything he was talking about just seemed to make perfect sense(now I know it's not as easy as it sounds in the book!). That flicked this switch in me that day and I have been a big fan of him since, of course along with Josh, Brandon, J Scott and many others.
I had a tiny bit of saving in my bank account, which was of course nothing to do a deal anywhere in NYC.So I looked elsewhere but with just a little over 50k, there's only so many options. So I chose one of the lower priced market in NJ for my first deal. I kept saving, reading, listening to BP podcast and was looking for a 'deal'. It took about 1.5y for me to close on the first deal since the first time I got interested in RE. I purchased this old rowhouse for cash, slightly better looking one than houses in The Wire. and I had just a few thousands left in my bank account. And just on time COVID-19 hit, putting everything on hold. My plan was to refinance it as fast as I can, but I was not able to find a lender who was interested in cash out refi for less than 100k ARV. In a nutshell, it took about 10months to pull my cash back out. I did not feel good about it but what happened happened.
With the money I saved plus the money I pulled out from the first one, I decided to do a flip because I needed capital to acquire more rentals. Used hard money, which was expensive of course, and I changed my mind and decided to keep the property, which was then refinanced and tenant occupied. It was section 8 tenant, the tenant did not pay for about 6 months for her portion, which was about half of the rent. Eviction was filed along the way, but thankfully she has almost caught up with her rent now, but it was definitely some harsh experience looking back.
And then I bought my primary residence, moved from NYC to NJ, used FHA, have one tenant living with me in the house(good thing about it is each of us occupies different levels with separate entrance and we never see each other.).
Earlier this year I bought a quad for cash. The market was hot, all the houses had multiple offers as soon as they come up. I was putting in offers on small multifamilies with loan and I was talking about it with my family in Korea. My parents heard what I said and were generous enough to lend me money at 4.6% interest rate only, which will be paid back once the property is refinanced. I was quoted for 7.35% rental loan from my lender the other day so I am kinda holding off on it..
On the side note, my parents purchased an apartment in Korea about 7 years ago for about 220K. They again generously gifted this apartment unit to me last year. Over the past few years market price went up like nothing we've ever seen, and nowadays asking price has tripled or even quadrupled, at least until this July. These past few months the current global economy definitely affected S.Korea and there has been absolutely no transaction in the area and demand is very low(ARM is the most common there!). I have been telling my parents to sell this apartment since earlier this year but they want to keep it, expecting the value will be even higher in a few years, since renovation throughout the complex is underway and the area is great, which I understand.
My goal at the moment is to realize its equity and use my savings and the proceeds from selling it to buy 6 to 12 unit property for cash by the January 2023. The apartment is on the market at lower price(not low enough probably) and it's not very likely that it's going to sell in the near future. So I am looking to be creative and just need to figure out how to fund the next deal.
So that's how it went down on the investing side. On the personal side, It's been a rough ride, I am not going to lie. I had people to support and my wife's small business and also do my own real estate stuff. I was struggling at times, saving as much as I can, always poor in cash with debt, there was a time I personally asked around to borrow money so that I can either close on a deal or pay contractor before I can get each draw from hard money lender. No night out, no weekends, no travel, no life. A lot of moments and nights I kept repeating myself like a crazy person that I won't give up. I've had only 2 or 3 individuals in my personal relationships to talk about what I do with RE. It took a good amount of time and effort to bring my wife on board for this journey. And I appreciate her patience greatly. Even these days I work 2 nurse jobs for healthcare industry that allow me to fully remotely work at home which allows flexibility. I tried to find freedom but what really happened was, I have never worked and endured and been patient at something this much this long. I try to strictly stick to the core principle that I spend less and contribute a portion of saving to my asset, repairing, sometimes evicting people, renovating.. but I don't regret what I did, how I did it. Overall, I am satisfied with the performance of my properties. And I am planning on slowly reducing my nurse job workload. I am doing pretty well compared to myself 3 years ago. It's just that if I had more money so I didn't have to work 24/7 at my nursing job for nearly 3 years, I could've read more about real estate, get on BP, go to meetups or events to build network, practicing English and communication skills since it's not my primary language, and take better care of my business in general. I just couldn't find time to do anything to grow as an investor and as an individual, other than listening to podcast while driving. These days I try to find the balance in life and live a life, because if I don't, I know I won't be able to go far.
So that's pretty much it. To sum it up, It's never been easy, but will I do it again if I go back in time? yes, for me, there is no other way around to get to where I want to be. Anyone who has read this far, I appreciate it and would appreciate your comment. I apologize if my writing was gibberish. I am a terrible writer lol. Thanks all, thanks a lot BP.
