All Forum Posts by: Joe Garretson

@Steve Lopez welcome to the fray. BP is a great source but you're going to find a thousand different opinions here. Half the fun is wading through everything. 

The truest form of passive investing in RE is lending money to active investors. You provide the funds, they go flip, purchase rentals and pay you interest/dividends etc. That comes with some risk depending on the borrowers. Do you know anyone you trust that is flipping homes or buying RE? Could be a good place to start.

It looks like you're located in LA County, correct? If that's right, a house hack of any sort is gonna be really tough financially (I grew up in Ventura County). Plus sounds like you might be a bit older with kids in college so living with tenants might not be the best, I totally get that.

The last option and not nearly as passive depending how you approach it is to go buy some long term rentals anywhere in the country. I just purchased my first investment property 1000 miles away. David Greene has a great book about long distance investing. Lots to research there but it's very doable. The market, neighborhood class, deciding to work with property mgmt and so on will all drive how passive your investment is. I was emailing with my property mgmt company while traveling in Canada and then The Netherlands. Not a big deal to me. Just depends on what you set for limits in terms of passive. Having the amount of cash you have can buy you a lot of real estate around the country and it will likely be a better investment over 20-30 years that 6-7% in a IRA.

Hey AJ, I just went through this. I live in Colorado and decided investing in Milwaukee for a few reasons was the right move for my wife and I. I started digging through the forums here and came across a few names of property managers and their companies that were active in the forums and were posting content I felt was useful. I followed up with some research on these companies through other means like Google, Yelp, etc and reached out to them through email or messages here. That work led me to one property manager in particular who was responsive and very open. After a 15 minute phone conversation, I had a great rapport with him and knew it was the right fit. He recommended a few realtors and I went through the same process again. One more time and ended up with a mortgage lender in the area.

All this led to finding my first deal which we closed on in early December. It was rented with an incredible tenant within days of being ready. I cannot emphasize enough using these forums to research. You just might want to change the order a bit in who you search for because good property management is much harder to come by and those folks seem to know the good realtors and other resources in the area you're considering. 

Best of luck getting going!

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $140,000
Cash invested: $28,000

A very typical 3/1 1225 sq ft bungalow in the Uptown neighborhood. It's just on the border of Tosa in an area that is getting better every year with high rent demand and growing values.

What made you interested in investing in this type of deal?

My wife and I made our first investment purchase in Dec '23. We purchased a single family home in Milwaukee. Her entire family is around the area and given the very high entry costs where we live in Colorado, this was a great long distance market for us.

How did you find this deal and how did you negotiate it?

Through connections made here on BP. I first contacted a highly regarded property management company who then suggested a great investment focused real estate team to work with.

How did you finance this deal?

My realtor recommended a fantastic local bank and mortgage officer who was able to close the deal on a conventional loan in about 21 days including the Thanksgiving holiday.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Ed Riggenbach with Welcome Home Milwaukee for property management
Spencer Harvey with Keller Williams
Carol Ford with Waukesha State Bank

We closed on our first property on 12/4/23, so like 45 days ago. We put 20% down on a $140,000 purchase and have a conventional 30yr at 8.5%. We don't make our first payment until Feb 1 but I believe rates have dropped significantly since we purchased. The house is rented on an 18mo lease through June 2025. The DSCR on the current loan is 1.5. With taxes, insurance and prop mgmt we're still cashflowing.

Question is: should we refi already? Wait in the hopes that rates drop further this summer?

My wife and I officially own our first investment property. In many ways, it was almost too easy. I guess really it comes down to what I'd heard so much in that you'll close your first deal, step back and say, what was I worried about? 

Now onto getting it ready for tenants. It doesn't need too much from what I can tell to be rent ready. I've got a PM company lined up and have been communicating with them quite a bit to get things setup. 

The best part is my dad has quite a bit of money laying around. He's in his mid 70's, made a ton of money in California stepping up primary residences and just being invested in the stock market for 40 years. I talked with him quite a bit before I'd purchased this about using his cash instead of it sitting in a bank. Typical responses, real estate is risky, it's better in the bank, yada yada. I get under contract, talk to him about the numbers, he all of a sudden wants in. It's crazy how people's opinions change the second they see you doing something. I'm planning to talk with him about making him a silent partner, paying him more than he's getting in his savings accounts but less than what I can get for a mortgage and giving some small percent of net profits each year. That's a win, win, win all around. I might have a large sum of OPM falling into my lap having made this first purchase. 

Still recovering from entirely too much food and beverage over the holiday break. We're still on track for closing next week. Inspection came back, all 62 pages of it. This is old, that is old, that's a little crooked, this is a little off, this doesn't quite work right, nor does this. Of all the items, I asked for seller credit on the fridge and oven and the seller agreed to $750. I will have them looked at once we close and replace them if need be. According to the seller, they were working prior to the inspection so who knows.

The appraisal came back $5k over the selling price so instant equity! Hopefully this summer if rates drop and home prices go up, I can refi to pull some funds out to look for the next property. 

We're doing the closing remote so I'll have a notary at my house in Colorado on Friday to sign papers and then the actual closing takes place in Milwaukee Monday. 

I've lost countless hours of sleep worrying and thinking about what ifs all to realize I can pay the mortgage every month even if I never get a renter in there so... who cares? 

 Hi Kurt, all of these properties I've offered on have been on market. Clearly things are changing and it's presenting some opportunities to find good properties. Plus, I'm looking for a base hit in terms of a long term buy and hold. 

As for the team, lots of searching and reviewing of folks here on BP and I ended up reaching out to Marcus who posted above. At the same time I reached out to a property management company run by another frequent poster here on BP in MKE and he recommended Marcus as well. I've ended up working with an agent on Marcus' team who's been very helpful and extremely responsive. I've got some familiarity with the Milwaukee area having a ton of family all over Wisconsin and they've provided feedback that has lined up with suggestions and direction from my agent. 

Well, back under contract as of this morning. 

This is the second house I've been under contract on in the past 2 weeks. After 2+ years of learning, listening, saving, something switched a month ago and I submitted two offers in 3 days on two properties; one in my home state of Colorado and another 1000 miles away in Milwaukee. The house in CO went to another offer but I was able to get the house in Milwaukee under contract. After inspection, my wife and I decided to back out due to a ton of issues that would have cost $30k+ to address and severely detracted in terms of rental prospects (mold, garage falling down etc). Best $375 I've ever spent.

We submitted another offer late last week on a property in Milwaukee and heard this morning the seller had accepted. Time to start the process again. Am I scared? Beyond belief. All the fundamentals are there with this property. It's in a great area, priced well, rents are decent in the area, the big ticket items we found on the previous property have been dealt with on this one. I have a good team surrounding us to get this closed and rented. It's just the what ifs...

It's Monday 11/13, we're scheduled to close 12/4. I will share the journey here as things unfold. 

Hey, 47 year old here. No properties yet but will be submitting offers on a couple by the end of next week. My journey started over two years ago. June 2021 driving from Oklahoma City to Ada, OK for a work trip. I'd downloaded a handful of the OG podcasts after searching for ways to make passive income. I had about $5,000 saved and was thinking I would fund an IRA or my HSA. Now, after two years, I've invested probably 750 hours into learning between books and podcasts, met with others locally who invest and have a hair over $30,000 saved. My budget is small in terms of buying power but so what? It took two years but so what? If you start today saving everything you possibly can and it takes two years and you buy your first investment property at 45, you've accomplished more than probably 99% of other Americans who will never own an investment property. And the first from what I've heard and been told is always the hardest to buy.

The tl:dr is how do you eat an elephant? One bite at a time. Start listening to episode 1 of the Rookie podcast, get a book from the library on RE investing and just take action. You'll get there. 

I think there's too much fixation on rates. We've had too long a period with artificially low rates and people now believe that's what rates just should be. I bought my first condo in 2004 with a 6.9% first and 9.0% second. We all know people who bought with rates way higher. As you mentioned, it's just part of the calculations. 

The biggest issue is rates combined with insane low inventory and absurdly high prices have led to this really weird market. We're all expecting prices to come down but with something like 90% of all mortgage holders having a rate below 6%, nobody wants to sell. 

I think this is all going to change heading into next year. Listening to people much smarter than me, the economy is/has been propped up by govt policies which are ending or have ended. Debts are coming due, expenses are way up, we're at a tipping point. Not 2008 style but we're going to have some opportunities next year to find some great deals, rates be damned.