All Forum Posts by: Justin Gottuso

How did your first REI deal change your life?

Tomorrow I am submitting my earnest money deposit for my first REI deal! A 7 unit property plus a single family home with over 4K gross monthly rent for 160k. No joke, and it has many recent updates. I am about 80% excited and 20% scared. This will be a game changer for my family since this properties NOI will likely be more than what I make at my 9-5 job! Feels like I am about to cross over into a new world. This will get my wife and I much closer to our goal of financial independence and quality time together as a family.

Looking back to your first deal, how has your life changed because of that first property and going down the road of real estate investment? Thanks!

@Matt Burgess when I was your age, I’m 34 now, I had a vision to buy, renovate and rent out properties over time. Grew up around real estate with my family. But, I didn’t do it. Why not? I lacked dedication and discipline. I also did not really invest time and energy into learning all that I could. Money wise, didn’t have much, but I could have focused on getting a good W2 job earlier in my life they would’ve allowed me to get a loan for my first property. I could have I was hacked my way forward in my 20’s and might have already achieved the dreams I had. Now I am revisiting those dreams and putting time and energy into them. And becoming more disciplined and focused and making progress. My advice? Keep going. Don’t wait for someone to say “great idea, go for it.“ Just go do it. 

@Kelly Claiborne for me it’s timing, not ‘if’ I will buy but ‘when’ and ‘what’ (defining the strategy). We are in escrow on our primary residence single family home and are then relocating to a new city and state (from Los Angeles to Columbus Ohio) to reduce debt and stress and to have more quality time as a family. We bought our house four years ago and saw nice appreciation so our goals are to get a new single family home for us, pay off a couple debts, build up our emergency fund, THEN invest.

I'm looking into 2-4 unit Multifamily properties in Dayton Ohio and other places. Goal is to buy places for 50-80k that rent for a combined 1k or more. Also I would say it's a challenge of knowing the kind of strategy that will work best for me. ‘Don't know until you try' but with many options (BRRR, buy and hold, flip, land, REIT's, stocks) it's a bit overwhelming.

@Dan DiFilippo very helpful insight from the property manager perspective based on your experience. Part of my fear is they tenant will get very angry and might damage the place or try to sue (even if it’s not legitimate but to tie up the property). Have you encountered that? I’m also concerned about the vacancy time, thinking it might take 1-2 months to rent and making sure I have enough reserves to cover that. Especially in this COVID19 world...

@Daniel Haberkost wow. Small amount of money but big jump in rents. It pays to do the work yourself! I’m still new to this so I’m trying to understand the financials and buying strategy... house was 200k and afternoon 10k in rehab it’s renting for 1,600, but it’s still under the 1% rule... how do you decide for yourself if something is worth investing in?

@Remington Lyman speaking of the investor realtor whose info has really helped me! Those numbers are good to know. Makes me think having a property management company handle tenant issues... that’s the reality of some much upside potential’ in these listings. Will be rare for current tenants to really like a new owner that raises rents a lot really fast to make money... makes me think property management is the way to go... Less money in my pocket but fewer headaches too...

@Bjorn Ahlblad that seems like a much safer way to go than making a ‘curb offer.’ But here it’s rare to NOT see a ‘curb offers only’ requirement

@Matt Jones yes to seeing lots of deals! It’s been helpful to read a weekly digest of properties an investor-realtor who I met here on BP sends out. He does a nice analysis with rent comps and his take on the property. Lots of deals don’t work out but sometimes a gem comes along. Sounds like you are essentially flipping the property, just waiting about a year instead of selling immediately. Why not hold onto it for a few years before selling? Just to get the cash out and keep doing other deals?

@David Wandel ooh ok. Basing offers on current rents. In Columbus seems like too much demand where prices are much higher than the 1% rule, like 250k properties that rent for 1,100 per month. Why would I buy that property? And also seems like sellers are basing list prices off of projected rents with future increases, not current rates.

@Steve K. That’s helpful to know the process/one way to go about it. ‘Hi I’m the new owner and I plan to make your place nicer... it will cost x amour more per moth when the work is done, if you want to stay that’s great but if it won’t work out I understand’