All Forum Posts by: Kelley Ogletree

I have to second what @Jaron Walling said. My first thought when reading your post was 'wait a minute, that's an income of $9k a month and only $750 to invest' ????

Now your personal finances are none of my business...... however you asked so I'm asking back.

In order to get into this business successfully, you need to make some sacrifices...pull back all non-vital spending and put $4k a month into your RE career. That's $50k a year, and will give you some powerful tools to buy what you want....

Just my .02

I would recommend the BRRRR method. Buy one property per child, you can do this every 6 months and let them inherit it and pass it on to their kids and generations to come. You will build generational wealth with just 10 properties!

@Kelley Ogletree hello:)  

One thing I thing missing in the replies is that there are so many ways to invest in RE. There are many opinions on BP about this but I'm also a mom and have been investing for over two decades.

I'd look into the pros and cons of STRs in the areas you think would be good to invest. Familiarize yourself with local rules. For instance, some condo associations don't allow STRs. Or some municipalities allow them but only if they are your primary residence and only for 50% of the calendar year. And keep in mind these rules can change. Also, some people don't like the constant turnover of running a STR or uncertainty of the booking sites. Get more clear on what and why you want to do this. What are you and your son good at?

Building up cash reserves seems key. I'd leverage the cash you have and your son's credit to either flip or BRRRR. There are many methods that will become more popular again as the market slows where you can buy on terms (instead of using your own cash and credit) like L/Os, seller financing, and sub to. But keep in mind, success in investing means doing your due diligence and buying right. One thing I see missing from most people using BRRRR is the lack of consideration or even wrong assumption that "the real estate market always goes up." So not true. If you buy at the top of a market and it starts to decline while you are rehabbing, so you are putting money into an asset declining in value, you lost. You may not be able to refinance or even rent for what you have in. Buy at a discount, like a 20% discount - the cost of repairs and holding costs.

Once you have more cash, you'll be able to leverage more. But many private lenders will lend to you with your income and credit being below average. After a deal or two, you can decide if you want to keep flipping or build up your STR portfolio. Or a combo? Maybe become a private money lender or passive investor in syndicates? Like I said, there are so many ways to invest in RE. Go get ‘em momma!

When investors first start out, they are "baby investors."  Now, some have tons of time but no money or experience, some have money but no time.  You fall in the ladder camp but they fact that your son is interested is gold.  

Happy to chat I cover KC and STL area. I would utilize your equity in your home. Could either be a down payment or a cash purchase. I would look at your budget/spending, you need to be able to set more aside to save. With making 100K+ you should be able to stash away 1-2K per month at a minimum. Things break in homes and $750 being set aside a month does not cover much on repairs(you'll have $$ from rent but at the start you need a bigger nest egg)

I'm going to come from another direction. No offense but where is your money going?... You're making roughly 3X what I make at my 9-5 and I've been able to invest (in some capacity) since I was 25 years old. 

If you have money + equity you have a big head start like @Kerry Noble Jr mentioned. Learn how to find/buy/create a deal, utilize family or a partner, and buy a rental property. STR yield high returns but come with high risk. What's your risk tolerance? Maybe a cash-flowing rental (12 month leases) on a fixed rate makes more sense. St. Louis is a great market and prices are good; probably comparable to Indianapolis. It depends on your market research and what kind of strategy attracts you. I said "strategy" because focusing one can be the fastest way to grow. Go down the rabbit hole, fixate on it, and learn enough to be dangerous. DON'T let others sell you on something. 

I started my REI journey with $30K, zero knowledge, and no equity.

 Hey Kelley,

If your end goal is cashflow you're going to want your mid-term goal to be finding ways to leverage up to get that cashflow. Your and your son's owner-occupied loans are going to be the best ways to maximize your leverage. That being said this option comes with higher monthly payments and some form of mortgage insurance which takes away from your bottom line. The sweet spot is to go 5-10% down on a conventional loan to be able to get PMI removed once you hit 20%. The goal being to get to 20% by prepaying to get the monthly payment down. This is a great option for people with low liquidity.

Since you have access to equity you could consider pulling that out with a HELOC to put as a down payment on something as an investment property.

You can consider investing with your son in a house-hack if he's willing to manage it and split the cash flow. You could also consider putting 20% down on something that you intend to STR.

Regardless if which way you go your goal should be to maximize the cashflow of the property and minimize the impact it will have on your DTI so that you can go on to the next deal sooner.

You could also consider doing a BRRRR using hard money to leverage up through the renovation. Refi it once you've got a tenant in place to pull your cash out to go on to the next deal. You'll want to make sure you have backup subs for each trade to make sure that your project goes smoothly. Time is money right now.

Hope all that help give you some direction.

Best of luck!

If I was in that situation, I'd partner with your son if he wants to do this with you. If he is first time homebuyer he'll have programs with lower money down. Might look into a multi-family for cash flow. You'll have your HELOC you can use for rehab or reserves and you can save 9k a year with your W2 salary. I personally do BRRRR with single family homes and buy the house with my wife since she has good credit. I started with traditional bank loans but will look to use hard money loans to buy and rehab with little capital to start and refinance to get money back while still cash flowing. I just started as well and my first goal was to build a good team of agents and contractors in my area. Look for REIA groups on facebook and try to attend meetings to network. Good Luck!

You sound like my mom.......with the exception of a couple things....but very similar.......

I have excellent credit but my mom has the income and a free and clear home.....

I would say partner with your son and build your empire together......STL is a great cashflowing market.......the cashflow will help you retire and enjoy the rest of your life but it will give a foundation to your son and your future grands......just my opinion