All Forum Posts by: Michael Ehmann

@Nick Hundertmark, I only put 5% down, so it will be a while before I'll be able to pull some of the equity out. I love the location and quality of my condo (which makes it easy to find tenants) and that the househacking covers most of the cost, but if I could go back in time, I probably would have gone the SFH route. The HOA fees and rent restrictions are pretty big downsides. It's like a 3-4 year waitlist to be able to rent the condo out as a pure investment, so I'll probably sell before it gets to this point. I wish I had the option to buy a new personal home next year and keep my current home as a pure investment property. Hindsight's 20/20, but at least I learned some good lessons from it, even if it wasn't the best investment decision.

@Denny Faircloth, nice to meet you - just shot you a private message.

@Nick Hundertmark, I'm in a similar career stage as you. I graduated December 2015 and started working fulltime that summer. I bought my first personal residence in May of this year by house-hacking a condo (bought a 2 bedroom and added on a 3rd bedroom, allowing the roommates to cover the mortgage, leaving me with a few hundred $$/month in HOA fees - not a perfect setup but better than the $1000 I was dropping in rent each month previously).

I'm now looking to add my first pure investment property to my portfolio. Financing is the biggest hurdle for me because most of the savings I had went into my downpayment, so I'm rebuilding now. Most likely for my first deal I will partner with a family member or coworker who can help with the financing piece.

But yeah, ATL is a pretty hot market now from what I understand, which presents its own challenges, too. Naturally, a lot of things are getting overpriced in certain areas, especially intown. From the deals I've been looking at, I've had better luck looking on the North side, closer to the 'burbs. There are a lot of cheaper properties in South Atlanta, which is pretty rough right now in some parts but is getting revitalized.

Nice work! How did you find your partner? What do you both uniquely bring to the table, and how to you divide responsibilities?

Make sure you listen to the podcast episode 257 from a few weeks ago if you haven't already. A main focus of the podcast is investing at a distance.

Sohrab Ansari , I agree: BRRRR is a great strategy and is awesome to find because it can help minimize the cash required to make the deal happen. But I think while you're searching for a BRRRR you could also search for a buy and hold. If time is your issue and you're just getting started, a buy and hold with minimal rehab might actually be an easier way to get started, unless you have an experienced partner to help with the "rehab" R portion of BRRRR. Point being: if you have $150K in liquid assets, you could drop $30-$40k (or less) as 20% down on a buy and hold SFH property to at least get started. Then you still have PLENTY of free cash when you do find a BRRRR that works for you (only you'll already have another property and some experience under your belt, so you'll be in a better place than if the BRRRR was your first deal). I think it's fine to be shooting for a BRRRR, but you should also be looking for SFH and multi family buy and hold deals.

At the end of the day, you've got to just pull the trigger. With your capital, you could easily throw down on several SFHs in many markets (paying straight cash if you want to) or put 20% down on a multi family. A lot of people advise on going straight to multi family if you can. It's about the same level of effort as doing a SFH, sometimes even easier. At the end of the day, if you just want to get started, you could take $50K or $100K and just do something. Worst case scenario, you make a mediocre decision and still have most of your capital for your next investment. And then at this point, you will have more experience to do an even better job. And if you make a mediocre decision, then at some point you can always offload the property and put that money in something else. Don't take a bad deal for the sake of taking a deal, but you could easily find something worth pulling the trigger on in the next 1-2 months. Think of it like going to lunch: do you overthink about whether you're going to get Mexican, Thai, a sandwich, Italian? No because lunch is a temporary, low-risk decision. If you pick something and aren't super happy with it, then you'll make a better decision for lunch tomorrow. You don't have to worry about making the most perfect, most well-analyzed decision of where to eat. You put some thought into it, pick a place, and just go for it.

If you have $150K and a portfolio, lender, you don't HAVE to do BRRRR...at least for your first deal. It's better to do something that's not a BRRRR than to keep waiting for a BRRRR without action. You could also explore starting with a SFH or the multi-family route. Go to some REIA meetings and network with people in your area. Your situation could be a great match for someone with experience but needs help with financing. 50% of a deal is better than 100% of no deal.

Yep like everyone else has been saying: put down as little as possible (3.5% FHA or 5% conventional if you can), house hack if possible to eliminate your own mortgage payment and get some experience managing tenants, and use the rest for your next property. If you're just graduating, you're ahead of the curve so congrats on that.

@Ron Quinn, check out the podcast episode 257 (last week's) if you have not already. Mid-episode, they discuss turnkey providers. @Matt K. hit the nail on the head: if time is your major issue but you have lots of $$$, turnkey might make sense. But if you have the time to do everything yourself, it can be a lot more lucrative (albeit more work) because you aren't giving the turnkey provider a cut of the margin to do everything for you.