All Forum Posts by: Michael K Gallagher

@Ryan A. Congrats on jumping in and welcome! I totally relate to the stress of not wanting to be over-leveraged.  What I've found is that if you start small and bite off a couple little chunks and let yourself get comfortable you'll feel better and better about adding properties.  I think a great option for you guys starting out is a house hack!  either a duplex, or even triplex or up to a quad.  This 1, allows you to get some rental income form the other units, 2, allows you to dip you toe into property management slowly and gradually, and 3, gives you some street credit with the banks to get further loans down the road.  

With regards to your "extra" 7500 a month. If it were me, I'd find a really nice well rehabbed duplex, that you don't have to worry about making a bunch of repairs on. Now these won't probably have the best looking short term returns because you will have paid a premium in most cases because it's already rehabbed. But that premium is worth the ease of operation if you aren't having to replace a roof for 15 years, or put in a new HVAC system or electric panel. But move into that Duplex ( or tri or quad whatever is the best option for you) put down the 20% so you don't have to mess around with PMI or anything, and then just take that 7500 extra a month after you have your reserves built up and dump that into an extra principal payment on that duplex. Get that thing paid off and cash-flowing like crazy and then either rinse and repeat, or at that point find a nice "forever" home for yourself and your family and let the cashflow from the duplex pay for that mortgage.

I think you'll find after you get into it and do it yourself, you'll know what questions to ask and what you are looking for and will feel more comfortable looking out of state. I'd keep that in the back of your mind because taking costal money and putting it into midwest REI is a killer way to grow your portfolio...just to give you an idea theres a property I'm looking at, on the MLS for 98K, already been nicely rehabbed, so with about $25K all in you could buy a cute little Single family, rent it out for 1200/mnth all day long, and after all expenses, clear about $450 bucks a month. My long rambling point is get comfortable locally, and then start looking elsewhere where your money will go further, if you want to grow.

@Remington Lyman We are in South of Main, or as I'm trying to get it to catch on...SOMA...haha, we are on Lilley ave. I'm pretty sure we are not far from @Zeke Liston duplex on E Mound.  

@Joel Owens fantastic information and strategy.  I feel like everyone talks about how you get more and more clients and more and more deals, but what a fantastic point to bring up the quality of those clients and the quality of those deals.  I love the idea of screening clients for quality, and making them "apply" for lack of better terms.  It sets a good expectation of professionalism and seriousness for both parties.

Thanks again.

@Rene Lanthron is the best in the biz for Columbus OH area.  @Trevor Aydelott give her a call if you're looking in the Cbus area.  She used to be a commercial property manager, and hustles....hard!  Her guidance on finding our Duplex was huge, and that deal ended up being a huge mess because of our financing, and she was a major reason that we even made it to the closing table.    

Just have the 1 unit, but they paid on the 1st just like every other month.  Luckily they both work in healthcare so have not had any disruption to their income.  

@Tom Vanderlinden don't worry about deals falling through, especially if it didn't appraise.  Just stay consistent, if you are looking for deals, review deals, 1 a day, 5 a day, whatever works for you.  But I'd say to start with one, and track it, and stay consistent.

At 1 a day, thats 365 deals looked at in a year.  If you make an offer on 10% of those, thats 36.5 offers, and if you get 5% of those offers accepted thats 1.8 deals a year.

I'm personally curious to see what happens in the next 3-5 years with commercial spaces.  Is this forced "remote" workforce going to finally show companies that they don't need to hold or lease huge amounts of office space to keep their teams productive.  Will but curious to watch what happens when leases in the next year or so come due.  

Hey @Account Closed welcome, and very impressive that you are getting into this so early. I'm jealous.

Now I am not a flipper, so take this with a grain of salt....this is more just how I'd personally look at the situation with the info you've given above.  

- are you doing the work yourself?  If so how experienced are you/how involved is the repair?  If the repairs are things you do all the time and are comfortable with then thats great but if this is the first time you are working on a house I'd build a hefty cushion into your budget for errors and mess-ups.

- If you are using a contractor, consider it your job to manage them, document everything in great detail that you want done and expect, and hold them accountable.  There are tons of great articles on BP about how to handle and make the experience go smoother with contractors.   Might also be a great place to connect with an impeccable contractor in your area.     

- Don't forget to plan for taxes coming out of your profits.

- Have a plan B exit strategy....if the house doesn't sell or won't sell for how much you'd like what then?  Are you able to put a renter in it and will it cashflow?  

- Don't get so fixated on the profit, this is your first one, its probably going to go sideways, if you break even I'd consider it a win.  Think more about what you are going to learn and how it will help you in the long run.  And then if you make a profit thats the icing on the cake. 

- Don't be afraid to bring in an experience partner in your area.  Perhaps there is a flipper in the area that would advise you, or help you make connections or maybe just helps you see a solution you wouldn't have seen yourself....and bring them in on equity in the deal so they have skin in the game.

Good Luck! and keep us updated on how the project goes!     

@Andrew M. First of all both having W2 Jobs will for sure help securing traditional mortgages. I believe traditional personal mortgages top out at 10 doors? don't quote me on that but there is a limit, as I understand, on how many "traditional mortgages" you can get. However, don't let that deter you. As we talk about all the time on BP small local banks are a huge partner for REI like you. So in the beginning years I'd be looking at building relationships with the local credit union etc.

If I understand correctly you are looking to invest with Turnkey Providers?  If thats the case one of the best providers in the country is "Memphis Invest" so if you have not heard their BP podcasts I highly suggest it.  If you are going to be investing turnkey, you really want to understand what you are looking at, and looking for when buying from a provider.  There are obviously some amazingly honorable and well managed providers out there, but there are also some really sketchy ones.....cough cough....Clayton Morris...cough cough.  So I'd encourage you to find a provider that shares your values and goals to make sure you'll be aligned.  

Not knowing too many details about your market, your cashflow goals seem reasonable and well thought out.  Other cities or markets that you may want to look at are Cleveland, Columbus, Indy, really any decent sized mid west city seems to be a great place to get some long term decent cashflow and appreciation.  

If you are interested in Columbus I'm happy to talk specifics, numbers, details, locations etc, but thats about the only location I'd have any hard data on.   
  

@Ronnie Huckaby Welcome! As a a manufacturing engineer, and by no means an I a REI expert, I can tell you that with your education and thought process you are already about 10 steps ahead of most people when it comes to the analytics side of this biz. I think two super ground breaking books for me as an engineer is #1 "the one thing" by Garry Keller. Totally makes you see that this is really "just that simple" if you run the numbers, run the models and stay focused. And then obviously if you have not read "rich dad poor dad" it's a must!

Good luck!