All Forum Posts by: Mike Kehoe

@Chris Orlob I have a similar background as yours but went full-time into real estate a few years ago. 

Real estate is an excellent way to diversify, grow wealth, and mitigate taxes (assuming you have passive income from your tech startups). 

Investing passively as an LP in syndications is the way to go for you. 

You should spend the extra 10-15 hours per week reaching out and networking with General Partners of multi-family, self-storage, and industrial syndications while educating yourself on how syndications work. Through networking, you'll learn a lot about the different verticals and will begin to prefer one over the others. 

I'd pick one or two operators in the vertical that you like and do some background research on them. Then, assuming the background research checks out, I'd start to educate myself on their real estate vertical. You want to know how to evaluate and underwrite deals in the vertical to understand what you're looking at and ask the right questions when an opportunity is presented to you. 

Yes, this is a lot of work upfront, but as long as you document your findings, you'll have this information for the rest of your life. Furthermore, I think that you'll find that the information learned and the people you meet will help you in your tech startups. 

After selecting the suitable GPs, evaluate their opportunities, and make your first passive investment. 

Hope this helps!

@Zackarias Aitchison my partner and I invest and wholesale in North Carolina while living out of state. My business partner lives in Napa, and I live in Chicago. Neither of us like the markets we live in from a real estate investment perspective because of the tenant-friendly laws, taxes, and migration patterns.

We researched a lot of markets before planting our flag in North Carolina. Among other resources, Neal Bawa's Best Citie's For Real Estate Investing free course on Udemy helped us analyze the different markets.

Once you find a state you're interested in, I believe in niching down to a specific MSA. So we analyzed all MSA's in North Carolina and built relationships remotely on Bigger Pockets with boots-on-the-ground experts in each MSA that piqued our interest. The experts were active SFH/small MF investors, Flippers, Property managers, and realtors.

We then spent four days in NC, visiting each MSA and getting tours from the experts we met on BP. We extracted as much of their market knowledge as possible (neighborhoods, zoning, land use opportunities, buyers, sellers, etc.) while getting a feel for the market from our perspective.

We eventually chose Raleigh-Durham as our launch MSA. PM me if you want the details on why. Our original third partner (we bought him out of our business) moved there for a year and worked full time at a property management company while being the boots-on-the-groud for us part-time.

All of the research we did up until this point was with the intent of building a single-family and small MF portfolio. However, after we solidified our market selection of Raleigh-Durham, we found it to be more competitive than expected, and we had a tough time finding a deal that met our investment fundamentals. In addition, we felt that opportunities on the MLS and those sent to us from wholesalers were too inflated and were usually sold quickly with multiple bids over ask.

Frustrated and wanting more control, we started marketing directly to sellers to see if we could find deals that made sense for our investment principles. After a few months, we found that we were really good at marketing to and speaking with sellers. However, we were getting too many opportunities to handle, so we started wholesaling them to other investors.

A year and a half after sending our first marketing campaign, we pick up a property or so per month for our portfolio, but we're almost solely focused on wholesaling. We're now getting two to three properties under contract per week and growing. We're now in two MSA's and plan to expand to other MSAs in other states soon. We have a team of seven, with three of the seven in-market.

I think you can replicate our OOS success with any investment strategy, even as a flipper. However, unless you can visit your OOS market twice per month or so, I think it's imperative to have someone with boots on the ground that is compensated for performance or is an equity partner in your business or deals. Finding the right person for either option isn't easy, but it's doable.

This has gotten too long, so reach out to me if you want my suggestions on finding the proper boots on the ground partner. On a high level, be VERY picky and kiss many frogs before you get into any partnership.

My pros of investing OOS

• Live where you want, invest where it makes sense
• Forces you to have tighter systems and processes
• Easier to scale
• Get to travel every month or so
• Easier to look from the top down
• Sharpens your communications skills

My cons of investing OOS

• Not able to be there, interacting in the market on a day to day basis
• Harder to build close relationships with partners and vendors
• Lack of visibility
• Vendor selection is harder
• Market knowledge takes longer to obtain

@Matt Lyons ahhh, good for you. I would have done the same thing if I was in a county that could get it done that quickly and inexpensively.

No way that timeline is happening in Cook county, which is extremely tenant friendly.

I always feel out cash for keys before proceeding with an eviction in Cook. It’s usually way less expensive and quicker.

My process depends on location. I invest in NC as well, and my first step there is the formal eviction process because it’s landlord friendly, quick and inexpensive.

@Matt Lyons how long did the eviction process take from the time you didn’t accept payment and how much did the whole process cost?

From the sounds of it, this tenant won't respect a text or mail reconfirming that he needs to be out by April 1st. Most likely, April 1st will come and go and you'll be in the same situation you're in today. 

The Chicago eviction process is awful. It's long and expensive. I know from experience.

Be active in your communication with this tenant. If you don't want to meet him in person, tell him that you're out of town or have something that prevents you from meeting in person and you need to talk over the phone. You need to know what you're dealing with, opposed to waiting until April 1 to find out he's not moved out. 

Text and mail is too passive. 

We find deals that fit your criteria in the Triad, North Carolina all the time. The 1%+ rule is alive and well in most of the areas! Reach out if you have questions. 

I enjoyed reading this. Congrats on the success, Axel. It's amazing what you can accomplish when you focus on one niche. 

Reach out if North Carolina ever becomes a target for you. 

Thanks for sharing!

@Colton Johnson you've got some great advice here so far. 

I agree with @Jake Wiley. Finding a niche to focus on is critical. You'll need to research many real estate investing strategies to find the one that fits with your goals and personality, but once you do, pour gasoline on the strategy that you like and forget about the others for the time being.

Connect with others that are successful in your chosen niche. Watch youtube videos and read books on the topic.

Finding a mentor can be a great way to cut the learning curve, but be careful who you choose.

Finding a niche and focusing on it will help prevent you from shiny object syndrome and shorten the time it takes to get in the game.

Riches are in the niches.

@Michael A. in addition to what @Pat Lulewicz said, we really like Burlington and Mebane, which are 25 to 40 minutes outside of Durham. You can still hit the 1% rule there. Reach out if you have any questions about those areas. Good luck! 

@Juan Montano unless you have the cash or someone in your network that will give you cash, you'll probably need to go the hard money route for at least the foreseeable future. Use hard money to build your flip portfolio so that you can leverage your experience for future, better lending options. 

In Chicago, you can use North Point Lending (I've personally used them on several deals) or Renovo, among many others. 

Aloha capital isn't based out of Chicago, but they lend across the country and have favorable terms. I've used them on projects as well. 

The most important things to focus on in your first deal are buying right and finding the right contractors.