All Forum Posts by: Rick Petersen

 Absolutely no reason I needed to start that large; I have received such great coaching and information from the community here just by putting a relatively bad idea out there in front of everyone ;)  

I am working now to connect with an investor-friendly agent in my area and will be looking to buy either small MFR or SFR that are within my means (ones where I have cash to cover down payment, close and any repairs while having enough set aside to cover the cost until rent). I am optimistic and I think I could close 2 properties a year without doing anything 'clever' like pulling equity out of prior homes or forced appreciation. I may still do some of that but I'm going to try to be very conservative on my first few, just do it and prove that I can before going after anything larger.

Thank you for the advice! 

 Thank you for this reply!  This is super encouraging and I love hearing from people who see opportunity here near me and not just in the market they are currently working.  

I am going to start attending a local REIA and collecting contacts with brokers while I save up. Super pumped!

Thanks again, everyone!

 Not immediately but if I had a planned investment to focus on and save for I could have 100k in 6-9 months.  

You are all awesome and I sincerely appreciate the guidance and correction, even the "what on earth are you thinking?!?" type responses help validate what I was thinking.  The reality is that I keep looking in this area (Fort Wayne specifically) and with quick back of the napkin math, literally everything fails to cashflow using the same #'s and %'s I provided in the OP.  So when I found something that looked like it could cash flow and it happened to be a lot of doors, I got excited.  Where I am today I know full well that I need to find a SF or small MF and start there; finding so few that would cash flow from the start is discouraging but makes perfect sense: if it were easy/automatic, literally everyone would do it.

May end up needing to be a separate post, but in light of everything I'm finding, at least if I'm trying to stay very local to me, it looks like there are a lot of C/D type properties that I could buy, if they have the square footage, I could invest in adding a room, doing some minor rehab, then likely be able to rent it in such a way that it cash flows.  Other than the 1-2br/1ba class C's in the rougher parts of town, there are then the nicer SF homes that have already been fixed up/staged and they look super nice but are carrying a hefty price tag where cash flowing is unlikely and there's not much value to add.

If I were to say I could bring ~$50k cash in the next 3 months to a deal, starting with the assumption that it's preferable to have my first deal fairly local and I live in Auburn, IN... Is that enough to get started well? I am very aware that I need to build my team of 4, but it feels like I should know what city first (again, options within 3 hours would be: Fort Wayne - if super-local is best to start, Chicago, Indianapolis, Cincy, Columbus, Detroit, Frankenmuth -- maybe good for STR?). I love what I saw when I visited Columbus, but to be real with everyone... the hype has me worried; in the stock market I believe in buying always but more aggressively when there is fear and I tap the breaks when there's such rampant optimism.

@Carlos Ptriawan - I appreciate the guidance and you are correct that I do not have any experience yet; as such I am certain that the property in question was outside of my means, which I've been assisted in realizing.  That said, I do have other very passive investments as you outline and that is great advice as well.  I am hoping to acquire a few properties directly as well both as an opportunity to learn and in hopes of growing it into something more... gotta get started somewhere!

@Bryan F. - Very interested in discussing what you know about the property if you'd be open to connecting more privately.  If nothing else, I would love to hear about and meet the current property manager if they do a good job as I cannot imagine that I'll never buy any property in my hometown.

Auburn, Indiana, 30m north of Fort Wayne, IN.  By "can drive to" I assume you mean quickly/often?  I do travel to Chicago, Cincy, Columbus and Indy for work often, each of those is 2-3 hr drive, so I assume I shouldn't be looking quite that far away even if those may be 'better' areas. 

I am indeed as new as new can be. Also, I'll be honest, STR is something I've not looked into at all yet; I have been very much focused on LTR. I need to do some reading on STR because my understanding is those would normally be in destination cities/areas and I'm not sure many people are headed to Fort Wayne for Spring Break... I probably am misunderstanding/misrepresenting the STR strategy out of ignorance though and I will work on fixing that with some research.

Austin, that is helpful.  This would not be all cash or self-funded; I would be able to pay a portion of the downpayment/closing but it would largely require additional capital... late at night when I posted the original, I wasn't thinking entirely clearly on the numbers but I've been assisted in seeing that there were many gaps in the idea.

I have not gone beyond just seeing it on the MLS (realtor.com) and running some of the provided numbers through the BP calculators. The seller will provide more documentation upon contact and proof of funds, so I don't have the details exactly. What was provided was $2.1mil purchase price, $212k/annually gross rent.

And finally, my team is me and I own my own primary residence, but other than a brief 1 year period where I owned my former home and rented it out while living out of state during a move, I have no experience with any of this.  I suspected that the only way this would have been a deal I could be involved in would be if the numbers were a smash hit and someone with experience and cash was willing to jump into it with me... but that's why I posted earlier that I realized in that scenario I'm bringing nothing to the table and so I realized that this particular deal would not be something for me to get involved in.

 Thank you, Bruce!  You all have helped me hone in better on the types of deals I should be looking for.