All Forum Posts by: Tanner Sortillo

@Tanner Sortillo

Some great advice in here!

I work with investors here in the valley, and always take a big picture view at what they have going on outside of RE investments as well. 

We typically start by setting up a strategy that will maximize the tax benefits available to them so that they can continue investing/growing after the first initial purchase. 

I typically talk less about the market conditions until we have a general plan in place, and then we discover what may work best with the current climate (rates, fear, opportunity, demand, etc..)

Hi Tanner-

Great question! You are working with a new investor who has $100K to get started with real estate investing. You asked what would be the approach you recommended and where to recommend they start.

If it were an expensive area like Phoenix, I would recommend they buy a house they could live in for 2 years that would cashflow as a rental after that and move on to the next house and do the same thing. Stacking rental houses every two years using the equity built up for the next downpayment each time--ideally with duplexes.

Alternatively, they could look at a market like Lansing, MI where you can buy a duplex for around $140,000 where one side pays the expenses including the property manager and the other side is mostly profit. Buy two of those well and in a year or two get HELOCs on each and do it again.

To Your Success!

Man it was a steal, got it off market from another local agent I work with that knows I buy, used Avalon Capital's hard money loan which is 100% purchase/100% Rehab. I bought it at 60% of the ARV and it was a 22K rehab. Then paid the Hard Money points using my commission and $5,000 in concessions. Guess you can say its an anomaly but good deals are out there!

Hey Tanner - 

This right here is the $1,000,000 question! Hard to say without knowing the full backstory of your client and what their goals are. I work with a ton of investors, and part of that means helping to identify with them what their goals are, what their risk tolerance is, and what they want this to look like long term. The main thing is understanding how does real estate fit into their entire financial picutre - do they want it to be a part of it? Or do they want it to become THE picture for their finances. 

Here's a hot list of things I'd want to understand, and based on this, there are tons of different avenues he can go. 
- what is his short and long term goal with real estate investing? Cash flow? Building net worth? Building capital? 
- How active does he want to be in the business? Does he have time to devote 10+ hours a week? Does he want something more on autopilot that is more like 1 hour a week? 
- Does he plan to keep his existing income stream, or would the goal of real estate be to significantly supplement that income? 
- What is his risk tolerance? 

There's tons of different ways this can go.... if he is someone that doesn't NEED the passive income, I would recommend multi-fam property w/ 25% down in a strong B or better neighborhood where he can at least break even and focus on a market with strong appreciation and rent growth. overtime, his cash flow will increase, and his net worth on paper will grow significantly. 

If he is looking for cash flow, than the focus will be more on identifying neighborhoods / markets that have cash flow without too much risk to focus on that. 

If he has tons of time on his hands and wants to get his hands dirty, flipping could be an option as well, with a combination of his money + private money. 

Hope this helps. 

Hello @Tanner Sortillo,

They could look at picking up two properties instead of just one—maybe a new construction alongside a turnkey property. This way, they can diversify their investments and spread out the risk a bit.

If they’re ready to jump in now, they might find some solid deals before the new year. 

Please feel free to reach out if you have any questions.

@Tanner Sortillo The number one answer is it depends on the investors goals.

How active does the investor want to be?

What returns is the investor looking for?

What is the timeline of that return?

Answers to these will get you the answer to next steps.

Man! $100K can get you so many properties with leverage in Memphis TN! I bought a deal 2 months ago with $1100 out of my pocket and I am in the middle of the refi now! Happy to connect if your interested in Memphis TN!

With 100k, I would heavily on investing in midwest markets. Prices are lower, many markets are cash flow positive, and the appreciation has been strong. I've built a 9 door portfolio there and I'm happy with my investments. Happy to connect and share details or help answer any questions.

Look into a house hack. Its how I got started and allows you to buy low down 5-10% on a 2-4 unit. Great way to start!