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EXECUTION My Real Estate Progress Thread

Discussion in 'Progress/Execution Threads' started by RayAndré, Feb 23, 2018.

  1. RayAndré
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    RayAndré Dare to differ. Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    OK let me give an update here. I'm just over a week away from returning to the US and thus getting much closer to getting serious about where I'm going to live. And here's what I'm thinking:

    Miami is expensive, *highly* competitive with foreign money, and possibly going to be underwater in the decades to come...so I've decided its not be the best place to get started.

    Thinking back to advice from @Ungodly - "Go somewhere cheap and start f*cking up" and @Envision - "head to the midwest and build an empire" (because its cheap), there are two other markets that are at the top of my list. Pittsburgh and Tampa. While in Miami I'll be visiting these cities to 1) get a feel for the place / if I'd like living there, and 2) connect with local real estate agents / investors. I have a good opportunity for mentorship in Pittsburgh so its currently #1. Though I think I'll enjoy life in Tampa better...so we'll see.

    But both are cheap markets with potential, and if the real estate market is going to go south soon (other threads on the forum are talking about this), then I should be in a decent spot to move there, start learning, and be prepared for to start my empire when we hit the bottom.
     
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  2. WJK
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    WJK Gold Contributor Speedway Pass

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    We're going to have big shake-ups in the apartment markets and the single-family house markets over the next 4 or 5 years. This is all due to the tax changes. It's going to take a while to become a trend, but the rumbles are already starting. What segment of the RE market are you now thinking about plowing into?
     
  3. RayAndré
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    RayAndré Dare to differ. Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    @WJK I haven't definitively solidified that. Growing into commercial multi unit is the long-term investment goal. The short term business goal is flipping SFH to build more cash to pipe into more investments. Flipping/rehabbing residential MFH could be interesting too, down the line.
    If I'm able to get a flipping business running to a point where I don't have to be present, having a vacation rental somewhere I could live off-season, and rent out during high season, is also appealing. Essentially "house hacking" a vacation rental.
     
    Last edited: Jul 20, 2018
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  4. WJK
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    WJK Gold Contributor Speedway Pass

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    That's interesting. I'm a hands-on person when it comes to spending my money. I make sure I'm always present. Stuff happens more often when I'm not front and center.
    But, the vacation rental is possible in my thinking as long as you rent it during the peak season. Your success will depend on your management company and specifically the agent who handles it. Some are great. Some aren't worth having. I would spend all the income on paying down my mortgage nut -- if it isn't paid off. A few condos in the same complex would make a good base and they would be easier to manage.
     
  5. RayAndré
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    Understandable, and I know I'll be that way too, at least to start. But, at least for me, the goal is to have something where I don't have to be present.

    Why focus on paying down the mortgage instead of reinvesting the profits?
     
  6. WJK
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    WJK Gold Contributor Speedway Pass

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    Paying down the mortgage is a form of "reinvesting the profits" -- I have been through 5 business cycles during my years in RE (1976 to present). OPM (other people's money) sounds really sexy until there is a major downturn or disaster.
    I like to sleep at night. I don't want to end up in bankruptcy court. I've watched too many things happen to the people around me. And I have had some those moments myself over the years. I'd rather go slower and have some breathing room, rather than dancing on the razor's edge.
     
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  7. RayAndré
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    Hm, knowing I want to remain "nomadic" maybe I should focus in on the short-term vacation rentals. Overall it sounds more appealing to me than long term. At least for now. And I'm the type of guy that would like to offer my place to friends / family. (Can't do that with long term tenants in place.)

    But is Tampa the best place to get started? (Thought to self: Do I even need to start in the "best" place (probably not) or is it better to just choose and get going?)
    Time to research...
     
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  8. WJK
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    Anywhere that people with money vacation is an excellent place to own vacation rentals. The less seasonal, the better. A place that has both a summer season and a winter season is ideal. A year-around season is the dream vacation rental situation.

    The key to making it a success is who you chose as your manager. They generally have the cleaning crew, support staffing, and marketing contacts. The best managers with the top, moneyed clients only take on well located, prime properties in stellar condition.

    I would start by interviewing managers that I would consider hiring. They can point you to the right markets and neighborhoods. You need to know how to get the most bang for your buck.

    What features, furnishings and layouts bring the most significant returns? What level of vacation rentals do you have in mind?

    At the top end, it's easy to spend obscene amounts on the furnishings, appliances, and landscaping. The best of these vacation rentals sometimes come with the option to have domestic staffing provided during the vacation. You'd better have deep pockets to do it right. The real money part of this business is not for wimps and also-rans.
     
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  9. Excalibur
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    You're one of the few people I have seen that think that way. I also agree. I bought my 1st property and paid it off in 3 1/2 years. Bought a 2nd on a 30 year note to allow breathing room, with intentions to pay off under 5. Perhaps not fast lane, but I am comfortable with my pace.
     
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  10. RayAndré
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    RayAndré Dare to differ. Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    Ok, its a little embarrassing that I left this progress thread untouched for months, then someone else finds it :happy:

    @Excalibur sounds like you've had some good success with your purchases! Very nice.

    There is definitely a balance between speed and risk. I'm starting to toe the line on the risky side of things ;)


    Progress Update
    Last time I posted, I was in the Short Term Rental mindset.

    But this is TFF, and the goal is to ride the FASTlane. The goal isn't cashflow, but value-add. Not buy and hold, but "fix and flip" (add value and sell).

    Flipping single family houses is one route I was considering for a while, but my ambition is driving me towards commercial multi family.

    So I've been learning that :) I recently enrolled in a 2-week bootcamp about MF investing and learned a TON, and now also have a network of other students and existing investors to tap in to.

    Talk on TFF about real estate / the market, people are saying they're not buying right now. It seems I decided to invest when we happen to be at the top of the market...so I'll slow my roll and not be in a rush.

    The plan: move to Tampa and rent. Keep an eye on residential MF properties and if a good deal comes along, buy it with a low down payment. Keep practicing / learning commercial MF underwriting and other skills so when a good deal arises I can move on it.
     
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  11. WJK
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    WJK Gold Contributor Speedway Pass

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    Slow, careful pacing, wins the race. I have friends who have 70%-80% LTVs (loan-to-value-ratios) on their apartment buildings. That makes me cringe. I'll be debt free within the next couple of years. I'm with you. I like my breathing room. Equity, coupled with cash flow, is king.
    Here's an example. My car was damaged in wind storm yesterday. It's a minor annoyance rather than a major financial disaster. The body shop is picking the car up in an hour. What does that have to do with my real estate business? Everything. I don't have worry about paying my part of the bill for the car because my RE cash flow is there to pick up the tab. IF I was strung out with high RE payments, I'd be sitting here stressing. Financial woes affect every part of your life. The possible future gains are not worth the worry of surviving the present.
     
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  12. WJK
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    WJK Gold Contributor Speedway Pass

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    Cash is king. So is time. You must have the cash, and you must be able to move quickly. A small down payment is not equal to having the cash available -- unless it's a signature credit line that covers the whole purchase. Conventional financing takes too long, and it loses good deals. Successful investors look for "stud-card" deals that they close as fast as the title work comes in. My best ones take less than a week to close. The only thing that takes a long time is to locate the next deal.
    Good luck!
     
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