Ok so here it is. The 9-5 is killing me. I feel everyday that I sit in a cubicle and work for the man and not myself I am losing time. I need to make a plan and I think here is the best place to do it. My goal is to own 1 home by November and 2 by February. By next summer I want to be able to be making 35-40k and move into making real estate my full time profession.
I have read many books that have helped me with time lines but they all suck. Perhaps you all could help me.
As stated in earlier posts I have credit scores of 807 and 797. I am looking for single family rentals in CT. What would be a good checklist/timeline that I can follow and move from one step to the next in this process. For example what I am looking for would look something like this:
1)find a home
2)find a broker
3)qualify for loans
4)assess home
5)buy home
etc…
Get the idea? I need to know all the steps, everything I should look for cause like I said, i can’t do the 9-5 that much more and every day that goes by I feel is a day wasted in my real estate future.
with thise credit scores you can do whtever you want! You just need to find the deals. Are you looking to stay in CT area or are you interested in partnering with people from other states. What exactly do you want to do with these homes? Buy and hold, Buy and sell.
You may want to structure a few flips in there to acquire a little cash.
If you can do one rent and hold deal then a flip, get a little cash from the sale. Buy another rent and hold unit, do another flip. It might help you feel like you are getting to your monetary goal a little quicker.
Just a thought, please don’t think I have a better plan because I don’t…
I just wanted to toss that out there.
Look for distressed property, and motivated sellers and the deals will come to you.
I have a friend that always says…
“it is not a deficiency in knowing…it is a deficiency in execution”
40k per year by summertime would require a ton of rentals, so you are probably going to need to flip some properties, or find good enough deals to pull equity out and still casflow on the rents. What price range are you looking for? Are you interested at all in an out of state partner?
If you plan on financing these properties you will have mortgage payments, you have to figure in vacancy % maintenance, management, and other misc. items. how much do plan on cashflowing per property?
I was estimating aroud 500 a month or so per home in a college town. That means I’d need 6-7 homes by summertime. I don’t think thats entirely out of reach do you?
Maybe I’d flip one or two a year as well to increase the cash flow.
Yea I have seen 180,000 dollar homes with a mortage payments with taxes of about 1100, avg rent in those homes are 3200. Pretty good I think, however I don’t know what other costs I have to factor in.
WOW! If you can get $500 per month positive cash flow, you CAN reach your goal by next summer. Here’s what to do, step by step:
Order the Carleton Sheets Course TODAY. Pay the extra for expedited shipping. Be sure to pay the full amount (not make payments) so that you’ll get all the free videos. The Carleton Sheets Course has a LOT of good info about rentals. Also, order “The Weekend Millionaire Real Estate Investing Program” by Mike Summey and Roger Dawson, which is a CD set to listen to in the car. Excellent and inexpensive. Immerse yourself in REI education.
Find out where and when your local REIA meets - do this TODAY! If there is more than one REIA within an hour’s drive - go to both. Make EVERY meeting - this must be a top priority.
Go to the bookstore and buy every REI book by Robert Allen, Robert Kyosaki, Dolf De Roos, and Mark Victor Hanson. The “One Minute Millionaire” is mandatory reading. Study like there is no tomorrow.
4 Find a motivated realtor - someone who is brand new and very hungry would be perfect. Tell her to look for “desperate sellers”. Properties that have been on the market for a long time; people getting divorced; people who own two homes; REOs; discouraged landlords; etc make excellent candidates.
Start looking at a bunch of house for sale in your target area - IN PERSON. Call every FSBO; go to every open house; make seeing houses a priority. When you’ve seen 100 houses, you’re probably done with this step. This is a CRITICAL step so that you KNOW property values. REAL investors don’t need comps or appraisals - they can tell you the value of a house just by looking at it! If you’re motivated, you should accomplish this step by October 15th. This is a lot of work, but this step separates the winners from the losers. The losers are too lazy to do this step and while they’re waiting for comps, you’ll have already taken their deal!
Line up enough cash or credit to buy your first house. CASH IS KING, so it’s best to have the money in a checking account or line of credit. Get as much as you can. Using a small, local bank is best. They have the lowest fees and can deliver what they promise. If you don’t know someone important at the bank, find out who that person is (from other investors at your REIA). Set up an appointment and go see them - IN PERSON. Personal contacts are key! Take a professional looking presentation with a cover letter, your business plan, your personal financial statement, 3 years worth of tax returns, etc. Have this DONE by October 15th!
Put an ad in the classified section of the appropriate newspaper: “Facing Foreclosure? Need Cash Quickly? We Buy Houses!”. You’ll start slowly getting calls.
Start looking at properties with your realtor. You’re looking to pay no more than 70% of market value and have a positive cash flow greater than 1/3 of mortgage payment.
Buy appropriate property with your cash.
Immediately refinance with your small local bank to get your money back (plus a little extra for fix-ups, living expenses, etc).
Repeat steps 1-10 until you have the cash flow you need.
wow thats awesome. Couple questions. If i am investing in CT and i Live in NY which REIA should i affiliate myself with?
This gives me the goal and advice that I feel I really needed. Now i know what I should be doing at every step of the way. Any other advice anyone to either add or build on what Mike has told me.
Also do you recommend property managers being that I will be out of state and have a full time job?
I have a question in regards to TOP SECRET #6, if you’re someone who does not have the credit score that JP has, what would be your next move? Aside from working on fixing the credit I mean :-\
Thanks for taking the time to respond to JP…I’m just as thankful as he probably is.
I know this is highly classified info…but this is the first time I’ve heard about the approach, (sequence), that you’ve outlined in steps 9 and 10 above.
Correct me if I’m wrong…but what you’re saying is that you walk into a deal with cold hard cash. And then obtain it’s financing “after” the deal.
I’m sure there’s some advantages and things you need to watch for in this type of strategy…is this too classified to elaborate on?
I’d join both! What’s the worse thing that could happen - you might learn too much? I don’t recommend using paid property managers, but if you don’t have a choice - you better find a good one!!! Management is critical to owning rentals - a bad manager can bankrupt you in no time!!! How far a drive is it to CT? What’s your wife or father doing?
JG,
If you credit is bad, you’re at a HUGH disadvantage. I guess the answer is to line up the best financing you can, but if you don’t have some cash or credit for a reserve, you’re in trouble.
I live about 1.5 hrs away from the desired location. My parents work full time and told me basically that if this is the direction I want to get into then its somethign I need to take on full time which I agree with.
