Novice investor looking to begin

General Real Estate Investing
21

Emperor,

I’m going to try to not buy anything this year because I’ve already exceeded my goal and now want to get everything stabilized so that I can evaluate whether to continue buying or stop with what I have.

My purpose in getting into the rental property business was NOT to take over the world. I do not want to be the next Donald Trump or to become filthy rich. How much is enough? (that could be a topic all by itself) My purpose is to find that sweet spot where I can do what I want, when I want, and have enough money to do so. Right now I work on average 12-16 hours each week and yet still have enough money to enjoy my lifestyle (of course, I would always like more) and have the toys I want. If I buy too many properties, I’ll need to work more. I could hire a property manager and hire paid maintenance, but then I would need double the number of rentals to have the same spendable income and would have absolutely nothing to do (which is not good).

I need to take some time off from buying rentals to stabilize the business so that I can accurately evaluate my position. When you are building a business, it is not stable. In other words, as I acquire rentals, I am spending money to do the initial rehabs and cycling through the inherited tenants - therefore the cashflow stream is not stable. In this business building phase, the cash flow is always lacking what it will be once things are stabilized. I am right now buying 10 more rentals and it will take about 6 months to really get everything stabilized (units rehabbed, tenants rung-out, everything the way I want it).

So, my goal for this year is to get everything stabilized and see if I’m done. The difficulty is that buying rentals is addicting and we are in a great economy for buying! Just 10 minutes ago, I got a call from someone that wanted to sell me their house. Fortunately, it wasn’t a good deal and therefore I wasn’t tempted.

Mike

22

Mike,

I wonder if we are ever really done. In 1998, I got where you say you want to be. I have never bought property every year, but since I supposedly “retired” I bought one property in 1999, two properties in 2001, one property in 2003, six in 2006, and just one this year. Next year I will make some deeply discounted offers on REO properties.

Although I have been financially independent for some time, I still keep my hand in the game more or less as a hobby.

23
I wonder if we are ever really done. In 1998, I got where you say you want to be. I have never bought property every year, but since I supposedly "retired" I bought one property in 1999, two properties in 2001, one property in 2003, six in 2006, and just one this year. Next year I will make some deeply discounted offers on REO properties.

Dave,

That sounds like an excellent plan and a pace I could enjoy. I’m sure that I’m going to be tempted in 2008, but I’m going to try to be disciplined and get everything stabilized before I buy anything else. Then, maybe doing some as a hobby will be fun. Of course, managing all those tenants will still give me plenty to do.

Mike