Real Estate Investment Properties

I seen we didn't have a real thread on this at all so I wanted to tap into some potential minds on the subject.
We are in the beginning steps of investing in this kind of extra income. We have started our LLC and a business account. Looking for any tips that we may not have done from people with experience, especially considering the interest rates now. We've attended a couple classes with a local realtor/broker and he's brought in a banker to break down a couple things.
We've been looking at the options to get started. Looked at HELOC's, lease purchase agreements, financing, etc. Hardest part is getting started since we don't have thousands and thousands to get started. Looking at doing single family homes for now and potentially move up/forward to multifamily and/or commercial. As of now the only debt we have is the house, but have a little over 200k in equity, so we can get about 170k for a HELOC if we decide to do it for the quick cash for a cash sale.

Again, figured I'd reach out to a bunch of people that bought some gas guzzling vehicles for financial investment advice. Also this could be used for anyone else to follow that may be considering getting into real estate. After all, I think it's about 90% of millionaires have been created through real estate. Gotta be something to it.

 

We just recently bought our first investment property is a Multifamily 3 unit building. This is right before the interest rates shot up. The only debt we have is our house and we use the HELOC to purchase, not all of it. We use about 70% from HELOC and 30% from our Saving. Want to keep some of the HELOC in reserved, to obtain another property.

As long you analyze the property and the number works, its a good deal. For us to buy the investment properties the numbers have to be about 20% ROI.

With the rates right now and the Price of the Seller want it for doesn't work realistically, every time we analyze a building. But you have to put in an offer that works for you when you analyze it. Worst thing the seller say no.

There's big tax incentives for the investors, as long you have a good CPA that knows the IRS codes, you get more back from taxes

 

right now we're leaning towards 40% ROI and estimating 95% occupancy to figure my year's worth and all. i'm in the process of finding a good CPA that is very familiar with rentals. I don't want someone thats along the lines of, "yea, i think i can do that",

 

40% ROI thats an awesome number with 95% occupancy. But make sure you factor in CAPX, Repairs, Vacany, ulities. That ROI % will come down a bit. If we didn't factor in those our ROI could've been 29%.

When we got into this game, other investors said it takes about 3-4 months to stabilize a building, they weren't kidding. So some growing pains comes with it, so don't be discourage.

 

So i didn't say it before and I apologize, but congrats on the first purchase!
cap for us and our area is to have a goal of around 7-8% and a DRC of around 1.25 MINIMUM, but we're aiming more for 1.5-2%. i know there will be some learning curves, just hoping they're not expensive ones haha.

 

Thanks.

Yes. The most important part is analyze the building and make sure that # works and get your that 40% ROI you're looking for. if it doesn't its not a good deal.

Have you heard of BiggerPocket podcast? If not recommend you watching some of the podcast.

 

Will check it out!

 

So you’ve resorted to buying buildings @Fotnot because you can’t fit all your kids in a house?

 

Gotta buy homes to rent and sell to help give them a head start.....and fund them

 

I have been a RE investor since I bought my first house when I was 23. Owning rental RE has been a great investment for us and the income now supports our life style. I'm in CA so with all the laws in the tenants favor I recommend professional property management, professional management will also keep rents current while Mom and Pops rentals tend to lag when it comes to annual rental increases. With professional management you can still do repairs yourself, have your property manager just tell the tenants you are a handyman. Don't become friends with tenants as they will try and take advantage of the RICH landlord-it's a business and should be run as such.

 

I plan on not letting anyone know I own the property. It will be under my LLC, which doesn't have my name or wife's name in it