Been pretty heavily researching getting into the real estate market as an investor. I'd like to buy a rental property or two, do some minor rehab and rent them out (monthly/annually, Airbnb seems a little too aggressive for starting out).

Looking primarily at Galveston and Spring with Galveston being preferred.

I've got my home paid for free and clear and about $70k in a brokerage account I can liquidate to fund a purchase.

Robert Kiyosaki would call you a fool for buying now unless very experienced as your chances of getting a good deal in this market is tough.

Jason Hartman believes buying blue collar housing is still a great play because 30yr debt at todays rates is a great hedge against inflation and that once the economy turns your average 3/2 in a working class hood will be a very hot rental as people move from larger homes they don't want to pay for.

Those two are our favorite and my wife and I are still in the market for a duplex or larger home in a tertiary market of San Antonio that we can house hack and I always encourage anyone starting out to consider a small multifamily house hack. Every edge you can give yourself in this market should be taken advantage of imo.

If your current primary home has an opportunity to be a rental, really consider that and find a 2-4 door deal you can house hack as your next purchase. If it's has a value add component even better. Also, don't discount the STR game 100%, it's very easy to get started.

Tough one. We started back in 2015 when sales prices were considerably lower. Where we are, properties have gone up but rents are fairly stagnant due to our fairly rural location & no big paying jobs. Galveston is different in those regards, but it would concern me a bit because of hurricane/flood insurance - that might be something to research further.

We just turned one property into an Airbnb to test that. We are testing it thru the holidays but not sure how the rest of the year will go. Having to pay all utilities, internet, etc. even with a higher nightly rate vs what we could get for a years lease with none of those expenses is something we have to weigh. Right now, we have to rent it at least 10-12 days a month to be where we'd be with a standard lease. That's before summer hits & they have the thermostat on 60. Not sure it's our best use of that house, but we'll see. Plus the front end of furnishings, linens, etc. was a bit heftier than we thought it would be. We might go short term, furnished lease on it if this doesn't work out. Then have a big garage sale if that doesn't & go back to standard 1 year leasing. I will say that just keeping track of reservations, etc. is kinda a hassle & we've had people caught in lies about number of guests, etc. The airbnb site is not super intuitive & you really have to search to contact them.

I didn't mean my post to be discouraging, hope it doesn't come across that way. You're on the right path, keep going and you'll get there. If that's a property soon or later doesn't matter.

I've noticed a number of VRBOs that I've used in the past now appear to be long-term rentals, with the calendars blocked off for a year or longer.

In fact, I was the first guest at a new-to-market VRBO recently and before I could even submit a review, I heard from the owner that she had secured a long-term tenant.

Not sure if this is a real trend or a coincidence. But I find it interesting.

The best time to buy real estate is yesterday. The second best time is today.

I hold 2 properties in a blue collar area myself, and I hold 4 more with a couple buddies. I refinanced my first two this year, so I maintain 25%+ equity in each of them, and I am cash flowing $1,300 collectively.

There are still deals to be had!!

Two of the other four are currently under contract. We are buying 2 homes for $208,000. We will put $40,000 in each, and their after repair value will be $355,000 collectively. However, we plan to rent them at $1,700 and $1,450 per month.

There are a lot of different strategies, and what you are referencing is the BRRRR method (buy, rehab, rent, refinance, repeat). In this method, you are making money on your investment in 5 different ways:

• Equity Capture - Buying a home for less than it is worth.
• Principal Pay Down - Someone else wants to pay your mortgage, leading to more equity at no cost.
• Cash Flow - Income. An investment property should be an income-producing asset.
• Appreciation - Real estate values double (roughly) every 20 years.
• Tax Advantages - Depreciation deductions,1031 exchanges and more...

If you haven't, I would suggest researching the BRRRR more on Bigger Pockets, and I am happy to share more of my thoughts.

At the end of the day, you get to buy an income-producing asset at $0.25 on the $1.00, and you get to keep 100% of the income it produces immediately.

Regarding financing, there are several ways you can go with it in your situation, and it really depends on what you're comfortable with. I have used hard money lenders and private equity (which I refi into a conventional loan upon lease), and I've used a line of credit as well.

BRRRR Sauce:

https://www.biggerpockets.com/guides/brrrr-method

Where's the guy that was on here a few weeks ago telling us how successful he was without understanding cap rates and their impact to valuations?

Been reading up hard on BRRRR. I'm a little more conservative on my first deal I think. Something local to me I can buy and hold.

Dill-Ag13 said:

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Been reading up hard on BRRRR. I'm a little more conservative on my first deal I think. Something local to me I can buy and hold.

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I think it is right to be conservative, but not just on your first deal. Find the numbers that make you feel good about your investments and make those numbers happen - say no to deals or negotiate to get to where you want to be.

Be conservative, but don't be fearful. Your first investment property may not be the windfall you want or expect, but it is an education. Those cost time and money.

I live in Houston. My properties are in Brazoria County - close enough to make me feel comfortable and far enough to force me not to become a handyman.

I like the BRRRR method for holds. I like the large initial equity capture. The method gets you refinanced and locked into a conventional loan. Once you're there, you can decide if you'd like to do it again.

There's some minutia that are good steps in doing the BRRRR. I'm not a total expert, but I'm happy to share other tips to avoid pitfalls from my experiences.

grizzo said:

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Two of the other four are currently under contract. We are buying 2 homes for $208,000. We will put $40,000 in each, and their after repair value will be $355,000 collectively. However, we plan to rent them at $1,700 and $1,450 per month.

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So all in you're looking at ~300k on purchase and rehab, refinance at 70% of ARV gives you a new loan balance of ~250k so after refinance you're out of pocket 50k? Assuming all cash initially? Rough numbers obviously

Pretty good rough numbers there, but the $80k isn't out of pocket. Will send the details of our financing when I get back to town, but I want a deal to hit at 22-24% cash-on-cash return (the annual cash flow / cash I put into a deal) with a minimum of $450 cash flow per property. These numbers are getting harder and harder to hit, but it can be done!

With $70k in liquid funds, you are very close to the min to getting into most RE syndicated investments.

We locked up 7 contracts last week.

I have an 8 plex in Amarillo for 350k walking distance from downtown. I'll assign it for 10k and do the loan on it.

If you want to know more email corey@gbtpm.com

TikkaShooter said:

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With $70k in liquid funds, you are very close to the min to getting into most RE syndicated investments.

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Tell me more...

Shoot me an email and I can give more info on why we chose that path

Screen name at yahoo email

Syndicated real estate investment can be over simplified by stating there are a group (syndication) of investors pooling their capital to invest in a larger asset (oftentimes multi-family). There is typically a "lead" investor or group organizing the capital raise as well as the asset improvement and management.

In short, it is often the same model as a BRRR at a much larger level, and the investors - like Tikka - are passive investors in the deal. It's a great strategy...very appealing. My partners and I just got involved in our first syndicated multi-family deal in July.

Tikka - Would love for you to share a snapshot on a deal in which you're participating!

itsyourboypookie said:

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We locked up 7 contracts last week.

I have an 8 plex in Amarillo for 350k walking distance from downtown. I'll assign it for 10k and do the loan on it.

If you want to know more email corey@gbtpm.com

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email sent

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Tikka - Would love for you to share a snapshot on a deal in which you're participating!

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I might start a new thread for that.

But to your description - on point.

We chose a group out of Texas that had a track record of success and knew what their sweet spot was.

Our goal in this was to do one in 2021, and if we like the communication, the timelines of the tax paperwork, etc...then look at doing another in 22 or 23, and so on and so forth. Basically, laddering our investments over a decade to allow for a laddered retirement.

I'm interested in this as well. I'd appreciate any info you can share.

www.lifestylesunlimited.com.

SF & MF mentoring group in their 31st year. Sold my home in 2020 & took $150K & became passive owner in over 500 apt doors. Cash on cash return over 8% ytd.

Good luck! They offer free workshops.

Thanks everyone, if anyone here has experience analyzing single family and multi-family deals and wants to check my math on a couple I have found I would appreciate it.

Dill-Ag13 said:

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Thanks everyone, if anyone here has experience analyzing single family and multi-family deals and wants to check my math on a couple I have found I would appreciate it.

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Message me. I'll take a look. I have more experience with SF, but I've underwritten MF in the past as well.

I can't PM but my email is my profile

Our current plan has a couple of steps to grow our income in order to re-invest in multifamily syndication as a general partner. I have over 20 years of residential, commercial and industrial construction project management experience up to $20mm annual budgets, 7 years of 1-4 residential investing and believe I can be a strong team member on a value add deal. I intend to focus on meeting more active syndicators over the next year. In the perfect scenario I find a GP looking to lead their first deal as principal and needing construction experience.

I have a back of the napkin understanding of underwriting but definitely need help on that front. I've looked at several programs from Lifestyles, Sumrok and Wheelbarrow Profits but I've been unwilling to part with low to mid five figure sums to join. I do believe these programs have value, but I also believe I have enough experience to be of value to a team right now. That said, if that's what it takes to get me moving then that's what Ill do. We recently went to a Lifestyle's case study. It was awesome to be in a room with 20 or so of the members who raised their hands when the presenter asked how many people became millionaires through the program.

I highly recommend anyone who's interested in multifamily syndication to check out both The Real Estate Guys Radio and The Old Capital Podcast . The former has a lot of interesting guests and puts on some cool seminars like The Secret to Successful Syndications . The latter is higher level discussions of markets, financing and deals. It may sound like a foreign language at first but it has absolutely helped my understanding of syndication deals. Both are very high on mentorship and in fact Old Capital regularly has both LU and Sumrok members tell their success stories.

Question for those already in the space. Are you a member of or did you use a mentorship program? If so, which and do you mind sharing your experience.

Thanks Tikka, grizzo and, itsyourboypookie for the help and guidance. Love TexAgs

mwp02ag said:

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Question for those already in the space. Are you a member of or did you use a mentorship program? If so, which and do you mind sharing your experience.

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I am a LU member. My wife & I decided we wanted the "hand-holding" as she called it to learn how to grow passive income via SF or MF. That is what you pay for in a sense that you take classes to get certified as a passive investor so you can participate in deals that follow SEC guidelines. Everyone who gets involved has access to a mentor. Folks wanting to be leads must undertake a training program, costs a few pennies, but it valuable. They do a really good job of protecting the passive investor, that is whaqt all their guidelines are built around.

I understand the investment you make for the mentorship part is a bit of a shock. I had a neighbor who got in many moons ago & was hugely successful. He told me to write the check & don't look back. I did it at Xmas time b/c there were offering an extra year.

As I said above, they're in their 31st year & continue to grow.

Regarding LU...

I'm simply not interested in a place where a percentage of my money goes to marketing, advertisement, and running a radio show disguised as "advise".

I'm sure folks have made money with LU, but I just dont get the feels goods from LU folks.

Just my take, and its worth exactly what ya paid for it. Nada darn thing.

Isn't LU an MLM?

Hey thanks Ronnie, I appreciate the response. I think there are three levels of membership. They are offering a two year entry level (not sure what they call it) membership for $297 right now. I assume I am not going to be able to jump into a GP role from that level, but it does seem like the best way to meet more people in the GP role.

Thanks Tikka, I appreciate your response. Did you attend any live events or is this just a gut feeling? No offense, I just really want to understand your perspective. I am absolutely committed to becoming a GP and eventual Lead and I do believe these programs can help. I need the most help with meeting others in the industry, that's the hard part.

I can see why you would think that but they aren't sending new members out to find other people to join up under them to my knowledge. It's a pay for access club of investors who have a ton of hand holding for new investors. They have both passive and active tracks for learning and the mentors have specific and active investments in the types of deals your looking at. IE if you want to do SFR you are going to get a mentor who does SFR.

They appear to have a clear cut method for learning investing and getting into those circles can be hugely valuable for someone looking to start out or to make a jump to syndications. I mean I would gladly pay the biggest membership if I knew I was going to get into a deal over the next 12 months. I've been saying I wanted to become a syndicator for three years now and haven't really made any progress on my own yet.

Quote:

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Did you attend any live events or is this just a gut feeling?

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No, I've attended no events. But from what I know, through conversation with others, membership fees are in the tens of thousands.

Why?

Why do I need to pay $10,000 or $20,000 to get access?

When I could instead put that money towards an investment, not a membership.

"But access" doesn't do it for me. Not in today's world of youtube and podcasts and forums and unlimited access to information.

That old "pay for membership, be part of the club" business model is dead. I mean obviously its not, but it should be. Instead, I'd rather do my own leg work regarding a group or sponsor, and get to make an investment call without paying up from membership fees.

Thanks man. I obviously have the same hesitations, but after three years or so without any action it's becoming more attractive to me. If I wanted to keep doing small multi's I would never consider it, I have that down with our current business model.

I want to go faster. In fact I need to go faster. I need bonus depreciation to offset income. Im not yet committed to a program, just leaning that way. I really did enjoy the case study I attended, if for no other reason than my wife finally understanding what I've been preaching about MF syndication after hearing it from someone other than me.

Why not just a google search for large MF RE syndication groups in Texas ?

Send an e-mail to every one of em.

The ones that respond in a timely manner, set up a call. Ask all the questions.

Set up follow up calls to your top 2 or 3.

Then pick one, ask to be on their e-mail list when the announce another MF investment opportunity, and have your money ready.

I'm not sure Im understanding what LU offers that you can't get yourself. Maybe I'm missing some component of this, but you want to go faster = want to take on bigger chunks = spend more, yes?