Here is a post I found on BiggerPockets this week. It was really helpful so I thought I’d share it. It is from an investor named Alex M. from Pennsylvania. He is talking about the best advice he has ever been given regarding real estate.
It’s been way too long since I last posted on here. I’ve been really slammed with my day job, kids, life, etc, but have also managed to keep myself busy picking up a few more units, and am about to close on units 8, 9 and 10 on Thur of this coming week!
For all the newbies out there (which still includes me) who are wondering how to do this, I wanted to quickly reflect on what I believe was the single best piece of advice I have received from anyone in regards to how to get into this game the right way.
About a year and a half ago, I posted (about the first investment property that I had just gotten under contract, but was questioning if I should go through with it. I was looking for the “right” way to get started, and was not sure this would be it. What I got back in response was the following:
“You have the inclination and the funds to do a deal now. Do it. If you talk yourself out of this one you may find it much easier to talk yourself out of the next one. There will always be better deals but there will also be competition for those deals. You may search a long time for that 4-plex and if you find it you may not be able to lock it up. Unicorns are elusive“.
Moving forward with this one deal may not have got me the FHA 4-plex that I thought was the best way to get going, but it turned out to mean so much more. Highlights have included the following:
- Financing fell through and I found a private lender to keep the deal alive
- Bought it for 66k, put about 15k in, rent for $1200/month and refinanced in December for an appraised value of $120k to pay off my private loan and lock in a low rate
- Partnered with the private lender to form an LLC and bought two more properties – rented one and am finishing rehab on the other. Will refinance to pull cash out soon.
- In January I finally found and closed on my FHA 4-plex. 3 apartments and 1 commercial space on a commercial corridor in an up-and-coming neighborhood in Philly.
- On Thur I am closing on 3 more single family rentals, for units 8, 9 and 10!!! …two are rentable almost as is, and 1 I will gut rehab. All will be cash purchases and then refinance out. …something about getting to the number of 10 makes this whole thing seem “official”.
So… the lesson I learned, Jump in. Not blindly – definitely use BP to get advice, assistance, guidance, etc – but don’t sit on the sidelines and wait for the “perfect” deal. Once you are in the game, things start to come together. For me I am in year 2 of my investing career and will have 10 units – plus a lot of equity in my own home. Also, I’ve put very little of my own money into any of these deals – using private money, FHA, and a partnership to get to where I am now. I did not know that this was how it was going to work out, but based on the advice above, I kept putting one foot in front of another and this is where it has taken me so far. Really looking forward to taking this to the next level of this coming year!