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SHOW NOTES FOR EPISODE 356: ASK BILL! GETTING STARTED IN REI, CASH FLOW NOW, CHEAP MULTIS, REI CPAS AND FLIPPING
This is our regular Fun Fact Friday “Ask Bill!” episode, where Bill answers specific real estate investing questions received during the month from e-mails, in-person conversations, phone calls or through online portals such as BiggerPockets.com and Quora.com. In today’s episode, Bill answers questions on How to Get Started in Real Estate Investing, REI for Cash Flow, Where to Buy Cheap Multifamily Properties, Good REI CPAs and Good Flipping Resources.
One of our goals here at the Old Dawg’s REI Network is to help to educate and encourage fellow real estate investors, to share what little knowledge we have by answering your questions, and to help other investors to broaden their understanding of real estate investing and to, hopefully, avoid some of the mistakes that can cost you later.
Question #1 – How to Get Started in Real Estate Investing
Hi Bill,
Saw you on Biggerpockets a while ago , Your real estate business is something I want to do, I will be 62 this December and thinking of retiring from my job with NYC transit 23 years , not sure if this is a good move because then I would not be able to get a bank to help me purchase anything . This is my dilemma I don’t know how to go about this , I never owned a house before , don’t know if I should retire , have money put away savings and other sources . Im looking for help in what I can do.
I know i’m throwing a lot out to you , believe me I been putting off this message to you for the longest time . Trying to keep this message as short as possible, I appreciate any advice you can offer .
Note : Interested in multi units, I have been managing my family’s 4 unit for many years.
Thank you.
Best Regards
Joe
Answer to Question #1
Joe,
Thanks for writing and for listening to my interview on BiggerPockets.
I can definitely emphasize with your situation. I was close to your age when I first started investing in real estate. Considering many various options, I found that real estate had the best possible opportunity to create wealth in a fairly short period of time. I did some research and just jumped in. In the process, I’ve learned a lot… most of it from the school of hard knocks.
Learning real estate investing is a 7 step process and it starts with 1) education (books, online blogs, podcasts, etc.). Next, you need to 2) find yourself a good mentor. By networking at REI clubs and investor meet-ups, you may be able to find that mentor. Next, with the help of your mentor, 3) put together your strategic plan. Your plan will help you clearly define your niche, what type of real estate investing you will do, and set your mission/vision, goals and objectives. Then you need to 4) take action! Buy that first property! For many this is the toughest step. But, once you take action, that’s when the real education starts. 5) Re-Education – There are now things you will learn from your practical experience as an investor. 6) Revise your plan based on what you learn through experience. Next, 7) Keep moving forward, take action, repeat and DON’T GIVE UP! I did a podcast on this very subject. For more information, you can listen to the podcast here: 006: How to Get Started in Real Estate Investing.
That’s just a overview. Without talking with you and knowing specifics about your skill sets, goals etc, it’s difficult to recommend specific steps. If you’d like to chat, just let me know and we can schedule a phone meeting. Don’t worry, I don’t charge anything.
Best,
bill
Question #2 – Believing in Real Estate for Cash Flow
Bill,
So glad I found your site. I’m over 50 and my finances took a major hit during the recession and I’m just now getting my income back up to where I was in late 30’s when I purchased my first rental, which unfortunately I had to sell in 2011. But I’m a real estate broker and believe in the power of real estate and believe as I get older its about cash flow as I do not have 20-30 years for stocks to provide income when and if I ever retired.
Thanks for the site.
James
Answer to Question #2
James,
Thank you for your kind words about the Old Dawg’s REI Network. I’m glad we have been a good resource for you.
I believe in investing in the stock market but I, like you have acknowledge, recognize that it takes time and is a higher risk than real estate.
Real Estate is clearly the best way to generate significant cash flow quickly. Here’s a great example:
- As a real estate investor, you may choose to invest in short-term housing. AirBNB actually provides an opportunity for you to start generating monthly income without even having to purchase properties (See podcast episode #355 – How to Make Big Money on AirBNB Without Owning a Single Property.
- I have done great with AirBNB and am expanding my efforts in that area.
- You can also do wholesaling and flipping to generate cash quickly
I hope that helps
Best,
Bill
Question #3 – Finding Inexpensive Multifamily Properties in the U.S.
Hi, I just moved to the States from Italy and started following your blog. Obviously I’m all new to the US real estate market and need to do a lot of research. But I just read “How to Get a 25% Annual Return on a Real Estate Investment” which is an article from 2016 where you make an example of a four-plex costing 50K and an 8 unit apartment costing 100K., and I just couldn’t help but ask – are these prices still realistic today in 2019 in neighbourhoods worth investing? In Italy 100K would get you a 1 bd apt if you are shooting for a place with population / job growth, etc.
I suppose prices have gone up in the last 3 years and I’m wondering how much a four-plex / 8 unit apt goes for nowadays in a neighbourhood worth investing in.
Thanks in advance for the response!
Maggie
Answer to Question #3
Maggie,
Sorry I’m so late in responding to your email. Thank you for following my blog. Have you also listened to our podcast?
That’s fascinating that you moved here from Italy. Although born in the USA, both of my parents are predominantly Italian. I have a lot of relatives in Northern Italy.
Regarding your question, yes, it is still possible to find properties at those prices but they may not likely be in the best shape or in the best areas. Two areas where you can find prices like today are in Cleveland and Detroit. Both are very tricky markets and you need to know people you trust and who know those markets. Here are some inexpensive multis and links to people who might be helpful
- Here is a 7 unit for $99,000 – https://www.loopnet.com/Listing/11000-Whittier-St-Detroit-MI/16746731/
- Here is a fourplex for $53,000 – http://www.smallapartmentdeals.com/property/440stantonaveakronoh/
- Here is a fourplex for $35,000 – http://www.smallapartmentdeals.com/property/214w12thstandersonin/
- James Wise was on my show, knows Cleveland, and has lots of affordable mutifamily deals: https://www.youtube.com/channel/UC6BTEYcwPm9kOWSKO_CIGow/videos
- Al Beahn was also on my show and knows Detroit well: http://olddawgsreinetwork.com/real-estate-investing-in-detroit/
- Lance Edwards was also on my show and specializes in inexpensive multifamily properties: http://olddawgsreinetwork.com/make-big-money-in-small-apartments/. He also has a newsletter that features inexpensive multifamily properties: http://www.smallapartmentdeals.com/property/
You can find cheap multifamily properties but you must be very cautious and work with people you trust and who know the markets well. When you buy properties that cheap, you usually have to pay some where, whether it’s in improvements, rehabs, maintenance or in finding good tenants but it is possible.
I hope that helps.
Ciao!
Bill
Question #4 – Good Real Estate Investing CPAs
Hi Bill,
Can you please recommend me to your Real estate tax accountant. My property is in GA. If you have several more recommendations I wouldn’t mind getting there info as well. My partner and I purchased 14 units late last year.
Franz
Answer to Question #4
Dear Franz,
My personal CPA is Amanda Han at Keystone- KeystoneCPA.com and 714-916-5400
Also, some great guys are Brandon Hall and Thomas Castelli. They have a great podcast called the Real Estate CPA Podcast at https://www.therealestatecpa.com and are actively working with real estate investors all over the U.S.
Also, you can check on BiggerPockets.com for good real estate investor CPAs in your local area as well.
I hope those referrals will help you get started.
Best,
Bill
Question #5 – Good Program for Estimating Flipping Projects
Bill,
What program do you recommend for estimating flip projects and balancing projects.
Thank You.
Tyler
Answer to Question #5
Tyler,
My best resource is The Book on Estimating Rehab Costs: The Investor’s Guide to Defining Your Renovation Plan, Building Your Budget, and Knowing Exactly How Much It All Costs. J. Scott, the author of that book knows more about flipping than anyone I know. Also, there’s a ton of resources at J’s website: http://www.123flip.com. Also, check-out J’s new podcast Bigger Pockets Business Podcast.
Best,
Bill
Well that’s it for today!
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