I invest in real estate. A newbie. AMA.

Feb 9 909 Comments

Just transferred 250k cash from selling stocks to my bank to close on 8 apartments. And I have never seen 10k with my own eyes. It kinda feels surreal. Came long way from living on $30 a month to this.

I am no pro. Doing real estate for about five years. Have ten, working on eight more. Planning get to at least fifty units total in next five years. I dont believe in the FIRE bullshit because I think thats a lifestyle I dont want and a myth. I like building systems and I will keep doing it as long as I like. Work and family gives me purpose. But I do plan to make enough money from real estate so that I dont need a paycheck. And that day doesnt look far.

AMA if you are into real estate and dont know how or where to start. I know there are pros on blind. I am no match to them.

TC: Oracle pays me enough. Dont give a shit about fang prestige.

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TOP 909 Comments
  • Lockheed Martin DrJohn
    Any info you would be willing to share on your current holdings? City/suburb? SFH? ROI? Any info to help us who are new to the game. Thanks!
    Feb 9 34
    • Oracle fG3ds
      OP
      Investment properties always have higher rate than primary. You could lie and get a lower rate but that’s a federal offense.
      Feb 12
    • NVIDIA kud0$bl1nd
      Amazon - Roofstock.com no personal experience but they are what the industry calls 'turnkey' providers. Have had some folks invest in them and they've had mixed experience. Most common complaint is the areas where they buy properties and the lack of communication after your warranty expires. Another thing is that their return projections are unrealistically high.

      SonicWall - always be honest with lenders, the appraiser will see you don't live there and report to the bank anyways

      Adobe - Good questions but they're a bit detailed to answer in the thread. DM me. Happy to help
      Feb 13
  • Verizon Media Igpay02
    Long way for a humblebrag.
    Feb 9 2
    • Oracle fG3ds
      OP
      Yes it is.
      Feb 9
    • Amazon fjr37a
      What was humble about it?
      Feb 10
  • Nutanix hapyNutant
    Do you physically visit the property before investing or do it online? How much additional time do you have to give for management or maintenance/repairs? Do you consider this passive (still working for oracle) or active investment? Do you use any realtor for guidance or do it yourself?
    Feb 9 9
    • Prosper / Eng trAd00
      Dwight Schrute spotted!
      Feb 10
    • Adobe FEiX41
      Roofstock makes their money when they sell an asset to you. They make money referring you to their loan brokers, they collect a fee from you when you close, and they pad the price of the asset by x thousands of dollars. It’s an extremely expensive way to source property and they’re motivated to get you to sign.
      A local Real Estate agent is also motivated to get you to sign but isn’t inflating the cost of the house before showing you the deal or tacking on other bullshit fees. There’s a lot of upfront work in making sure that the numbers truly work and that the inspection report pans out. Going through Roofstock doesn’t mean that you get to skip this work – you just end up paying someone else a lot more.
      Feb 10
  • Intel UpiDawg
    Do you use a property manager? How much liability insurance do you carry?
    Feb 9 14
    • Amazon gDVc56
      Would be interesting to see the cost breakdown, but since you have so many, moving it to the LLC is really for liability protection anyways and you should do it
      Feb 10
    • Amazon fjr37a
      An LLC is dirt cheap to establish. It’s like 100 bucks in the right state
      Feb 10
  • Oracle fG3ds
    OP
    Best part, I pay zero taxes on my income from this.
    Feb 9 18
    • “You have to do it full time to use your passive losses to offset your active income.”

      That to me sounds like OP wouldn’t have been able to offset his income from Oracle?
      So how does OP make it work???
      Feb 12
    • Disney minnie m
      Op pays 0 taxes on cash flow from RE. Op pays taxes on income from Oracle. Op has to reclaim depreciation or 1031 when he sells - which he doesn’t plan to sell.
      Feb 12
  • Apple xkcde
    Instead of providing a TC you made a statement about not giving shit about faang and oracle paying enough? Why do you think so?
    Feb 9 7
    • Oracle fG3ds
      OP
      On a tangent, you need a team to succeed. My wife is crucial for my success even though she is a homemaker. I consider 50% of our money hers.

      And kids give a purpose like no other.
      Feb 9
    • Intel BqxT28
      OP can you recommend areas to buy quad or dup to start with?
      Feb 10
  • Google Cl☁️ud
    Lots of questions. I'm trying to start too. Thanks for doing this ama.

    1. How do you evaluate properties: cash-on-cash return? Cap rate? If there a specific number/% for either you look for?

    2. How did you find the team of people in Georgia & Florida you can rely on?

    3. If you don't mind, can you share example zip in these states to look at for analysis?

    4. who all does your team consist of besides realtor & property manager?

    5. How much do you pay down vs mortgage on these properties?

    6. Did you have to rehab any of the properties you bought before they could be rented? How did your calculate those cost before purchasing?

    7. How did you settle on GA & FL as places to invest in?

    8. Did you visit these places before buying the properties?

    9. Would you mind mentoring someone like me to get started?

    As you'll guess from my questions, I've done some research on biggerpockets already, but in very early stages.
    Feb 9 10
    • Ericsson / Mgmt
      noname2018

      Ericsson Mgmt

      PRE
      Nokia, T-Mobile
      noname2018more
      Can you advise please if it's better to stick with duplex and personal morgage or make sense to go with commercial loan with more units?
      Feb 12
    • Oracle fG3ds
      OP
      Start small.
      Feb 12
  • Microsoft Kxyr86
    I'm a few millions in real estate at the age of 30. If anything I should have done an AMA.

    You have A LONG road ahead of you, let me start there.
    Feb 11 31
    • Microsoft Kxyr86
      I never buy homes partially renovated or renovated at all. What are you hiding by renovating only one bathroom or half the kitchen? Also, how would I ever make one congruent style if I don't like the way you partially remodeled? I don't like renovated homes because you should never trust someone else's work here. If it was renovated before sale RED FLAG. if it was partially renovated and someone clearly lived there for a while, maybe they just wanted a project. But still was it done right?
      Feb 13
    • Microsoft Kxyr86
      If basement is exposed, is there leaking? If no basement, is there a possibility to add one? There's lots of little things you will acquire over time and looking at homes or buying them.
      Feb 13
  • Liberty Mutual Insurance rgos2779
    Great convo thread so far. A warning & rough checklist.

    I’ve made millions off real estate with a modest salary (200 TC) in a 7 year span, could retire, but i like the challenge & extra cash from working.

    When you buy and rent property there are many factors. Do your homework to maximize your chance of success.

    Know your...

    Market
    Market outlook
    Rents
    Local laws
    Lease reviewed by a lawyer
    Strong lease addendum
    Eviction cost / plan (it happens)
    Tax
    Tax deduction rules
    A good accountant to keep you out of trouble
    Decision to borrow as an LLC or not
    Costs
    Renovation plans / permits / town approvals, etc.
    Maintenance costs
    Maintenance plan with handyman, plumber, electrician, etc.
    Capital improvement plan if applicable
    Buying costs
    Selling costs
    Recognizing agents win when they make a sale ($$), not when you make a good buy. I’m sorry, but most agents show and help close and are often great people, but they provide limited investment advice.
    Mortgage shopping (3-4 quotes)
    Factors on when to Refinance
    Target rent to expense ratio
    Calculations that take all your info and show you a strong outcome.

    The list goes on, but I think I covered the big ones. These are DIFFERENT for every market. Comments here may not apply to your market. If you read this and we’re intimidated, get motivated or proceed with caution. If you read this list and we’re motivated, you’re likely to do well, I wish you success in this great industry.

    Cheers
    Feb 10 0
  • Microsoft Xpbw42
    Could you share your journey from start to this point? Biggest learnings along the way? How do you manage risk, given most markets are at high price levels?
    Feb 9 11
    • Salesforce / Eng Boza
      Read The Snowball.
      Feb 10
    • Oracle fG3ds
      OP
      Intelligent investor by Benjamin Graham.
      Feb 10

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