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in Real Estate Investing, Series: Getting Started in Real Estate · August 28, 2021

Our Real Estate Buying Criteria and Why it is Important to Set Your Own

In my post, “How to Prepare to Buy Your First Rental Investment Property”, I mentioned that FOCUS is key when it comes to investing in real estate.

There are so many property options and paths you can choose from. This is the reason why many people, like myself, get stuck in analysis paralysis and delay getting started in real estate investing.

It is important to educate yourself and learn what your options are, but pick one that most calls to you and focus on that. Don’t get sidetracked looking into every possibility. Because all you need is to get that first investment property. Once you take that first big step, you either hate it or love it.

If you hate it, then you did it and can move on with life. If you love it, you’d be looking for the next deal right after. I hate to be cliché, but “just do it” fits right in.

Now back to our buying criteria. Every investor will have a different strategy based on their needs and wants. Your investment strategy can be whatever you want it to be.

The short version of our strategy is:

We invest small multi-family or single-family rental property in the Conyers/Macon area built after the year 1950 with a purchase price under $150,000 and that is rented or can be rented for at least 1% of the purchase price. Ideally, multi-units would be 2BD+ and single-family homes 3BD+.

While that’s our focus, it doesn’t mean we completely ignore other opportunities. It just means that we prioritize the properties that fit into our strategy.

There are additional financial metrics built into our strategy and I have an upcoming post dedicated to rental property analysis, so we will deep dive later.

You don’t need all the fancy metrics and goals to invest in real estate. My dad is a simple man and he can’t be bothered with complex calculations. He doesn’t know terms like “Cash-on-Cash return or 1% Rule” and he doesn’t want to or need to know these. Whenever he sees a deal he likes, I run the numbers for him, and a lot of times, we arrive at the same conclusion.

All he does is scroll through Zillow or Trulia for properties that meet his criteria. My dad’s rental criteria is focused on fixer-upper rental properties that he can fix himself. Because my dad is handy, he can save a lot of money on rehab costs which in turn increases his return. My experience with the Big Horn rehab taught me that DIY rehabs are not for me. I still like fixer-uppers, but I prefer to hire out the work so I need to add the cost of hiring someone to the cost of the property.

Setting up your search

Here is what my Zillow search looks like. I know realtors hate Zillow, but I love it! No one can convince me otherwise.

As I mentioned above, our target markets are Conyers (the city we live) and Macon GA, and the surrounding 3 cities. You will notice that I have multiple saved searches for the same city. The difference is in the filtered options. Some searches are more narrowed down than others. For example, I have a search for multi-family. Another search for single-family and a search without a price range.

I also have “For Rent” searches so that I can see what the appetite for rentals is in the area. This also helps me figure out the estimated rental price and the price paid for those rental properties. When you do this, you may find that investment properties in the market you are looking at were mostly fixer-uppers or that the market is not rentable. Some neighborhoods are just not renter-friendly. This is why research is key.

How we arrived at our strategy 

Our buying criteria have changed quite a lot since we started investing. As we become more experienced and move along in our journey, our goals evolve. The focus of our strategy may also change with the financial means available. If we have limited credit capacity or limited cash, we may opt-out for smaller deals and lower prices.

Initially, we wanted to keep our investments local so that we could manage them closely, but as the housing around us became unavailable we had to shift and adjust.

Before I decide to invest in a particular city or market, I do my homework to make sure that the available inventory aligns with our investment strategy.

I decided on Macon because after doing some research, it came up as one of the fastest-growing cities in Georgia.

This city has a reputation for lack of quality tenants, high crime, and houses with severe deferred maintenance. There are a lot of abandoned property and many areas of the city are not being maintained. However, there is a lot of construction and investor activity that caught my attention.

In my days as a property manager, I always worked with investors that focused on buying fixer-uppers in developing areas. This has been the foundation for my strategy as well. When we bought the Florida Duplexes, they were not in a very good area, but it was a prime location because the city itself was going through major growth. Due to COVID, growth somehow accelerated and we sold these at a premium.

We are in the real estate game for the long run, so we are not in any rush. We buy strategically and we wait.

Strategy changes

When we started investing in 2019, we only wanted to buy multi-units (duplexes and quadplexes). However, when we got our first single-family in Miami, Florida, we decided to include single-family homes (SFH) into our investment strategy. Here is why we like SFH: a lot of maintenance items can be transferred over to the tenants. For example, landscaping service, all utilities, minor repairs, up-keeping of common areas.

In our experience, renters of apartments are needier than those renting a single-family home. When we moved to Georgia we targeted mostly single-family while also keeping an eye out for small multi-units that have separate meters (tenants pay for all utilities) and are low maintenance.

What I do like about multi-family is that you can grow your portfolio faster. This is why you see I have two searches. One for multi-family and another one for single-family.

As of right now, we have one fourplex and 7 single-family homes for a total of 11 units. We are not actively searching for properties, but still keeping an eye out for the one. You never know! A lot of these properties I bought when I was “not on the hunt”. The thing about having a set strategy is that when a property that perfectly aligns with your strategy becomes available, it becomes a must-have so you use up all your creativity to make it happen.

For now, we are sticking with long-term rentals, but eventually will want to do a flip to see if it’s something we would want to do more of. At a later point, we also want to buy a condo in Cartagena, Colombia that would be an AirBnb investment and vacation home. When we retire, we are considering of living outside the US a few months a year to keep costs low and thought Cartagena would be the perfect spot.

Quick recap

I hope you found this post helpful. A few takeaways.

  • Focus is key
  • Having a strategy is a must
  • Your strategy doesn’t need to be complicated
  • You don’t need a masters in financial analysis to invest in real estate
  • Studying the market you want to invest is important
  • Align your market with your investment strategy for exponential returns
  • Be on the hunt even when you are not

Action Items

It’s your turn, what do you want your strategy to be? Have no idea? Go to Zillow and pick any city, then just start looking at the listings.

Do a google search: “Best cities to invest near me” then go to Zillow and search for properties for sale based on your google search.

Look for houses that have been in the market for a long time. A lot of times the houses no one wants are the best investments.

Zillow gives you an estimate of your mortgage payment and rents price estimate. You could also do a Zillow search for “For Rent” instead of for sale so that you can see what type of houses are renting, the price they sold for, how much they rent for, and also the type of renovations applicable to the market.

Then when you are ready, come back and fill the blanks in the statement below.

I want to invest in (type of property. ex: single-family, Airbnb rental, etc) located in (city) that is within (price range) and rent for  (if applicable, amount needed to cover mortgage and expenses) located in or near (park, schools, growing city, downtown). Preferable is (renovated/fixer-upper/low maintenance). My renters are (high-income earners, families, low-income, middle class, single, student)

You can add the number of bedrooms. If your target renters are families, you may want 2+Bedrooms and 2+Bath or if your renters are students, a 1 bedroom located near the school would be best.

Having a specific strategy in mind also helps you become more motivated because you remove layers of uncertainty and have something to look for. I have a friend who is working towards a goal of buying an investment cabin in the woods that she can Airbnb. It started as an idea that she has narrowed down to a specific goal.

Thank you for reading! Keep an eye out for the next post of this series! Next up is on the series is: analyzing rental properties. If you haven’t already, be sure to subscribe to blog post notifications so you don’t miss out.

If you like this post, let me know by giving me a ❤️.

Also, let me know if there is anything else you would want me to discuss in a later post.

This post may contain affiliate links. I may get commissions for purchases made through links in this blog.

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New Blog Post 🚨 In this week’s blog post I am New Blog Post 🚨 In this week’s blog post I am going over why we bought a short-term rental, our experience so far. Plus what we did prior, during and after purchasing our first short-term rental in March 2022, a Cabin in Blue Ridge, GA.

Check it out at www.beyondjustnumbers.com or link in bio @beyondjustnumbers
I can’t stress this enough. Some investors are l I can’t stress this enough. Some investors are looking to make money from day one, but that’s not always the case. It wasn’t for us and I’ve talked to a lot of rookie investors who have told me “Thank God I have my personal finance situation together.” 

This is just my opinion. Do you agree? Let me know in the comments!

Want to join a free community of like-minded individuals? Join our REI Coffee Chat Community where we talk real estate investing, personal finance and financial freedom, and much more! Link in bio @beyondjustnumbers

Want to learn more about investing in real estate? Read my blog www.beyondjustnumbers.com

#realestateinvesting #realestateinvestor #creativefinancing #investmentproperty #buyrealestate #firemovement #debtfreejourney #financialindependenceretireearly #rentalproperty #investinginproperty #personalfinanceblog #wealthbuilding #planforretirement #investorlife #livefree #airbnb #moneyisfreedom #enjoythejourney #reicommunity #realestateinvestments #shortermrentals #cashflow #realestate
I used to think that investing in real estate was I used to think that investing in real estate was for the rich. I became in love with real estate while working for a real estate investment company that owned hundreds of units. This was back in 2011 and I was 20 years old at the time. I had less than 5 years permanently living the US, so I had no idea about anything. I grew up in Colombia and the only talk of money we ever had was the lack of it. 

The investors I worked for were a wealthy family, so naturally, I thought… Real Estate requires wealth. I don’t have wealth. Therefore, I cannot invest. 

I figured… well shit, I need become wealthy so I can invest in real estate. Eventually, after educating myself I realized how wrong I had it. You can build wealth BY INVESTING in real estate.

Took me a couple of years to figure it all out. Hence, why I didn’t start investing until 2019. I wish I had figured out earlier, but it is what it is. In just 3 years of investing in real estate, I was able to accumulate more wealth than I ever thought possible. 

Just to give you an idea…Did you know you could invest in real estate with as little at 3.5% of the purchase price? For a $150,000, that’s only $5,750. Buy a duplex that needs a little bit of work, fix it up, rent one side and live in the other. This will reduce your monthly expenses significantly, save the money and do it all over again.*

Of course it’s not that simple, but it’s also not that difficult. There are some particular steps and considerations which is  why I recommend doing further reading on the subject. 

Book Recommendation:
✅“The House Hacking Strategy” by Craig Curelop and ✅“Investing in Real Estate with No (and Low) Money Down” by Brandon Turner. 

#realestate #realestateinvesting
🚨 New Blog Post! Continuing the “Getting Star 🚨 New Blog Post! Continuing the “Getting Started in Real Estate Series” 

You’ve found a property either on your own or through a realtor, you’ve run your numbers, you’ve got a lender and now you are ready to make an offer. What’s next?

In this post I want to discuss a few items:

✅Key components of a real estate contract
✅How do you make a compelling offer to ensure you get the property you want
✅The main contract contingencies and how they work
✅Communicating with your realtor

I also provide real examples of what we have done personally. 

Check it out at www.beyondjustnumbers.com

Let me know what you think!
If I listed all of the hats, I’d never end 😂. If I listed all of the hats, I’d never end 😂. Anyone else? Show me the multiple hats you wear and tag me. Let’s have fun with some reels.

Trying to get good at the real game like @investinginyourwealth. How did I do?
The fact that you are not where you want to be doe The fact that you are not where you want to be doesn’t mean you won’t get there. Greatness takes time. Focus on what you control.

And remember, it’s okay to pivot.

#mindset #realestate #firemovement #realestateinvesting #realestateinvestor #rentalpropertyinvestor #rentalproperty #cashflow #motivation #financialfreedom #financialindependence #financialindependenceretireearly
We see a lot of advice around hiring a real estate We see a lot of advice around hiring a real estate friendly CPA. However, when you look up  CPAs that specialize in real estate, they can be pricey.  However, that doesn’t mean that other CPAs or tax professionals aren’t good. They might not be particularly aware of certain items, but they can research and collaborate with theirs peers. Perhaps it may require you to do a little of work to compensate. Things you can do:
✅ listen to The Real Estate CPA podcast or join the Facebook group
✅follow social media accounts of the pricey Real Estate CPA and take notes of what they are saying
✅attend free educational events 
✅read BiggerPocket book on Real Estate taxes 
✅if you know anyone working with a really good Real Estate CPA firm, ask them what they are doing

Then use that to go your CPA or tax professional and be like “Hey, is this something we can do for me?” They’ll probably say, “Let me look into it”. 

If they are good, they are going to research it and/or ask their CPA peer group. (CPAs and tax preparers also have Facebook groups where they collaborate with each other).

Here is a piece of advice, if they tell you “No, we can’t use this loophole or no, you don’t qualify to use this strategy” —> Ask WHY and “How can I qualify in the future?.” This way you confirm they did their homework and aren’t just being lazy. Don’t just take no for an answer. You can then get a second opinion by asking a question in a forum or to your peers.

So don’t panic if you don’t have a real estate CPA or tax professional. 

Next video I’ll be answering the question… “Can I skip the tax professional altogether and do my own taxes?”

#realestate
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