Re: Should I wait??? - Posted by Baltimore BirdDog
Posted by Baltimore BirdDog on April 28, 1999 at 10:18:14:
Ah…the Florida Keys. One of my favorite places in the world to visit. I used to live in Miami Beach, so I’m somewhat familiar with your area. Unfortunately, I wasn’t involved in real estate at the time, so I can’t tell you anything about property values. Several from this board probably can though. Sandy(FL) is the first to come to mind. She’s a great person to get to know. I had a brief conversation with her at the Dallas convention in March, and she’s fun and easy to talk to.
Anyway, here’s how I would address your problem…
Based on your post, it seems like you’ve studied Carleton Sheets and his buy, hold and rent strategy. Millie gives you some good advice in this regard. While this is a good strategy, I don’t think it fits your needs, at least for now and here’s why.
You want to be able to relocate as soon as possible. In order to do this, you need to free yourself from your job. In order to free yourself from your job as quickly as possible, I would start to wholesale (flip) properties in Miami (lot closer than Palm Beach; less driving time) to build up a cash reserve. Once you have a reserve of 6-12 months living expenses, you can quit your job and spend all the time you want prospecting up in Palm Beach, whether or not you take a part-time job to help pay the bills once you move there.
The number of months that you save in reserve will depend upon how confident you feel in your money making abilities. With education and encouragement from this site and some true dedication on your part, six months to your first deal is not unrealistic. I wouldn’t go any lower than six months in reserve, and twelve if you really want to be safe. Even if your monthly expenses are $2,000, assuming a conservative profit of $3,000 per flip deal would mean 8 Miami flip deals before you’d have 12 months of reserve (OK, maybe one or two more due to Uncle Sam taking his part, but you get the idea). How long will 8 deals take? If you make 20-25 offers a month as a beginner, you should do at least one a month.
Paul, your success is tied to how well you educate yourself on whatever field of real estate you choose. This site and the courses offered here are a good start. To get yourself educated on flipping properties for wholesale profit, buy Ron LeGrand’s course (either his Wholesale/Retail package offered on his website, www.success-di.com or the Fast Cash with Quick-Turn Real Estate offered on this site–both will serve your purpose). Both give you step by step instructions on how to make money wholesaling. LeGrand’s book, Fast Cash with Quick-Turn Real Estate (offered on amazon.com for less than $20), is good too, but it doesn’t give you all of the details you need to get started.
One word of caution. It might be hard to rent an apartment up in Palm Beach without a job. To get around this, you can get a part-time job. Or you can rent month to month. Or you can find an investor willing to lease-option a house to you. Or you can lease-option a house yourself. Or you can buy a multi-unit and live in one unit. Or you can take over the payments of a motivated seller (buying “subject to” the existing loan; rather than you asssuming the loan, the loan remains in the seller’s name and you make the payments). Or, if all else fails, you can prepay all or part of your rent from the reserves you have saved. In other words, though it’s a concern, you have lots of options.
Again, while I think buy and hold is a great long-term strategy, there are faster ways to build up your bank account. Once you have a decent “war chest” and everything’s rolling, then go looking for multifamily properties to generate a permanent cash flow stream. Read LeGrand’s article “Triple Your Income in the Next Twelve Months.” It should help to give you some direction.
Lots of luck to you. There’s a lot to absorb. Just remember to create a plan of action and focus on sticking to it. Pretty soon, you’ll be wondering why you didn’t start your REI sooner!