Morninnn,
While being in Orlando for a trade show I couldn’t help but envy the southern investors. No snow, no frozen pipes, no problems right?
Made me think that you can invest anywhere – while writing off those travel expenses none the less. Not a new concept – just enjoying 60+ degrees.
Moving along we have a wonderful investor to share with you (and a fellow northerner) JT of JTX-REI
How many doors do you have?
“6”
What got you into real estate investing?
“It all started when my wife and I managed to pay off $50k of medical bills and student debt in 1 year. At the time I was very heavy into Dave Ramsey and he would occasionally talk about Real Estate.
Now that we had no bad debt I figured we could start saving towards investing in Real Estate.
I started doing research, found bigger pockets and fast forward almost exactly 1 year later we closed on our first duplex house hack.”
What market(s) do you operate in?
“Wisconsin”
How would you describe your portfolio?
“My portfolio consists of all duplexes. 2 of them are house hacks and the 3rd one I purchased with a partner.”
What are you currently buying?
“Small Multi-Fams is what I’m interested in.”
Tell us about your biggest mistake in real estate?
“We made so many mistakes on the first deal and we’re still making mistakes but not the same ones. One of the biggest mistakes I think we made was that we used the contractor that our realtor recommended without doing any due diligence on them. They completed the work but it took them much much longer than was necessary, their finish work wasn’t up to our standards and they also required over 50% down before starting any work. Thankfully the scope of the work was only for one side of the duplex.
The way we turned it around was by creating a much stronger contract and refining it in such a way that it would protect us from bad contractors in the future. This contractor did have a couple great subcontractors so armed with a better contract, we went ahead and hired the general contractor to do only the work that we were confident they would do properly and found a much better contractor to do the rest of the work.
I can probably fill pages of different mistakes I myself made as a DIYer in the duplex too!”
Tell us about your biggest win in real estate?
We’ve only been doing this for 3 years so my only completed deal was my first one and it turned out really well.
Here’s the breakdown:
Purchase: $310k
Rehab: ~$80-$100k
ARV: $440k
Cashflow: ~$900/month
After we finished the remodel, we were able to do a cash-out refi and paid off one of the rehab loans. Then we went ahead and took out a HELOC against the remaining equity of the home and we used that HELOC to put a down-payment on our current house hack.
We’re currently working on fixing up this house hack and doing another cash-out refi to recover the money once we’ve completed the rehab.
What advice would you give to a new investor?
“Do your research and learn your neighborhood. Analyze deals daily until you can begin to see patterns. Over time you will get a sense for what a good deal is and what isn’t. Once you have that knowledge, don’t stop there though, use it and take action. Make sure you have a decent down payment and have a bank pre-approval and then start making offers. Don’t let all that research go to waste. Once you have a property rented out you must make sure you understand this is a business. The only way you will be successful is by treating your Real Estate as a business and do things the same way a business person would do it. Take care of your tenants, treat them like people, be fair but firm and your tenants will stick around for a long time.”
Checkout JT on Twitter
Enough Business
Building a portfolio is hard work. Working a day job to then come home and not spend money on Grubhub (even though you’re hungry) or buy that new Tesla (even though you ‘deserve it’).
Stay focused on that next step – next property – next deal. In between don’t forget to enjoy the fresh snow. You don’t have to put off being happy while investing in your future.
See you next week
