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Buying Tampa Bay
Buying Tampa Bay
S2 E3. How to Buy Your First Investment Property
What if taking the leap into real estate investment was simpler than you ever imagined? Join us on the Buying Tampa Bay podcast as we unravel the mystery of purchasing your first investment property. Through our personal tales and experiences, you'll learn why starting small and embracing imperfections can be your greatest strategy. We reveal how owning your first home can provide an invaluable education in maintenance, from fixing plumbing issues to mastering air conditioning repairs. This foundational knowledge not only equips you for future investments but also strengthens your ability to manage properties successfully.
In this episode, we share the nitty-gritty of creative real estate strategies, like the savvy "subject to" mortgage purchases that can transform stagnant markets. Witness how sweat equity turned a modest property into a lucrative flip, setting the stage for exciting multifamily ventures. We also delve into flexible financing avenues beyond traditional loans—hard money, private lenders, and seller financing—and uncover the potential of the BRRRR strategy in distressed markets. By weaving in these strategies, we're here to inspire and guide you on your path to real estate success, demonstrating that calculated risks can lead to rewarding returns.
For all your Real Estate Investment and Property Management needs check out HomeProp!
https://www.homeprop.com
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Hello and welcome to the Buying Tampa Bay podcast. We're your hosts, peter Murphy and Chase Clark. One of the most common questions we're asked by people looking to get into real estate investing is how do I buy my very first investment property? Every real estate investor has a story about their first investment property and they run the gambit from details that just fell into their laps to hard-fought battles that almost didn't happen. So we're just two guys with our own first deal story, and we've heard lots of others, so we're going to share that with you today in hopes that you'll be inspired to jump into real estate investing yourself. A journey of a thousand miles begins with a single step, or at least so they say, right, chase?
Speaker 2:Yeah, the battle's won by getting to the starting line right. So you can sit around and think about it all you want. You can speculate, but actually jumping in and getting a deal underway is something that is very hard to do for a lot of people, but it's so rewarding in the end.
Speaker 1:Yeah, and perfection is the enemy of good enough, isn't it? I mean, a lot of people, like, are looking to know everything before they start, and that certainly wasn't our case. I mean, I think there was probably a little bit of a fool's vanity in our case. You know where. You're like, hey, we have an overinflated perception, maybe, of our own abilities and we're like whatever we're going to do, just fine, let's go ahead and get this done. And so you jump in head first, only to discover very soon that you have no idea what you're doing. But at least we started. That was maybe. Maybe that's our greatest strength we were actually able to take the first step.
Speaker 2:Yeah, your strategy going into it and what you hope to achieve really will dictate how much risk you want to take and how much money you're willing to invest. And if you start small, sometimes that's to your advantage. But don't sit back and wait for a home run. I think that's what so many people do today is they're sitting back analyzing property after property after property and they never actually jump in because they're looking for a home run. And home runs are very hard to come by and very hard to come by on your first deal.
Speaker 1:Well, I remember a person, probably about 20 years ago now, and she flew up to Tampa from Miami right after the crash of the housing market and she was probably in her early 20s and she was dynamic and charismatic and she was looking to buy her first investment property and she was there with a team of mentors and advisors. And I remember talking to her and we're like, so this is your first investment property. And they were like, yeah, it's her first and she doesn't even own a house yet. And that set off some alarms in my mind, because here was a woman getting ready to jump right into investment real estate and she didn't even own her own house and I thought that maybe that was putting the cart before the horse a little bit. Owning your own house always seems to me to be the easiest way to get into real estate investing.
Speaker 2:Yeah, you know that's the advice that we pitch to everyone. I think that starts out is make your first investment the house that you live in. Buy a house for yourself. There are so many reasons for that. Again, by you living there, the risk is much lower, Financing options are much better and you learn a whole lot about what it takes to operate a piece of real estate once you own it and live in it and have to take care of it.
Speaker 1:Right. So, yes, the lessons you learn as a homeowner, I mean, are just rich. I remember the first time I bought a house and, like within a week or two, I was doing plumbing right. I mean I was replacing the guts of my own toilet, I was figuring out what was going on with my thermostat, which wasn't working. I mean you go through a process of buying a house and you get inspections and you're kicking the tires and you think everything's going to be fine. But the minute you move into that house and start using it, I mean no matter how many inspections you've got, something is going to go wrong and you have no extra money to fix it, to get someone else to fix it for you. You're figuring that out yourself. And what tremendous school that is right. So you're learning plumbing, you're learning electrical, you're learning air conditioning, you're learning all about how to replace small things like doors that are broken or windows or closet doors that come off the rails, and that sounds to me like everything that goes wrong with an investment property.
Speaker 2:Yeah, and sometimes there's some stuff that happens that you can't fix right. It's well over your head and you've got to call a vendor, and it's also a great opportunity during that time that you live in the house to develop a Rolodex of vendors that can be on your investment team when you actually need to get something done for a tenant. So, beyond all that experiential learning that happens when you live in your own home, there's the ability to expand your sphere of influence, expand your vendor list and learn all those kinds of things that are necessary things to know in great detail if you're going to know how a property operates and therefore how to handle tenants that are living there when you're not living there yourself.
Speaker 1:Right. I remember shortly after I bought a home I had to make an air conditioning call. And so the vendor comes out to my house and I know I'm getting ready to pay some money for this. So I say I'm going to pay the money for it, I'm going to call it my own education, right? And so I sat beside that air conditioning vendor. I stood beside him and watched him as he stuck a hose inside of his drain line and drove that air conditioning crud out of that condensation drain line. And you know that clogged condensation drain lines account for probably 90% of our air conditioning calls every summer. And the fact that I was able to sit and watch an air conditioning vendor do that and learn how that was done it probably has added all kinds of money to my bottom line. Because I watched, because I took that lesson seriously. I paid for my own school, but I've never had to pay for that again.
Speaker 2:Yeah, that's right. There's so many opportunities with things like that. The majority of people I run into they never even contemplate the idea that they will be engaged in their own maintenance. They've always thought this is a phone call that I make. You know, I'm not going to take the lid off my toilet and investigate how to change the valve Right. I'm not going to change the flapper. I'm not going to consider why my toilet might even be clogged and how to use a plunger effectively. You know all those kinds of things that you learn, even learning that every P-trap in a plumbing system clogs up with something over time and requires routine maintenance. So many different lessons can be learned and they all save you a ton of money and a ton of time down the road, which is only going to increase your ROI when you're in an investment scenario.
Speaker 1:Yeah, and none of that sounds like glamorous stuff to me. But if you're looking to get into real estate, the deal is clean and heady and intellectual on paper and that feels really good to do that. But when push comes to shove, you must roll up your sleeves and get your hands dirty sometimes, at the very least, so you know what you're talking about. When a renter calls you, when another investor calls you, and you can uh, you can actually walk them through a process to save you some money. So all of that is very, very important now. So buying your own home is critical and you do that right. And because when you buy your own home, financing is just cheaper, so it's easier to get into the investment game when that first investment property is an owner-occupied house.
Speaker 2:Yeah, a lot of people don't understand the ins and outs of financing, which is one thing that you need to explore pretty in-depth or get a trusted advisor in that realm to help you understand better before you start buying properties. But banks view owner occupants as less risky than tenant occupants in a home, and so the interest rate is going to be lower typically for you to buy a home that you're going to live in and interest being a significant cost to you every month that's affecting your ROI, is something that you need to take into consideration when looking at the different options for financing. But being able to buy the home initially upfront and lock in a 30-year fixed rate at an owner-occupant rate will only serve you better down the road as you decide to vacate that home in lieu of putting tenants in Right.
Speaker 1:And this is a long game we're talking about here Getting into real estate unless you have a ton of cash, you're going to have to do this over the course of time, and so you think about it this way I'm buying myself a home that I'm going to live in, and I'm going to live in it at least two years right, Because I must in order to forego certain tax implications right, that might be involved in a future transfer. Tax implications right, that might be involved in a future transfer. And so you're going to live in it for a while while you recoup the sunk costs you put into closing costs, and then you're going to buy, potentially, a second home, but it's going to be a few years before you do that, right. And while you're living in that home and it's your own home and you've got that great rate of financing on there then you turn that into a rental property. You don't need to. That great rate of financing on there. Then you turn that into a rental property. You don't need to. That same rate of financing, which was so attractive at purchase, is going to carry forward with that mortgage, right. And that's something you just could not have gotten had you bought this first and foremost as an investment property. So the economics of that if you're going to make it into a rental are just going to be dramatically better. If you're talking about being able to convert a home from owner occupancy use into investor use, it's definitely a great way to buy your first long-term investment property, even though you're going to be living in it for a while.
Speaker 1:First.
Speaker 2:Yeah, that's right, and if you're fortunate enough to have this as your strategy going in, you're going to want to consider what home you buy to live in with a view toward renting it out one day. You know, some homes are designed better for tenants than others, and some things that appeal to you personally won't broadly appeal to the renter market, and so those are some things that you want to consider if you are going to buy a home to live in for several years maybe even longer but then eventually turn it into a rental property, because you're going to want something that's going to have mass appeal to the largest group of tenants possible and thereby be able to get you the highest market rate for that property that you can achieve on the open market.
Speaker 1:Great. So just think about that first purchase. You make the right way, think about it like an investor right, and not just an owner occupant, and you will be able to have that flexibility to turn it into the investment. But for a lot of people, they want to think about their future investments, you know, beyond buying their own home. And so, well, that's where I suppose we have our first real investment property story, right, because, well, we own our own homes, but shortly after owning our own home, we then wanted to get more deeply and more broadly into investment real estate, and so, in our case, we had a condo. That actually was our very first investment property. Chase, tell them the details of the story, because it's a funny one, an interesting one, one where we learned lots of lessons, but it's also one that probably a lot of other, a lot of people could do if they wanted a first investment strategy.
Speaker 2:Yeah, you know, I think actually the seller on this deal was one of your personal connections in some way, peter. You know that you found out, I think, that they were looking to sell their home and we're having some issues doing it, and they needed to get it done in a relatively short period of time, and so we engaged that seller and proposed to them that we do a subject to deal. And so, for those of you wondering, you know what a subject to deal is, peter you want to give us some details on how do you even execute a subject to deal?
Speaker 1:Yeah, this was a deal, right, when the investor was going to have had a mortgage on this property and she needed to move quickly from this property and so she was going to sell us. We were going to buy this property from her and keep her existing financing in place, so we are buying it subject to her existing mortgage, right? It's a very common way for people to get into a home where they don't have to actually qualify for a new loan. You're buying it subject to that mortgage and you're usually paying an additional amount of money, so her mortgage is very likely, or the mortgage of someone who owns a home who's willing to sell subject to, is likely considerably below what the market value of that house is. So you're coming up either with your own cash or with another form of financing to pay that additional amount above the mortgage, between the mortgage value and the actual market value.
Speaker 1:And if you're in a market where maybe this owner has bought very recently and maybe that a property hasn't appreciated very much since she last or he last purchased, well then you don't have to come out of pocket with very much money at all. Or maybe there's some repairs that need to be done on that property in order to really maximize its value. Well, if you buy it for a little bit above or equal to what that mortgage is worth and you keep that mortgage in place, then your sweat equity can help increase the actual value of that asset. That's really how we viewed it. She had only bought this home a year or so prior to when she needed to sell it and it needed some repairs in order to achieve top market value. So for just a small amount of cash out of pocket, we were able to acquire this home from her, go on title as the owners and keep her mortgage in place. It is an arrangement that many people can avail of.
Speaker 2:Yeah, you know, and so often sellers that are in this position because they need to move quickly or because they have a specific amount of money or cash that they need to be able to throw down on another deal they're trying to buy or another house they're trying to relocate to, sometimes you're able to come in and offer them not the full amount of equity but, you know, something short of it, as you suggested, so that when you buy the property, you've already got some built-in equity there, and so not only do you have built-in equity, but you're buying it subject to the existing loan, so you don't have all the closing costs involved with generating new financing through a lender. You don't have to qualify for that financing if maybe you can't qualify right now, but you simply pick up the payments and run while you either execute a flip strategy, like we did on this condo, or you execute a buy and hold, if you've got some more runway there on being able to hold that seller's note for longer than just a few months or maybe a year, and so that's what we ended up doing. We ended up flipping this condo and so doing that with the existing seller's mortgage in place and providing her a few thousand dollars to help her acquire what she needed on the other side of her purchase that she was making as she vacated this condo. We went in, we did that sweat equity right. We got in there, did the repairs, painted the place up, cleaned the carpets, did all the stuff to put some lipstick on the pig, as they say and it led to a profitable flip for us, our very first deal, and I think we probably had around $10,000 invested in that deal.
Speaker 2:I remember right by the time that we sold it and we doubled our money, and so it was a really good execution on a strategy we had never done before. We knew about it, right, we had the education, but we had to pull the funds, jump in, be willing to sweat a little bit inside the property, take a little bit of risk and have a willing seller that would cooperate with a subject to type deal. But you can find those out there and if you're lucky enough to find one, you can end up making some money and having your first split be profitable.
Speaker 1:Yeah, it was a great deal, it worked out well and we profited, but it wasn't free from mistakes, right, and I think that's something you're going to have to accept really early on. This seller ended up being a wonderful seller and patient with us, because this was our first deal and as we went through that, timelines got stretched as they often do and one of the things we were hoping to do is be able to flip the property quicker than we actually did, and it took us a few months to flip that property and to really unencumber this seller's equity right, to actually pay off that mortgage right, and so we tried to keep her well informed of what was going on during that process and tell her that you know we're unable to meet the initial deadlines and fortunately she was someone who knew us and trusted us and was a friend of us and was very patient with us through that process. But that deal wasn't without its complications, right, and certainly without some really great lessons learned for making sure you don't over promise, right, making sure you execute your plan to renovate as flawlessly as you can, find a seller who understand that you're young and this is your first deal and you're human and things might not go perfectly, but you're going to do your best to be honorable. Through that process, we were able to find someone who wanted to see us succeed, right and so if you live in a small town, you've got a lot of friends. They're going to be cheering you on and cheering on your success, right and so doing this in a situation where there is a safety net or a soft landing around you because of people's trust and relationship in you is all a good thing. So on the other side of that deal, although we had some scars from it and some lessons learned, at the end of the day we're happy.
Speaker 1:It was our first major success. And of course, then we were able to roll that into more deals and we rolled that into our first duplex Right. So really that's where we went from there into some multifamily, multifamily real estate. But it was ugly stuff, right. I mean it was really cheap, it was really dirty. I mean that was the way we were going to go for a while.
Speaker 2:Yeah, there's nothing like owning multifamily real estate and low income areas, right? No better way to cut your teeth than doing that. And that's exactly what we jumped into. We went from this nice pretty subject to flip to real sweat equity and having to manage low-income housing in the form of a duplex and multiple duplexes followed. Right, and you know it's. It's an area where you can often find the best yield, and some of the neighborhoods that are a little less desirable to be in, some of the lower priced investment properties, may may rear their heads in those neighborhoods, and boy did we learn some real lessons there. So many good things to be learned from flipping a property, but nothing can teach you real estate lessons and investing, like owning, buy and hold long-term rental properties and dealing with tenants every day and some of the issues that come up regarding that.
Speaker 1:Right. So buying ugly houses is you've probably seen the billboards around we buy ugly houses right. When you buy something that's ugly, you can guarantee yourself a little less competition, because a lot of people want something sanitary and clean and a trophy property, something they can be proud of, and many people are afraid of ugly homes in bad areas. They might be a place that you wouldn't personally live right, but there is money to be made there if you have the courage to get in and the resourcefulness and usually the price. The entry level thresholds are lower right, because they're cheap and ugly right and they need some serious work, and so it might not take you as much cash to break into this ugly home category.
Speaker 1:For us, that was a great place to start because we really were pretty broke. I mean it was just us place to start because we really were pretty broke. I mean it was just us Chase. We don't come for money. We didn't have investment backers. We needed something we could afford, and what we could afford wasn't pretty, but it worked and we were able to once again double our money, once again make a little bit more on every deal that we did and that moved us through types of product that we were able to slowly watch that improve. But certainly one of the things we did was we invested a lot of ourselves in these deals and I remember our wives both came over to one of our first duplexes right and they brought us like back in the day we were still drinking Coke Chase. I remember distinctly she brought a bottle of Coke but I was up to my elbows and I can't even repeat what it was as we were cleaning out this place.
Speaker 2:And you know, it was the last time, I think, our wives ever volunteered to help us rehab a house. Oh man, there's several clean out jobs. I remember fondly, 10937 North 23rd Street, I believe, or 10913114 North 23rd Street, right, I think that was that first one that our wives were at, where, you know, we encountered some things that we hadn't seen before in a living environment. Right, you know, it's true, about buying cheap, and I think you know, back in our first look was 2004. So in 2005, we're buying duplexes and some of the, you know, lower income neighborhoods of Tampa still right around $100,000 for a duplex. I mean, can you imagine right now if you were 20 years removed from that? Right, but those prices are now triple or quadruple what they were back then, and still that was a big investment in 2005 is paying $100,000, $110,000 for a duplex. $100,000, $110,000 for a duplex. Now for context back then rents were like $600 a month for a two-bed, one-bath duplex. And so, no matter what time you're in, no matter what the prices are, you got to make the deal work. And so when you look at prices today versus what we're talking about and some of this early stuff we did back in 2005, the numbers still had to work for us and even though we were buying ugly houses and low income neighborhoods and maybe buying them on the lower end of the market, you know, we were still having to make rents, yield an income from those prices.
Speaker 2:And one thing I think that we found, or one lesson that we learned in that, is that the stuff that we bought in the public markets, like off MLS, right, the stuff that was publicly listed, turned out to be an okay deal.
Speaker 2:But the best deals that we found and I'm referencing, you know, one of the properties we have is over on Annette Street, right. That was found through an agent but it was a distressed deal, right. We found an owner that had a life situation that predicated him selling this property fairly quickly and he really didn't care about getting the most money for it because he was going to have to share it with now, his ex-wife, right. So that presented an opportunity for us to buy a property below market value which we turned around and sold a couple of years later for a really nice profit. I think that was our first six-figure profit we ever did on one single property, and it's because we bought it from a distressed seller and we had an opportunity to do it in a way that was a little unconventional from the normal market dynamics.
Speaker 1:Right. That's a really important lesson. You know, almost every real opportunity will come from some kind of distress, right? Either the distress of the seller or the distress of the house and the know-how to do that. And they don't have the time to do it and so all of a sudden that purchase price comes way down to allow for someone who's got the ability to invest sweat equity and get it and build the house up to the right point again.
Speaker 1:Or the opportunity comes from marketplace distress. You have a corrective force that's coming down on the market and prices are dropping and now you have the opportunity to buy really low. And in every one of those scenarios you have people well-meaning, risk but risk averse people saying that is a bad house or the market is really low and this area is never going to recover again. And you've got that kind of voice not only in your head but all around you. And it sometimes seems that when that's the case, when everyone's saying you shouldn't do it, sometimes that's exactly when you should do it. You should buy that deal, because once you invest that sweat equity, because the house is worth more, once the market has a chance to stabilize, it inevitably corrects and appreciates again. And your ability to be able to kind of stomach some of that risk, stomach some of that naysaying and buy that investment that is in a distressed state, can make all the difference in the volume of payday that is ahead of you.
Speaker 2:Yeah. So when we talk about starting out buying your very first investment property, you may not have a lot of cash. We all know that the old adage is cash is king, because cash enables you to buy properties that are well beyond the realm of financing. So the super distressed stuff, right, the stuff that needs so much repair that a bank won't finance it. Cash also gives you the ability to buy something quicker and close quicker, and so some people that find themselves personally in a distressed situation, they need quick cash and if you've got cash, you can execute on that. So, starting out not necessarily maybe having enough cash to take down an entire property with cash, you've got to rely on that financing realm, and so your distress level on the property side may not go as deep as you might like like, because you still have to get that property approved for bank financing, if that's the realm you're going to go in.
Speaker 2:But sometimes there are other avenues that are available to you to find funding for these types of houses that are truly the best deals, and those range from owner financing to using hard money, to borrowing from friends and family, private money lenders that are out there that aren't quite as hard as the hard money guys and we've executed on all of these strategies. We have used all kinds of people's money at different times to take down different deals, because that's what the deal required or that's what was in our best interest at the time to use. And so don't be closed off to using some of these other funding sources just because they're a little bit more expensive, because paying a hard money lender three points and 12% is sometimes a really good deal if you're buying a property for $100,000 under market value. So just be open to using different sources of money and know that they're out there. And if you don't know that they're out there, you need to talk to some people in network and try and find some of those alternative money sources instead of just going to banks.
Speaker 1:Some of those alternative money sources instead of just going to banks? Right, if looking at each of these sources of financing and evaluating the effects of these sources into your deal is what makes them good or bad. Right, the fact that they might have higher interest rates and higher costs on its own is neither good or bad, it's just a fact of the deal. So evaluate the reality that you're facing into the fact of the deal, into the actual deal, and let's see if it's then good or bad. Right, every deal could look really bad with the wrong kind of financing right, and so it's about just making sure you're calculating it correctly. Financing right, and so it's about just making sure you're calculating it correctly. So lots of good options.
Speaker 1:And I really do like hard money as a source. We bought many deals on hard money or on private equity where we've paid a higher interest rate, but because of the fact that it was available right away, with minimal underwriting guidelines, it made that higher interest rate worth it because we were able to buy the property. We were able to get our hands on that property where we saw that equity opportunity or that income opportunity, and had we not access to cash right away through those financing sources, we couldn't have bought the deal at all. So it was really important. Time is really an important equation in all of that.
Speaker 2:Yeah, and a lot of you guys that are out there that you know.
Speaker 2:Follow these gurus, these investing gurus, or look at these real estate universities that are out there or watch the podcast from deeper pockets and people like that.
Speaker 2:They promote this birth strategy all the time, and the birth strategy really is a great one to follow, where you utilize multiple sources of financing.
Speaker 2:You're going to use a little bit of your own cash, probably to rehab the house or get it ready to rent out. You're going to maybe use some private money or hard money or, in a best case scenario, some seller financing to actually acquire the property up front and then, once you've got the property stabilized, with rental income coming in, go to the bank and then exchange that private money, that hard money rate that you have at 10, 12, even sometimes 15 percent. Exchange it for right now, that 7 percent rate that Bank of America or First Horizon can offer you as an investor and therefore lower your interest costs and lock in for the long term. If you've got a buy and hold strategy, lower your interest costs and lock in for the long term. If you've got a buy and hold strategy where you've got good runners in the property, your cash flowing in and now you can lock in some really attractive long-term financing with a traditional bank.
Speaker 1:Well, let's say you are not ready to buy your own home just yet, entirely your own investment property. There are a couple of other things I think are really good options for someone getting into investment real estate to give a shot at, and one of them is wholesaling properties. Maybe you've got the ability to research properties really well and you've got your models down for evaluation and you can identify a good deal. And if you're shrewd and resourceful and you've got the knowledge in place, you can put a contract to purchase on a property and let's say it's a great deal. You put a good contract on that property and you get it at a good purchase price. There are lots of people who are waiting in the wings, who would love to buy that contract to purchase from you and who you can charge an assignment fee to in order to take over your interest in that purchase agreement and actually close on the house.
Speaker 1:The role you will have played was you brought the deal together. You brought the seller of the property together with the eventual end-use buyer and for that function you get paid an assignment fee. You can negotiate that into the deal with the buyer, with the end-using buyer. That is called assignment and that's a wholesale process. That's a function that's very common in the wholesale world and anyone can do that as they are looking to get started. That's one great way.
Speaker 1:Another one is a really good way that we've used a lot starting out Chase. We partnered with some good, seasoned investors. Find someone who you know, who you trust, who's doing it already, and see if you can come alongside them and do one of those key functions in the real estate investment life cycle. Add some value that way, but watch how the deal comes together. Let them be a type of mentor from you and partner for maybe a little bit of equity or maybe for some sweat equity, and learn some of what you don't know. That way it's a great way to get into the industry. That's one of two ways that I like a lot.
Speaker 2:Yeah, capital becomes a huge restrictor for most people when it comes to real estate investing. If you're starting out, maybe you don't have a ton of capital, but even after you buy your first or second deal you may have exhausted all of your capital. And even if you're purchasing your first home and you're going to get an FHA loan, you're only going to put 3.5% down. Right now in Tampa Bay, buying the average price home at $447,000 with an FHA loan, with a current rate today of 6.75% With taxes and insurance, your all-in payment is going to be about $3,500 a month. That's what that's going to cost you. But you're also going to have to bring the closing Between your down payment and your closing costs almost $27,000. $27,000 to get into a home that way. So that's a lot. That's not chump change for a lot of people. That's something you've got to work towards and save so that you can invest.
Speaker 2:And just to throw this out there as an aside real quick I run into so many people that want to have a career in real estate investing that are right out of college. Real estate investing is not a career for most people. There's a very small segment of people that can make a living right away and have success being a real estate investor to the point where they can support their lifestyle. It's called real estate investing because that's exactly what it is. It's an investment. It wasn't always meant to be your primary source of income. It wasn't always meant to be your primary source of income. It wasn't always meant to be the way that you make a living. It was meant to use the savings that you want to invest from making your living in a vehicle that tends to outperform the market on many levels, and so you've got to think about real estate investing the right way to start. To think about real estate investing the right way to start.
Speaker 2:But if you don't have all that cash and all that capital even to buy your own first home that you'll live in, there's some other options out there that have become very popular over the last couple of years, and I'm not advocating for any of them.
Speaker 2:I don't currently participate in any of them, but they are options and I do know people that do like them and end up achieving a decent return in them, and there's a lot of crowdsourcing and crowdfunding real estate investment options out there. Some of the more reputable ones available to you are things like Fundrise and Realty Mogul. Those are two highly rated crowdsourced real estate investment options out there for you where you can get in for as little as $100 sometimes, and so if you want more of a mutual fund stock portfolio type real estate investment, maybe look into that, because I don't know exactly what all their fee structures are, what kind of ROI you can expect to get from them, but they do come highly reviewed and some of them provide pretty attractive returns on investment from what you can see from current clients that they have. So if you want that drip investment opportunity or something that's going to be a lot less cash in which you need to actually close on an actual piece of property, that's definitely an option you might want to look into.
Speaker 1:Well, chase, this has been a really good practical introduction into how to get into your first investments. I really like some of what we talked about here. If anyone who's listening to this show wants to get into their first real estate investment, it really is kind of like an open opportunity. Reach out to us, let us help you evaluate what best options there are for you. Your own circumstance will dictate to some degree which of the strategies we've talked about today are going to be the most ideal for you and, of course, you'll have your own natural inclination for one of these. Let us help advise you along that way. We're at Home Prop. We're happy to be advisors to you. In that capacity, we're happy to help participate with you. We're happy to come alongside you in a lot of the deal types that we discussed today and open invitation to reach out to us and let us help you get into real estate, because we certainly do think it's a wonderful investment strategy.
Speaker 2:Yeah, don't forget, the single biggest creator of wealth in the history of the United States is real estate. So if you can afford to enter the market, don't wait. Get in now, because it will be the single biggest builder of wealth for you throughout your lifetime more than likely.
Speaker 1:Great stuff. Well, chase, thanks a lot. It's been a lot of fun. Until next time, it's Peter out. Have a good one, guys, thank you. Thank you, we'll be right back. Thank you you.