How I bought my first rental duplex on my lunch hour
Many find it hard to buy rental property while holding down a full-time job. Kevin Guz, who now owns a HomeVestors franchise in Dallas, tells the story of how he got started on his lunch hour.
For many part-time investors or investors embarking on that first rental investment property purchase the easiest excuse is, “I don’t have time.”
If you have the desire to purchase investment real estate, and you are already involved in your career- you have a great full time job or full time passion and career – that is not an excuse that that should keep you from also pursuing your passion of owning investment real estate. Don’t let the time factor hold you back.
I started my rental real estate career by leveraging my lunch hour
I started my real estate career by leveraging my lunch hour. Maybe your “hour” is a little different. Maybe it’s on Saturday morning or after 5 p.m., whatever it might be, you have an hour in your week or your day to pursue your dream of becoming a part-time real estate investor on the side of your traditional career.
Here’s how I did it
Leading up to the point where I actually purchased the property. I leveraged my lunch hour literally. I respected by career and I encourage everybody to do that. I did not want to do anything to lessen my commitment to my career, my company or my job. I do not encourage anyone to do that. I do not encourage you to chase real estate at the expense of your career or the commitment you have made to your employer.
I started out during my lunch hour – instead of sitting at my desk staring at the Internet eating a sandwich or sitting down in the corporate cafeteria or alone in some fast-food restaurant, I found that I could best leverage that hour to find where I wanted to purchase my first property.
I would head out around noon and just drive neighborhoods until I determined what neighborhood and in what area I wanted to purchase my first property. I had a couple of criteria and yours may be very similar, or yours may be different.
Here’s what worked for me
I was combing neighborhoods close to where I lived and worked. I wanted my first property to be close to me so I could keep an eye on it. And number 2, since I was just starting out I was planning on doing all my own initial repairs and updates and I was planning on doing my own on-going maintenance so I wanted that property to be close to me. I was also planning on managing it myself in terms of the marketing and the sourcing of tenants, etc.
So I determined, “Let’s stay close to home,” on this first property. I also chose to stay in a familiar neighborhood where I knew the neighborhood and the demographic or type of people who were there who were ultimately going to be my tenant or customer. I chose an area that was very familiar.
And finally I chose an area that allowed me to purchase a property at a very reasonable cost or a low cost of entry. Let’s face it. You are a busy professional. You are pursuing your first investment property. You probably are prudent to minimize your risk and exposure and start small. You don’t need to buy a four-bedroom, three-bath home with a swimming pool and target renting to executives. That might not be the best approach. That is putting a lot on the line for a new, novice or busy professional who cannot allocate a lot of time to his first real estate investment.
So I chose a smaller property
And I chose to look at properties that were very affordable and had a very low-cost of entry in order to minimize my exposure as I worked through my learning curve.
And so after a few days of running around on my lunch hour. And I will be honest, it was over a course of time. It wasn’t one day or two days. It was over the course of several weeks. I narrowed down and did my due diligence and found the area where I wanted to purchase. Once again, I was a busy professional. I did not have the time or expertise to source my own property off the wholesale market-like many investors do, and like many investors want to do – that takes a lot of time, a lot of effort, it takes a lot of knowledge and it takes a well-built network of your own to source properties that are off market or off MLS. I was not in a position as a part-time new real estate investor to do that so I had to find a Realtor.
I found a Realtor on my lunch hour also
And you can do it on yours. Once I knew the area I wanted to invest in I looked for the Realtor signs that were active and prominent that were active in that particular area or neighborhood. And whether they were listing a house for sale, or even better if they were listing a house for rent. I knew then by the names, faces and numbers I saw on those signs there was a pretty good chance those real estate agents were familiar with that area. And if I could find one listing a property for rent, not only were they familiar with the area but they were familiar with the rental market which is what I was interested in.
So I drove neighborhoods and I ultimately identified an individual agent who seemed to be active in that area and low and behold that was the agent I chose to work with in buying my first rental property. And I say to work with, he basically worked for me. And that’s what an agent will do for you.
If you are overwhelmed at the thought of investing in real estate because you have a busy full-time career and a serious commitment to an employer or another passion – hire a real estate agent because they will work for you and they will take care of a lot of the legwork. You can focus not only on your part-time real estate investing, but on your full-time career and you do not have to turn your back on either one.
I would also suggest when you are searching for that agent, the temptation may be to pull the agent’s name you see on the billboard, or who has the biggest ad in the newspaper or sends the most flyers to your house.
I took a very different approach
I did not seek out the big real estate agent in the area who was doing a lot of retail deals. I chose an agent that was newer, hungrier, more motivated and they had the bandwidth and the energy and the willingness to work with a real estate investor like myself. I was not looking at high-dollar properties, and not looking at expensive properties. So financially that one house may not have been real appealing work to a higher-end, high volume agent or a more experienced tenured agent. They may not have been able to give me the attention this individual did because of who he was and where he was in his career.
It was not my objective to take advantage of a new agent and their availability and time. It was actually the opposite. And this agent realized it and knew, “If I sell this part-time investor one property, there is a good chance he is going to want to come back to me very soon and want a second property, and a third property and a fourth property.”
That’s exactly how my story played out. Not only did I purchase that initial property from this agent but I ultimately purchased many properties from that agent as I built my portfolio on a part-time basis and he profited very nicely over the course of time.
So it was a relationship that worked great for both of us.
Once I found the Realtor, now it was time to find the house.
That is where this Realtor came in so well for me as a part-time investor and will work for you. He knew my area. He knew my criteria. And he set up an auto search. I would get daily emails with the properties available that were meeting my criteria and we got into a rhythm where I would receive the email first thing in the morning. I would call him and he would schedule an appointment for noon. And there I was back out on my lunch hour.
But I wasn’t combing neighborhoods anymore or looking for Realtor signs. I was actually walking into properties and ultimately making offers on them. And this worked great for me as a part-time investor. I had a busy career, but before I ran into work each day I would scan the email to see if there was anything I was interested in seeing a lunch. I could call him or text him that morning, and he would quickly reply back with “see you at noon” and we would go visit a property or two at lunch.
My first rental property was half of a duplex
If you fast forward, I ultimately purchased a property through this process. It was a two-bedroom, one-bath, one-half of a duplex.
- It was close to my home.
- It was a very affordable purchase price.
- It was small. Physically small.
- My exposure to maintenance and repairs was very minimal, it was only about a 900 square foot house.
- It was very manageable.
Very close and very affordable which were my key criteria for my first investment property as a part-time investor. I did not want to bite off too much too soon.
I still own this duplex 10 years later
I still own this property today over 10 years later and it is still continuing to generate a nice monthly cash flow.
It does not end at the purchase. As a busy executive, I did not have time for a lot of the future activities that are required of investment properties and that Realtor came in very handy as a critical component of my ability to manage my growing portfolio over time that he and I were working together to build during my lunch hour.
A resource to determine rental rates and more
He was a great resource to determine rental rates.
I did not have time, access, knowledge or experience on how to price my properties for rent.
- He had access to all the rental data, and as we would approach the properties and consider purchasing them part of our discussion would be the due diligence he did and tell me exactly what that property would rent for. Then I could use that to determine my profit analysis to determine if that was going to be a good profitable investment.
- He would do most of the work therefore enabling me to make decisions on my lunch hour without doing that type of analysis.
- He would also tell me the inspector who needed to inspect the property. Once again I did not have the time to source an inspector for these properties. If I placed an offer, he would bring the inspector in and I could trust it was a good, quality inspector.
- He found me lenders as we continued to build my portfolio. Once again I was a busy executive and did not have time to source and screen lenders. Ultimately he pointed me to lenders I have relationships with to this day over 10 years later who I am still doing business with as I continue to build my rental portfolio now as a full-time investor.
- He even found repair people for me.
- He found title companies for me.
- And though I did not initially use property management, your Realtor can even find you a property manager. If you are so busy you do not think you can manage them once your buy them don’t let that be a barrier. You can get good property management and your Realtor can help you find it.
Though I did it on my lunch hour, everybody has an hour.
Whether it’s their lunch hour, their Saturday morning or their evening. Don’t let time be a barrier to you as a part-time investor and as someone who is seeking to purchase your first investment property.
About The Author:
Kevin Guz is a residential real estate investor with over 10 years of investing experience based in Dallas, Texas. Kevin is the owner of a HomeVestors or “We Buy Ugly Houses” franchise and is also owner of the Clear Key companies which focus on residential real estate wholesaling, rental property management and self-storage leasing. He is a licensed real estate agent in the state of Texas. Kevin enjoys sharing his on-going personal experiences, perspectives and learnings from his start as a part-time or “weekend investor” and full-time corporate professional to his ultimate transition into his current full-time endeavor as a real estate investor and business owner.