Silicon Valley Investors Club has fantastic experienced investors. We have launched the Investor Spotlight as a way to provide real estate investing tips and perspectives from fellow investors to our community.
Today, we are highlighting fellow investor, Mike Fuller, who shares his experience buying single family home investments.
The Investor’s Background
What’s your current role ?
DoS defense / WebSearch abuse at Google
How long have you been an active investor?
17 years
Why did you decide to start real estate investing?
Wife made me 🙂
What type of real estate investing strategy do you typically make (buy & hold, flip, wholesale, REITs etc)?
Buy & hold single family homes, though I have made others in the past.
What are you currently doing in the real estate market?
I recently decided to use the hot market to 1031 exchange out of a less desirable property, but it is so difficult to find a replacement property in 45 days that I’m not sure it’s a good strategy.
Are you currently seeking more real estate investments?
I’m always looking for good deals. But, in my humble opinion, there are no obviously good deals in any of the markets I’m aware of.
First Investment
When and where did you make your first real estate investment?
Carson City, NV.
How did you finance it?
FHA loan
How long did it take you to find it?
~2 months
What did you learn from your first investment?
You make your money when you buy, not when you sell. Also sellers typically lie about their operating expenses.
What advice would you give someone who is aspiring to do so?
Find a property manager who is an active real estate broker first (okay, as far as I know, all property managers have to be real estate brokers, but I mean one that also buys and sells properties), and use him/her to buy the property. Reasons are:
- If you use a regular real estate agent, they won’t know what properties rent for, which is really one of the most important questions.
- Experienced property managers know the good and bad rental neighborhoods.
- No sane property manager will sell you a pain-in-the-ass property if they will be stuck managing it.
Do you intend on focusing on the same type of properties for future investments (Single Family Home, Duplex, Commercial)?
Yes.
What’s a common mistake noobie investors make?
Don’t buy into any sort of “turn-key” investment scheme, TIC, group investment, etc. Good investments are bought, not sold (i.e., if someone is actively trying to sell you something, think of what their incentives are). All the money I have ever lost is because I allowed myself to be sold an investment.
Research
Are there any tools you are using that have made your real estate endeavors easier?
Zillow.
Name your favorite Real Estate Book, podcast, or any other resource that made you a better investor?
Real Estate Investor’s Deskbook is the most useful book I have used, but it’s not very interesting for a beginner. I have found most books, websites, and podcasts to be at best a waste of time, and at worst harmful. Examples of things to avoid include:
- The “Rich Dad” series. Kiyosaki is barely literate and apparently a liar. He is also long on anecdotal stories and short on hard data.
- Anything from Robert Helms and Russell Gray. They are at best really bad businessmen and at worst running a Ponzi scheme.
How do you evaluate properties?
Primarily cap rate. APOD and such are nice exercises, but there is such a high margin of error between theory and reality it seems pointless.
What are your requirements for investing?
Currently Class B+/A- SFH with a cap rate >= 3.5% in a landlord-friendly state.
How did you determine the market(s) to invest in?
Not in CA (not landlord-friendly), but anywhere I already want to travel to since travelling is expensive and time-consuming so I want to get something else out of the experience.
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