Silicon Valley Investors Club has fantastic experienced investors. We have launched the Investor Spotlight as a way to provide real estate investment tips and perspectives from fellow investors to our community.
Today, we are highlighting fellow investor, Filip Filmar, who shares his experience getting into buy-and-hold real estate investment.
The Investor’s Background
What’s your current role?
SWE at Google
How long have you been an active investor?
I would say since about September 2015, when we bought our first property.
Why did you decide to invest in real estate?
I realized at some point that any money we (my partner and I) don’t put to use is money wasted. However, at the time we knew nothing about investing. Owing in part to our cultural background which places little value on knowing about finances. As we learned the ropes, we came to view real estate as the most tangible way to put our money to good use, and we found out that we enjoyed the process as well as the result.
What type of real estate investments do you typically make? (buy & hold, flip, wholesale, REITs etc)
We limit ourselves to investment vehicles that we researched and know well. To date, we are the most comfortable with buy and hold. We are researching other options, and I am running an experiment in online P2RE (“peer-to-peer real estate”) lending.
What are you currently doing in the real estate market?
We are looking to expand our investment portfolio. In the process, I’m interested in finding like minds who we could work well with in a partnership.
Are you currently seeking more real estate investments?
Yes, we are constantly on the lookout.
When and where did you make your first real estate investment? How did you finance it? How long did it take you to find it?
We made our first investment in September 2015, following about a year of learning and research, in the Houston metro area. We used a conventional residential loan to finance it. We didn’t spend a long time finding the particular deal, but we did spend quite some time in evaluating many deals before the first one came through.
What did you learn from your first investment? What advice would you give someone who is aspiring to do so?
I learned the process of “running the numbers” with (I think) understanding fully what each of them means and how they are related. I would recommend that anyone aspiring to do so learn to do the same. And to establish contact with people on the ground that will help out where needed.
Do you intend on focusing on the same type of properties for future investments (SFH, Duplex, Commercial)? Why/Why not?
No, there’s no need to box oneself in. I’m open to most opportunities, though I stay within what I (believe to) know, while in the background I try to stitch up the gaps in my knowledge.
What’s a common mistake noobie investors make?
I am a “noobie”. Going in without a plan would be the top of my list of potential mistakes. This is what we try to avoid.
Are there any tools you are using that have made your real estate endeavors easier?
I wrote some software that helps with the boring stuff, eliminating nonstarters. We can then focus on what remains.
Name your favorite Real Estate Book, podcast, or any other resource that made you a better investor?
“Real Estate Investor’s Deskbook” is probably the most useful so far. I read and follow the standard assembly of “entertainment” real estate books, forums and podcasts, but view those as a way to see what others are doing, not as much as a source of solid information. The most useful exercise has been to build an evaluation system for real estate investments from first principles, using what I think was learned in the process.
How do you evaluate properties? What are your requirements for investing?
Making an educated guess about financials eliminates 95% of candidate opportunities. Once those are eliminated, we take a second look with more precise information. We make offers if we think we can make at least 5% cash-on-cash return for the first year. This is a modest return by some measures, but we like to be conservative in what we estimate.
How did you determine the market/s to invest in?
By exhaustive search, weighed by how well we know the area.
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