Real Estate Investing 101 for Engineers – Ep 073

In this session of The Engineering Career Coach Podcast, I am going to share with you my experiences on real estate investing along with my guest Vittorio Anepete, who is an engineer and a member of our Engineering Career Community.

“Now, one thing I tell everyone is learn about real estate. Repeat after me: real estate provides the highest returns, the greatest values and the least risk.” – Armstrong Williams

In the Take Action Today segment of the show, I am going to give you a piece of advice that you can implement if you are thinking of investing in real estate.

Vittorio is a licensed professional engineer experienced in scoping and design of numerous roadway projects including geometric design, roadside design, storm-water management, utility exploration and engineering, right-of-way engineering, traffic control, highway access design, and construction inspection. He is currently a senior project engineer for McCormick Taylor. He has worked with NJDOT, NJ Turnpike Authority, and several county transportation departments. Vittorio is proficient with industry leading design and modeling software.

Listen to this session and learn how to start investing in real estate:

Reasons why real estate is a most “able” investment (From Gary Keller’s Book “Millionaire Real Estate Investor”):

• Accessible – Anyone can buy it
• Appreciable – Increases in value over time
• Leveragable – Buy on margin & borrow against equity
• Rentable – Cash Flow!
• Improvable – Sweat equity
• Deductible/Depreciable/Deferrable – Great tax benefits
• Stable – Slow to rise & slow to fall
• Livable – Shelter in more ways than one.

Real Estate Investment Strategies:

1. Wholesaling – Fund the deal and sell it to another investor for a fee
2. Rehab/Flip/Buy-Fix-Sell – Buy a property at a significant discount that needs work, hire contractor to fix the property, and sell it at a higher price
3. Lease Option – Offer to lease and an option to own it (rent-to-own)
4. Buy and Hold (Rentals) – Buy a property and renting it out to cover the mortgage

Tips on Rental Properties:

1. Ensure you have enough capital before you even start (e.g. money to pay your down payment, repairs, insurance, utilities, cash reserves for unexpected vacancy or repairs)
2. Know your numbers like your Maximum Allowable Offer (MAO) – what will your payment be with insurance and taxes and what rent can you get (be conservative)
3. Location, Location, Location.
   1. Rental desirability
   2. Close to major city/employment
   3. Proximity to public transportation
   4. Proximity to colleges
4. Try to keep the property as close as possible to your primary residence.
5. Consider multi-units to minimize risk if one tenant leaves, but keep in mind the exit strategy.
6. Be prepared to deal with tenants. Be fair, firm and responsive.
7. Have a good lease and set criteria and processes.
   • Set your screening criteria
   • Know the laws in you state (security deposit law)
   • Hire a professional
   • Find a landlord/tenant attorney in your county
8. Keep good records. Document all correspondence with town/municipality, and tenants. Save all receipts for expenses.
9. Inspect property often.
10. Don’t try to do it all yourself. Have a list of go-to people (attorneys, accountants, realtors, handymen, etc.)

Books mentioned in this session include:

The Shoemaker’s Wife

Millionaire Real Estate Investor

ABCs of Real Estate and Investing

Rich Dad Poor Dad

Resources and links mentioned in this session include:

Ancestry.com
TECC 65: Personal Finance for Engineers
Buildium – Property Management Software
Prepaid Legal
Evernote
Camscanner
Engineering Career Community

Sponsor for this session:

PPI2Pass Review Courses for FE, PE, and SE Exams

Have you thought about investing in real estate?

We would love to hear any questions you might have or stories you might share on how this episode have helped you jump start your real estate investing.

Please leave your comments, feedback or questions in the section below.