Doing Your First Deal by Marcus Lawson

July 23, 2019

 

Tonight's general meeting was a fantastic turnout! (Shout out to Michael Fabiano for helping us out with our tech glitch!)

 

Marcus Lawson went into details about his first deal. He walked us through how he found it, how he analyzed it (using his spreadsheet), how he manages his property, and the cashflow he's currently making. Marcus is the founder of the NJ Fire Starters. FIRE stands for Financial Independence, Retire Early. Retiring Early does not mean that you hate your job. Marcus loves his job as a pharmacist. He uses real estate investing and his side business to compliment his salary. FIRE allows him to not completely depend on his full-time job for income and to not settle on the long hours.

 

Marcus' PowerPoint Presentation

 

Marcus opened up saying that there's nothing special about him; anyone can get into real estate investing. He talked about paying down his student debt with the help of his excel sheet that helped track his expenses created an excel sheet to pay down his student debt.

 

 

Create Your Why

When you're dealing with real estate, everybody's heard about these horror stories, about bad tenants, bad experiences in fixing up properties ... It's important to understand why you're doing everything to push you through the difficulties and frustrations.

Write down your why.

 

Don't Let Your Job Dictate Your Life

Marcus walked us through his 10-hour shift work schedule, day by day.

"Who's the one in control?"

 

The FIRE Movement

Retire early doesn't have to mean actually retiring. It can be Retire-entreprenuer. Retire do what you want to do. It's just about being free.

 

Importance of a Good Realtor

  • Pay attention to rental comps.

  • Encouragement.

  • Create a team.

Financing

FHA Mortgage - Low money down; comes with PMI

Freddie MAC Home Possible Mortgage: Low money down - 5% down - great for good credit

Roselle Bank holds your mortgages. 10% down.

You'll need to house hack for these low-down payments. The most important thing is to pay your bills.

There are low down payment conventional mortgages. Do your research. Talk to banks.

Marcus has a Freddie MAC on the first property. 

 

Analyzing

Be honest about your real vacancy rate. Typical vacancy rate is 5%. If you're too conservative at 10%, then someone else will buy your property with realistic rates.

 

After all expenses, think about what you want. Marcus aimed for $100/unit in cashflow.

For a single family, perhaps you can aim for $150/unit.

 

Being Fair to a Property

Don't over-over analyze. With his first calculation, Marcus wouldn't have bought his first deal.

 

"There's a difference between being conservative and being wrong."

 

Make your property feel like a home. If people feel like it's their home, they will start treating like it is. Marcus's tenant started mowing the lawn even though Marcus planned to do it.

 

Like Dave Corsi said, when you get worksheets and spreadsheets that other people have created, make sure to look through it to understand it and feel free to make your own tweaks.

 

Here is the spreadsheet Marcus used to calculate his deal. He highlighted all the inputs.

 

Here is the spreadsheet he currently uses: 

 

Question to Marcus: Are you raising the rents annually?

Based on his conversations with other investors, he hasn't raised the rent this year. He could squeeze another$100/mo but

 

When you have great tenants, what's $100/mo versus vacancy.

 

He would probably raise it next year because his expenses are going up.

 

Resources

BiggerPockets

BiggerPockets Podcast: Look at the first 200, where it's replicatable.

Rich Dad, Poor Dad (Mindset book)

Set for Life by Scott Trench

How to Manage Rental Properties by Brandon Turner

Buy, Rehab, Rent, Refinance, Repeat by David Greene ("THAT is GOLD!" - Marcus)

The Rehab Investing Bible

Everything You Need to Know About Cashflow

 

The FIRE Movement

Monthly meeting led by Marcus.

There is a new American dream, one where you’re not sitting in that job you hate for the next 40 years! Learn to become financially independent. Learn to be free! Time is our most valuable resource, so claim back the best years of our lives!Join the New Jersey FIRE (Financial Independence Retire Early) starters. This group is focused purely on financial independence. We go through topics such as: travel rewards through credit cards, best frugal tactics, debt repayment, retirement, index investing, real estate, and many other cool life hacks.This meetup is designed to bring members of the FIRE community together. We want to bring likeminded individuals together to have an open discussion as well as to provide an environment that is focused on sharing.

 

Join the NJ FIRE Starters Facebook Group

 

Marcus on FIRE, Financial Independence Retire Early:

"It doesn't mean you hate your job. It's about designing your life and having the ability to say NO."

 

"Control your expenses. It is about being free."

Next meeting for NJ FIRE Starters:

Thursday, July 25, 2019

6:30pm-8:30pm

Linden Public Library, 31 E Henry ST, Linden, NJ 07036

 

MARCUS LAWSON, PHARMD

Dr. Marcus Lawson, PharmD, is a newcomer to the world of real estate. He is the pharmacist-in-charge at Walgreens in Vauxhall and wants to use real estate to establish financial freedom from the corporate world. He joined Bigger Pockets, MREIA, and then started his own two meetups: Northeastern NJ Real Estate meetup and NJ FIRE in Linden, NJ. He is currently house-hacking his first investment property and is on the lookout for his second property.

 

For info on investing, wholesaling, creative financing, and FIRE, you can reach Marcus at mtlawson90@gmail.com

 

 

 

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