A real estate investor who made 1.5 million in 2021 makes it clear what he is looking for before buying a property: 'I don't buy old buildings'

 

When it comes to buying real estate, Todd Baldwin credits his success with real estate.

The investor buys in traditionally neglected neighborhoods that show signs of new developments.

He also prefers new constructions and especially seeks a two to one ratio of bathroom to bedroom.

Todd Baldwin is building ethnic wealth by investing in real estate.

The 29-year-old college dropout began his career in insurance sales. He said he earned six figures a year thanks to a 9 to 5 job that introduced the commission structure and by spending extra hours in that role, he said, and used his savings to buy his first property. For what Age 23

"My job got me to where I am today, but I wasn't happy doing it," Baldwin, who dropped out of his 9-to-5 in 2020, told Insider. "About a year ago, I was making so much money in real estate that I no longer needed it."

In 2021, the Seattle-based investor made a profit of more than 1.5 1.5 million from real estate sales, wholesale deals and rental income. Insiders saw copies of the seller's statements and payments from tenants who confirmed the details.

He said Baldwin sold five properties last year, including the first home he bought in 2015 for $ 506,000. It sold for $ 875,000, which is about $ 370,000. "Needless to say, the total rental income from this house was about ً 70,000 a year, so there was a net profit of about $ 25,000 a year."

He and his wife, Angela, agreed that this was the best time to sell. They said: "The real estate market has gone through the roof. We have to sell, cash out and invest in other projects. Saw the opportunity, and that's part of it. Strategy: We buy homes in low-cost areas that are undergoing relocation, and when the relocation is nearing completion or nearing completion, we can sell at a huge profit. . "

Currently, the couple owns a property: a duplex that they converted from a garage into a studio apartment into a "triplex". They live in a duplex unit and rent the other half apart from the garage space. The rental income they collect covers the mortgage, which allows them to live in their home for free.

Baldwin is always looking for real estate to invest in, even in today's market.

"I know the interest rate is incredibly high at the moment, but if I get a deal I want, I'll take it," he said. "I have at least a million dollars in cash - whether it's down payment or cash for a property - so I'm willing to pull the trigger on something that makes sense. I'm not in any hurry. "

If you want to be a successful real estate investor, "it's really important to know your market," said Baldwin, who prefers to invest in properties just outside of Seattle.

"The property needs to be in a low-cost area that is undergoing relocation," he said. To explore these areas, he spends hours driving in neighborhoods that have traditionally been overlooked and looking for signs of development. For example, if he sees new libraries, community centers, or breweries popping up, this might be a good place to shop.

Baldwin and his wife, Angela, live in their home for free through hacking. Thanks to Todd Baldwin

"Most people will buy the worst house in the best neighborhood," Baldwin added. "I bought good homes in neglected neighborhoods." But I did it only because of the progress I saw. "

He did this with the place where he and his wife currently live. Baldwin said the area he uses is called the "rat town", but when he decided to buy it in 2019, he saw signs of life. His observation was correct, and thanks to recent developments, the value of his property has already risen: Duplex, which he bought for $ 900,000, was estimated at 21 1.4 million in 2021, he said.

High property values ​​have displaced long-term residents in some neighborhoods, although experts have identified ways to mitigate the consequences, including passing new zoning laws, taxing vacant properties, and raising funds. So that residents can buy land.

As for the specific features he is looking for in a property, Baldwin is currently looking for multi-family homes. And he wants brand new or relatively new construction, he said: "I don't buy old buildings." He does not want to worry about possible violations of the housing code. With a new construction, the possibilities are, "no wonder."

Baldwin also wants at least two parking spaces for each unit: "So, if this is a 50-unit apartment building, I need 100 parking spaces. If it's a house I rent from the bedroom. So I need one parking space for everyone. Bedroom for rent. So, if there are nine bedrooms for rent, then I need nine parking spaces. "

Another deal breaker is the Home Owners Association (HOA) fee. "I don't buy anything at HOA," he said.

In an ideal world, the ratio of bedroom to bathroom is two to one. "An eight-bedroom home should have at least four bathrooms," he explained. "As pleasant as that, but at least four."

Baldwin recognized that he was the picker. In fact, he hasn't been able to find a property he can buy in over two years.

"I haven't bought real estate since 2019," he said. "It's not because I'm afraid of the market or because I'm in a slump in real estate; it's just because I'm very specific with my standards. But it's part of the reason I Great job - I only buy certain properties. "