Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
5y
1. I recall a post you made a month ago talking about real estate just keeping up with inflation. If real estate merely paces inflation, how were able to make millions? (Obviously cash flow and debt pay down are other ways to make money in real estate, but that takes time.)
2. In the same post you seemed to advocate the stock market over real estate, claiming much more opportunity for upside. How much of your wealth came from real estate versus the stock market? (I am personally about 70% real estate and 30% stock market.) Maybe you can explain your thoughts on comparing the two?
3. What market did you start investing in real estate and how did you get funding to start?
4. How has your strategy changed over time and going forward? Are you changing markets or type of property (SFH vs MFH, etc.)?
@Jack B. Hello Jack I am starting out in real estate and I want to know what is the correct way to set up your first LLC to protect your new and old assets.
Property Manager · Member since 2020 · 3 posts · 3 votes
5y
@Jack B. First, thank you for offering your advice in this manner. Second, I currently own my home and am looking to purchase my first investment property. I am considering doing a couple of wholesale deals first, then purchasing a BRRR property, eventually working into multi family housing. Would you say that is a good plan? How did you begin?
Specialist · St. Petersburg, FL · Member since 2021 · 1 post · 2 votes
5y
Hello,
I’m currently assigned overseas in Europe at the time being, do you have any advice on buying property back in the states while currently away from your home of residence?
I’m active duty military, but my home is in FL, I’m married to another resident of FL and am fully capable of sending her back to look at places.
Have you dealt with investment property purchases out of your home state or living overseas before? I’m not entirely sure how I should go about it or if I just buy property in a different state entirely since I currently don’t even even live in my home state.
@Jack B. Hi! I’m a realtor in Houston, Tx and I’m looking to become an investor/developer. I currently have my eye on some land. ¼ of an acre and I’m thinking put a multi-family triplex maybe quad. I wouldn’t mind living in one. I’ve never owned a home. What steps do you think i should take to make it a reality?
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
5y
1. I recall a post you made a month ago talking about real estate just keeping up with inflation. If real estate merely paces inflation, how were able to make millions? (Obviously cash flow and debt pay down are other ways to make money in real estate, but that takes time.)
2. In the same post you seemed to advocate the stock market over real estate, claiming much more opportunity for upside. How much of your wealth came from real estate versus the stock market? (I am personally about 70% real estate and 30% stock market.) Maybe you can explain your thoughts on comparing the two?
3. What market did you start investing in real estate and how did you get funding to start?
4. How has your strategy changed over time and going forward? Are you changing markets or type of property (SFH vs MFH, etc.)?
Perhaps it’s like the YouTube guru I direct messaged recently who stated “my monthly income from rent is about $240,000”… while owning 3% of those properties…
Or, perhaps not?
It could be $1M+ positive cashflow annually.
Devil’s in the details as usual. Always ask what’s behind the curtain.
Rental Property Investor · Bethany Beach, DE · Member since 2020 · 10 posts · 4 votes
5y
@Jack B.
I’m 20yo working a restaurant job making maybe $3k/month and find myself surrounded by people I don’t like to hangout with because our goals are wayyy different. I want to grow a real estate portfolio and a business, but I’m not sure what I can do to find a new group of people in the place I want to be in the future. As Dan Pena say’s “Show me your friends, I’ll show you your future.” Just wondering what you would do in my position to find those high level individuals.
I am trying to get back into real estate investing. I bought my first property, a duplex, back in 2017 in CT and I still hold it. I recently moved to Los Angeles and currently renting here. I have saved up around $100k and I am interested in investing in multi-family real estate in LA ,but the housing price is very high and out of budget as you can’t find a decent property for less than $1M. I am looking for advise on how I can afford to buy multi-family property in LA. Any recommendations how I can kick real investing again.
Thanks
Mo
What you want and what you can afford are different things. It's like asking how to buy a Lamborghini with $100 down payment. You can't and shouldn't because you can't afford it. You need to have more reasonable expectations and go smaller. You can try to find a place to take over payments, owner financing, etc. But realistically if you can't put 25% down on a deal you're over leveraged and out of your depth, taking on too much risk. Circa 2008 crash.
I have a different take on this from being in this market. I agree buying existing multi-family in LA is expensive so if you can't buy it, build it. Look into the current CA ADU laws that allow you to convert a single family property into a multi-family by adding a second unit. You'll need to specify what part of LA you are looking at, but most likely your 100k will only get you as far as a down payment on a single family home, and you'll need to keep saving up or cash out refi your CT duplex to cover the build cost of the second unit but this should get you back on the path.
Thanks for doing this. What should I look out for (good or bad) when talking to banks about financing. Looking to BRRRR some small multi family houses soon. Thanks!
@Jack B.Appreciate the generosity of your time and wisdom.
But how much money do you take home every month in cold hard cash? How do you make cold hard cash from real estate? If I can't take money from real estate to Panda Express and by a three entree to go, I just don't care. Mr. Wonderful mindset.
I know people who live their lives with real estate that has "appreciated in value" but still don't have money to spend.
I have a property now that's valued at $415,000 and I got a mortgage for it 5 years ago for $280,000. I put maybe $3,000 into maintenance total. I'm also making about $10-15k a month from my day job. I'm very ready to make as many purchases as I can. Wondering what the best next steps would be.
Looks like I could do a cash out refinance for the house I currently have, but I'm not 100% sure if I should do that or just sell and use the equity to buy a few more properties to BRRRR. The house I have now is not really cash flowing at all, but it might be after a refinance, but not alot, maybe about $150 p/month.
I think I'm just asking for solid steps on what to do next. I want to have at least 10 more properties by the end of next year.
Real Estate Agent · Columbus, OH · Member since 2020 · 19 posts · 4 votes
5y
@Jack B. Why do you say not to do a HELOC? Is it just because of the interest payments associated with them or is there something else I'm not aware of?
Rental Property Investor · NJ · Member since 2020 · 18 posts · 13 votes
5y
@Jack B.
Hi, thank you for offering your help! I am currently 24 and looking to buy my first house hack sometime in 2022. I will have 30K cash saved by December and will be looking to get a 2-4 unit property. My eventual goal is to house hack for the next 3-5 years and by the end of it to have 10 doors. What do you think is the best strategy to go about this? I know it is hard to refinance out of a FHA loan with MPI. My original plan was to get a new house hack each year but after doing more research I know that will be difficult. Also, how much money would you suggest I have saved to purchase my first property? Thank you!
@Jack B. Hi jack, little late to the show. I'm a newbie wholesaler who's about to hit the ground running and was hoping to get clarification. Would I go to the title company to start escrow after I've assigned a contract with the seller, or would I wait til I have both buyer and seller under contract to then take to the title company? Thanks in advance!
If I just got $50k from a property should I use some of it to pay down my personal debt or just use it all to reinvest into another property?
Mathematically speaking, it depends how much your personal debt is costing you. If the rate of your personal debt is greater than the rate of return you could get investing in an investment vehicle, then paying off debt would make more sense. If your rate of return in your chosen investment vehicle is greater than your debt % rate, then invest and use the arbitrage to pay down the debt.
This has less to do with cash flow than your ability to do your own taxes. schedule E is not hard to figure out. It get's more complicated when you do 1031's. This has more to do with your own aptitude than money. I've corrected CPA's on three occasions. I lost faith in most of them unless they specialize in RE.
If I just got $50k from a property should I use some of it to pay down my personal debt or just use it all to reinvest into another property?
Mathematically speaking, it depends how much your personal debt is costing you. If the rate of your personal debt is greater than the rate of return you could get investing in an investment vehicle, then paying off debt would make more sense. If your rate of return in your chosen investment vehicle is greater than your debt % rate, then invest and use the arbitrage to pay down the debt.
Did you ever get that tenant that hadn't paid in over a year out? I remember your avatar...How did that end?
@Jack B. Hello Jack I am starting out in real estate and I want to know what is the correct way to set up your first LLC to protect your new and old assets.
LLC's don't provide the protection you think they do. You can't put a mortgaged property in an LLC and getting insurance is a problem. LLC's are easily pierced with charging orders. Get insurance and an attorney for asset protection advice.
@Jack B. First, thank you for offering your advice in this manner. Second, I currently own my home and am looking to purchase my first investment property. I am considering doing a couple of wholesale deals first, then purchasing a BRRR property, eventually working into multi family housing. Would you say that is a good plan? How did you begin?
I don't see anything wrong with your strategy, I know a girl in my area who does BRRR(R) [you missed an R] very successfully. It's a bit of a slow boat but if you lack capital, it works.