Rental Property Investor · San Diego, CA · Member since 2014 · 1k+ posts · 2k+ votes
Why have you not sold, refinanced, or 1031 exchanged your pricey RE for more cash flow? I did and went from $50,000 cash flow to my current $120,000 cash flow and in 2 months moving to $160,000 cash flow. Would you have bought that rental property at these crazy high prices? I have to believe the answer would be, HECK NO!! Soooooooooo, why are you not 1031 exchanging or refinancing and getting more cash flow and deferring your taxes?
Philadelphia, PA · Member since 2017 · 140 posts · 37 votes
9y
Because i am a newbie and don't want to deal with risky tenants in cheaper areas. Maybe down the line as I get more experienced I would do 1031 or get a HELOC to invest in cheaper ,more chash flowing properties.
BTW does anybody have an experience in talking out a HELOC on investment property. How hard or easy was that?
I have 85 and soon to be 109 front doors in NE Ohio in 7 apartment complexes and NO I don't manage them. I have a property manager and have forced appreciation of about $400,000 on them since I have 1031 exchanged my pricey RE in San Diego for these apartment complexes. That cash flow, beginning in October will rise to $160,000. My goal is to have 1000 front doors, $750,000-$1,000,000.00 in cash flow, 50 million in total RE and 15 million in net worth. Right now we have 6 million in total RE and 2.5 million in Net Worth and through the power of the 1031 exchange, now have $120,000 cash flow after 6 years investing in RE. I will defer, defer, defer, defer, defer, and die and my kid will inherit at a stepped up basis and he can do the same.
Scott Trench and Brandon Turner just recorded a podcast with me for BP and it will air Aug 3rd. If I can do this with a combined family W2 yearly earnings of $80,000, anyone can.
"Reality is merely an illusion, albeit a very persistent one." Albert Einstein
"Whatever the mind can conceive and believe it can achieve." Napolean Hill in Think and Grow Rich book.
Rental Property Investor · San Diego, CA · Member since 2014 · 1k+ posts · 2k+ votes
9y
Hi @Account Closed
I read Multifamily millions by David Lindahl, also his emerging markets book, and Loopholes of RE by Garrett Sutton Rich Dad Robert Kiyosaki's personal tax adviser and the map is there that I followed. That's why I changed my paradigm away from single family to true Multifamily.
Rental Property Investor · San Diego, CA · Member since 2014 · 1k+ posts · 2k+ votes
9y
I understand @Account Closed
"Whatever the mind can conceive and believe it can achieve." Napolean Hill
That quote includes if you don't believe and conceive too. I know my 6 million in RE is real and my 2.5 million in net worth is real and my current cash flow of $120,000 a year moving to $160,000 is real. That's all that matters to me and my family.
We will be financially free by October. Consider the fact I only make $80,000.00 combined w2 family earnings as a parochial school teacher by day and an adjunct professor 2 nights a week during the school year. It is such a great feeling going to teach and know I don't have to go to work.
I read Multifamily millions by David Lindahl, also his emerging markets book, and Loopholes of RE by Garrett Sutton Rich Dad Robert Kiyosaki's personal tax adviser and the map is there that I followed. That's why I changed my paradigm away from single family to true Multifamily.
I love this stuff!!
Swanny
This right here above is brilliant.. if you cut through a lot of crap and stop wasting time, this is as concise advice i've seen on here in long time.
The only other tip i would recommend is to hustle hard to find someone who is doing this and utilize them for partnerships so they can bring most of the equity and networth requirements for loans for your deals. Identify them, ask them what they need help on in their business, work hard with them, by any means necessary forge a relationship.
Multi-Family Millions is pretty much the only blueprint you need, and making sure you select a market that allows for decent forced appreciation, so spend a little time analyzing the most important metrics for market selection. mainly job growth and not in a crazy low cap rate city.
These Cities are 80 / 20 of the best cities to invest in the next 10 years: 18 Hour cities
Austin
Charlotte
Nashville
Raleigh Durham, NC
Charleston, SC
Phoenix
Dallas
Reno
Orlando
Atlanta
Denver
Portland
Salt Lake City
Just pick ones closer to you, or move there, and then dive deep into submarkets and "up and coming" areas with hipsters etc.
Be careful of the sexy high priced areas. I have incredible cash flow and the area I invest is not on this list, although David Lindahl in his emerging markets new list, Cleveland is on his list of top 13 emerging markets as of May of 2017. I invest in suburbs in NE Ohio.
Philadelphia, PA · Member since 2017 · 140 posts · 37 votes
9y
The RE market here in Philadelphia is very expensive. And multifamily is so competitive. Every good deal is being snached by the cash buyers the first day it's on the market. How did you start investing in out of state? How did you learn the market? Do you have any friends or partners there?
Rental Property Investor · San Diego, CA · Member since 2014 · 1k+ posts · 2k+ votes
9y
hi @Account Closed
I had a colleague of mine that was originally from Euclid and her family moved to Lake County and her mom and step dad have a PM company in Lake County. She was telling me about what she was doing, I invested in a few single family with her parents as the PM and then bought a total of 8 single family. After that, I was getting more education etc... reached out to commercial brokers etc... and I was off to the races.
The more people you talk to the more connections you make. Building relationships is key and changing the way you look at things is key too.
If you change the way you look at things, the things you look at change right before your eyes.
My answer is super simple - how do I recoup my $200K day job if I move OOS to manage the 100 doors locally?
When you compare your $50K in San Diego vs. $160K in Ohio, did you count the day job that you gave up? Lol
Hire a good PM and keep your day job? So many people seem to think they have to manage a property hands on... don't discredit the value of a good PM. Sure you'll pay for it, but you'll also be able to keep your well paying day job.
Real Estate Agent · Richmond, CA · Member since 2017 · 61 posts · 27 votes
9y
@Michael Swan Very impressive and VERY encouraging!! "Where do I start?" is what I'm having a problem deciding. My sister just sold her RE in the Bay Area and we now have a little capital to get started with...we just don't want to make a bad decision. She seems to think we should invest closer to home. For a flip, that may be the thing to do so that we can be more hands on. As far as rental property goes for cash flow, Ohio is looking very attractive. I'm gonna go grab those two books you mentioned above and see what I can learn! Thanks Swanny!
Philadelphia, PA · Member since 2017 · 140 posts · 37 votes
9y
Could you Michael, give me exect zipcods in Ohio you're investing in. Just curious and want to look them up on realtor.com and compare to our prices.
And you are so right about the need to connect to as many people as possible. My husband and I came to America from the same country as Ben Leybovich and didn't know a single person here. We are trying to learn as much as possible about the markets and establish relationships. But we already started our RE journey. Bought two duplexes in Philadelphia. You are so right about the pricey property that doesn't bring a lot of chash flow.
Maybe you could recommend a good agent in Ohio, who works with invertors.
Go to my profile and give me a call. I would love to talk to you about opportunities. Too much typing here. I could say much more on a phone call and a lot t more interactive.
My answer is super simple - how do I recoup my $200K day job if I move OOS to manage the 100 doors locally?
When you compare your $50K in San Diego vs. $160K in Ohio, did you count the day job that you gave up? Lol
Hire a good PM and keep your day job? So many people seem to think they have to manage a property hands on... don't discredit the value of a good PM. Sure you'll pay for it, but you'll also be able to keep your well paying day job.
Another point to add is that the quality of the manager (and your control over that manager) increases drastically as you have more units under the door. For example, let's say you are the manager and you have: (1) one client that has 100 doors with you; and (2) another client that has 5 doors with you. As a manager, who are you going to prioritize? Ideally, you should try to deliver quality service to both. But most of us will focus on the client with 100 doors.
Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it as legal advice. Always consult with your attorney before you rely on the above information.
Well, you don't always need to have it under one roof. As long as they are in the general vicinity, you'll likely find a manager who will do a good job for you. I assume that is the case for you since you own 109 doors in NE Ohio. Not sure if you use one manager or several managers, but I assume they will do all that they can to keep you happy!
By the way, in terms of your original question, I suppose it depends on what you want to do. My family and I own real estate in the center of a very large city. Some are residential, some are commercial. Regardless of the type, the area will likely be one of the most desirable places to live in the world (short of a war or meteor falling). And that has certain benefits that I cannot get in the area that I currently live in (which is closer to NE Ohio). Not saying one is better than the other --- I think you can find success either way.
Another point to consider is that some people don't always invest in real-estate to get better returns. For example, consider wealthy foreign investors who invest in US real-estate using EB-5 visas. I would think most of them don't really care about returns --- their main investment goal is to get a green card for their families. I also know folks that just want to park money in a syndicated project for a few years. They'll happily accept return in the teens for tying up their money.
In any event, it sounds like you are doing very well! Look forward to listening to your podcast.
Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it as legal advice. Always consult with your attorney before you rely on the above information.