Why You Shouldn't Leverage When Investing In Turnkey Rentals

82 Replies

CASH IS KING!!!

G'Day everyone,

I'm going out on a limb here so before you condemn my thoughts at least have a read and try to understand them.

Why does modern day society always want more more and more? GREED that is why. 

Human behavior always traps us in vicious cycles, where cash is only used as a stepping stone for more leverage. In all reality is turnkey real estate that good of an investment when you borrow at 5% and try to make 8-10%? I’d say not so much and that's why I have turned down millions in profit over the years from investors looking to finance.

Does everyone forget that we just hit the 10 year anniversary of the financial crisis that led to people buying so many homes with so much leverage forgetting that if their income changes one blip it all goes to [email protected]#%?

Maybe we should revert back to patience and discipline when purchasing a home. Realizing that we should start with one and not 17.

Learn what it is like to be a landlord, and have a property manager manage the day to day.

Being conservative is never going to make you the next Bill Gates, but remember the majority of ones wealth is created by their occupation as opposed to a levered portfolio of homes.

Think of your next property as a conservative investment, one that is entirely paid off, so if for some reason the economy takes a turn or you have a month or two with no tenant you will sleep just fine.

All good things take time so where is the rush anyway?

I see the market getting stupid again and many don't have any pants on.

It won't be a pretty site when the tied goes out again.

Your truly favorite Aussie,

Engelo Rumora - The Dingo

Originally posted by @Jim C. :

My rush is age, I dont have much time to start some sort of passive income that will leave me financially comfortable within the next few years

Stay patient and diligent Jim,

It's better to take extra long and make the right decision than to rush and make a mistake.

I'm still trying to master this myself.

Thanks

@Engelo Rumora

I'm going to disagree with almost the entirely of your post. The key to leverage is moderate leverage. Don't buy everything at 95 LTV. Do 25-40 percent down payments.

The chances we see another GFC in our lifetime is unlikely. Keep in mind the events leading up to that recession took 30-40 years to materialize. (Thanks big short). So if history repeats itself we have another 20-30 years.

As far buying turnkey properties in cash, I think that’s also a bad idea. You likely won’t get an appraisal and you’ll likely overpay by a lot. When you finance the bank (with all that pesky paperwork) has a lot of build in things (like an appraisal) that limits your/their risk. Use high downpayments and your risk is even less.

Almost any turnkey company that only accepts cash purchases, throws off huge red flags in my mind as it likely means you’ll be overpaying by a lot. I know there are arguments to both sides of every coin but with the whole Morris invest debacle (who only accepted cash buys) it’s gonna be hard to override my opinion on this, especially if you’re dealing in sub 50k purchases

Originally posted by @Caleb Heimsoth :
@Engelo Rumora

I'm going to disagree with almost the entirely of your post. The key to leverage is moderate leverage. Don't buy everything at 95 LTV. Do 25-40 percent down payments.

The chances we see another GFC in our lifetime is unlikely. Keep in mind the events leading up to that recession took 30-40 years to materialize. (Thanks big short). So if history repeats itself we have another 20-30 years.

As far buying turnkey properties in cash, I think that’s also a bad idea. You likely won’t get an appraisal and you’ll likely overpay by a lot. When you finance the bank (with all that pesky paperwork) has a lot of build in things (like an appraisal) that limits your/their risk. Use high downpayments and your risk is even less.

Almost any turnkey company that only accepts cash purchases, throws off huge red flags in my mind as it likely means you’ll be overpaying by a lot. I know there are arguments to both sides of every coin but with the whole Morris invest debacle (who only accepted cash buys) it’s gonna be hard to override my opinion on this, especially if you’re dealing in sub 50k purchases

well most folks that follow me on BP know my stance... I will say though the thought that your over paying just because you pay cash.. I don't quite go with that one.. you can get a desk top appraisal for 150 bucks if your worried about values.. and with the internet these days you can comp .. and of course you could pay a local broker 100 bucks or so to send you MLS comps or a BPO .. all those things will help you with valuations.. Even in my new construction business we get one cash sale these days out of about 10... and these are 450k homes and up.. I just put my big epic new build in Charleston into escrow at 2.2 million cash.. In hot markets the cash buyers are specific they are not making their purchase based on appraisals.. now I don't know if these folks will spend the money to appraise this or if any of my cash buyers did appraisals.. but its pretty easy to establish values..

However on the flip side leverage is a necessary evil.. to scale we all know this.. 

Originally posted by @Jay Hinrichs :
Originally posted by @Caleb Heimsoth:
@Engelo Rumora

I'm going to disagree with almost the entirely of your post. The key to leverage is moderate leverage. Don't buy everything at 95 LTV. Do 25-40 percent down payments.

The chances we see another GFC in our lifetime is unlikely. Keep in mind the events leading up to that recession took 30-40 years to materialize. (Thanks big short). So if history repeats itself we have another 20-30 years.

As far buying turnkey properties in cash, I think that’s also a bad idea. You likely won’t get an appraisal and you’ll likely overpay by a lot. When you finance the bank (with all that pesky paperwork) has a lot of build in things (like an appraisal) that limits your/their risk. Use high downpayments and your risk is even less.

Almost any turnkey company that only accepts cash purchases, throws off huge red flags in my mind as it likely means you’ll be overpaying by a lot. I know there are arguments to both sides of every coin but with the whole Morris invest debacle (who only accepted cash buys) it’s gonna be hard to override my opinion on this, especially if you’re dealing in sub 50k purchases

well most folks that follow me on BP know my stance... I will say though the thought that your over paying just because you pay cash.. I don't quite go with that one.. you can get a desk top appraisal for 150 bucks if your worried about values.. and with the internet these days you can comp .. and of course you could pay a local broker 100 bucks or so to send you MLS comps or a BPO .. all those things will help you with valuations.. Even in my new construction business we get one cash sale these days out of about 10... and these are 450k homes and up.. I just put my big epic new build in Charleston into escrow at 2.2 million cash.. In hot markets the cash buyers are specific they are not making their purchase based on appraisals.. now I don't know if these folks will spend the money to appraise this or if any of my cash buyers did appraisals.. but its pretty easy to establish values..

However on the flip side leverage is a necessary evil.. to scale we all know this.. 

that’s true as far as getting a cheaper appraisal then full appraisal.  I was mainly speaking to the lower income assets in the 50k range.  That’s very different then a 500k new build. 

Originally posted by @Caleb Heimsoth :
Originally posted by @Jay Hinrichs:
Originally posted by @Caleb Heimsoth:
@Engelo Rumora

I'm going to disagree with almost the entirely of your post. The key to leverage is moderate leverage. Don't buy everything at 95 LTV. Do 25-40 percent down payments.

The chances we see another GFC in our lifetime is unlikely. Keep in mind the events leading up to that recession took 30-40 years to materialize. (Thanks big short). So if history repeats itself we have another 20-30 years.

As far buying turnkey properties in cash, I think that’s also a bad idea. You likely won’t get an appraisal and you’ll likely overpay by a lot. When you finance the bank (with all that pesky paperwork) has a lot of build in things (like an appraisal) that limits your/their risk. Use high downpayments and your risk is even less.

Almost any turnkey company that only accepts cash purchases, throws off huge red flags in my mind as it likely means you’ll be overpaying by a lot. I know there are arguments to both sides of every coin but with the whole Morris invest debacle (who only accepted cash buys) it’s gonna be hard to override my opinion on this, especially if you’re dealing in sub 50k purchases

well most folks that follow me on BP know my stance... I will say though the thought that your over paying just because you pay cash.. I don't quite go with that one.. you can get a desk top appraisal for 150 bucks if your worried about values.. and with the internet these days you can comp .. and of course you could pay a local broker 100 bucks or so to send you MLS comps or a BPO .. all those things will help you with valuations.. Even in my new construction business we get one cash sale these days out of about 10... and these are 450k homes and up.. I just put my big epic new build in Charleston into escrow at 2.2 million cash.. In hot markets the cash buyers are specific they are not making their purchase based on appraisals.. now I don't know if these folks will spend the money to appraise this or if any of my cash buyers did appraisals.. but its pretty easy to establish values..

However on the flip side leverage is a necessary evil.. to scale we all know this.. 

that’s true as far as getting a cheaper appraisal then full appraisal.  I was mainly speaking to the lower income assets in the 50k range.  That’s very different then a 500k new build. 

 IN my mind these days any rental property under 100k is worth what someone will pay for it.. since literally NONE of them get sold to homeowners only investors.. so the valuations are backed into by rental income more like Cap rate for MF.. its what ever an investor is willing to pay for a given cash flow.

@Engelo Rumora Engelo, Wouldn’t you say that real estate is the best chance for an average joe to take a shot. I like real estate because you win on so many levels. We’ve all heard the IDEAL metaphor. I-income from the rents D- Depreciation (ensures we pay little to no tax on the income) E-Equity as your renters pay off your loan A-appreciation in the right market your property should appreciate over time L-Leverage( the ability to gain a return on 3-5 times of my original investment) Using leverage gives you the opportunity to diversify, instead of all my cash in one property I can spread that cash out on 3-5 properties which mitigates my risk. I also receive 3-5 the return which allows me to build my cash reserves faster allowing to absorb any sort of vacancy. To your point about the current market I do think there are a lot of people buying clear blue sky and hoping appreciation is going to bail them out.

There is joy in the journey. 

Your post reminds me of the old adage of slow and steady winning the race. I don't know if it is always true but I certainly believe that bad debt, stupid debt, greedy debt, can sink people quickly.

@Luke Sass good points. But I always feel overextension of credit and frothy optimism never have a defined endpoint and lead to gamblers ruin. So for those margining their equity and making mad money during a bull run do they really ever cash out before the market inverts? It always seems like the get rich fasr crowd is doomed to moroh into be the get poor fast crowed because they have no calculated gamble defined or endgame deliminated
@Steve B. Well put which is why you should use leverage responsibility, stick to your numbers and underwrite so that your properties can withstand a significant market correction. I don’t necessarIly associate leverage wIth greed I think the distinction needs to be made between the residential properties and commercial multi families in commercial no matter how good an operator you are if your balloon payment comes due in the depths of a recession where capital markets have dried up your probably French Toast. Does this mean you were greedy? I don’t think it does...

I think taking the risk of investing and using real estate without leverage is just stupid. If you're just using cash then invest in something truly passive. But to ignore the benefits of leverage in real estate is foolish. 

Not as foolish as buying turnkey of course where you need 20 years for the property to be worth what you paid for it :-).

The ability to obtain low interest 30yr fixed rate loans is what differentiates real estate as an investment vehicle. If my options are for $75,000 are a Cleveland duplex that rents for $1,300/mo with an indefinite hold period or $75,000 to spend on some other income stream I am probably going with the other income stream. 

However the tide totally turns who you are able to buy that same $75,000 duplex for $18,750 with someone else lending you the other $56,250 & some other folks paying that loan off for you.

@Engelo Rumora I think the assumption that you are borrowing at 5% to make 8-10% is the error in your thinking. Sure, the cash on cash return may be 10%, but what about the tax benefits? What about appreciation? What about asset protection? I Believe there is much more risk in cash purchases that using responsible leverage.

@Engelo Rumora

My CPA saying that investment properties is used to reduce one's tax is taxwise. Buy a small house not to deal in MF which can be problematic if mismanaged. I have seen two people invest out of State MF and their property manager took the money ran south and changed the title to theirs. 

A local flipper quit her high tech job borrowing HM with 10% down. She has been lucky so far in 2 years with each flip returning more than her techie working for the entire year.  The market cooling is coming this way. She is not selling her home quickly. It was one weekend of marketing. Now is 40+ days still no offer. The 12-15% interest will add up fast. I imagine she will drop out of the flipping business when the recession hits here.  A good thing normally does not last forever. 

Same with investment. Most use their savings to predict the market. Some borrow on margin and try to play against odds. The Big Short is about someone I know personally. When common sense tells you something is not right just do not fall into the trap.

Updated almost 3 years ago

Well said. Many will disagree and the more experienced will see through. Thanks

Originally posted by @Luke Sass :
@Engelo Rumora Engelo, Wouldn’t you say that real estate is the best chance for an average joe to take a shot. I like real estate because you win on so many levels. We’ve all heard the IDEAL metaphor.

I-income from the rents D- Depreciation (ensures we pay little to no tax on the income) E-Equity as your renters pay off your loan A-appreciation in the right market your property should appreciate over time L-Leverage( the ability to gain a return on 3-5 times of my original investment)

Using leverage gives you the opportunity to diversify, instead of all my cash in one property I can spread that cash out on 3-5 properties which mitigates my risk. I also receive 3-5 the return which allows me to build my cash reserves faster allowing to absorb any sort of vacancy.

To your point about the current market I do think there are a lot of people buying clear blue sky and hoping appreciation is going to bail them out.

 Well I think what Engelo is alluding to.. is that max debt in a down turn can be unsustainable to some and lead to the loss of this dream

lets go back to 2002 when I started funding turn key companies in the mid west and really got into the rental side of things.. ( and this was regional)  in 08 I had 465 investor loans out to mainly west coast folks who had bought in 10 states in the mid west and deep south.)

and here is how all those went.. I put up the HML to put them into title the buyer only needed 1k out of pocket and a 700 fico and my turn key providers and take out lenders would provide the homes. this was and is the BRRR strategy.. we were doing it way before it got coined on BP in fact I did well over 2,000 of them.. Anyway.. so now the buyer refinances and had 25% equity and cash out.. and none of their own money in the deal.. and they cash flowed 100 to 150 a door.. sounds great right exactly what everyone wants to do today.

well in 2010 by the time I was done foreclosing on all those west coast folks that could not refi ( because refi loans froze) and tenants stopped paying no income ) I ended up owning about 200 of these homes.. had they paid cash or had little debt they could have rode it through but no everyone had MAX debt and wanted as many doors as possible.. so many of these folks got crushed.. now granted it was the banks that took the huge loss and myself.. as they had little money into the deals.. but they lost their credit they had major stress.. divorces etc etc.. Am I predicting this again no.. and so what Engelo is saying is there Is moderation here and we are right back to those thinking that max debt is something to achieve with no history of what happens in a hiccup.. 25% equity in a property in a buyers market is NO equity its gone.. and if you put the cash up its a double whammy .. if your rental is vacant and you cant pay the mortgage.. your credit goes along with all your cash.. your recapture of depreciation and your threat of a 1099 C debt relief.. 

So obviously that was a doomsday event that happened and I live through personally... not predicting this.. but for me personally highly leveraged rentals there is some risk.. and again this is very regional.. in our area here we came through it OK in other areas were west coast folks are flocking to.. not so much.. 

@Jay Hinrichs @Jay Hinrichs Jay, Yes I agree whole heartedly with you that in a massive economic downturn if your in the wrong market its over. I think that even max leverage, underwritten responsible is acceptable risk do you agree? For the sake of an argument I would say it was greed from the banks more so than from the borrowers -A lot of what caused the last downturn was driven by the lenders (mortgage backed securities, Credit default swaps, horrible or no underwriting on these mortgages) -Was your only criteria for a mortgage a $1,000 and a 700 fico? -what type of mortgages did you have on the properties were they 30 yr conventional? Any ARM’s?
Originally posted by @Luke Sass :
@Jay Hinrichs @Jay Hinrichs Jay, Yes I agree whole heartedly with you that in a massive economic downturn if your in the wrong market its over. I think that even max leverage, underwritten responsible is acceptable risk do you agree? For the sake of an argument I would say it was greed from the banks more so than from the borrowers

-A lot of what caused the last downturn was driven by the lenders (mortgage backed securities, Credit default swaps, horrible or no underwriting on these mortgages)

-Was your only criteria for a mortgage a $1,000 and a 700 fico? -what type of mortgages did you have on the properties were they 30 yr conventional? Any ARM's?

we were short term HML first position .. and for about 6 years my average turn time on loans was under 95 days.. we made the loans based on the fico and the borrower had been through underwriting with a mortgage company and was approved just subject to the 442 reinspect.. we got paid off by refi's.. When investor loans Froze and they frozen like the Antarctic prior to global warming.. everyone was stuck.... every lender in real estate was affected.. good bad great not so great.. and again I am not predicting this..

But even those with 30 year nice loans got hammered.. I had clients that I sold property to in the Couv I brokered 22 duplexs off of Mill Plain to a bunch of bay area folks .. those rode through these same folks bought 4 plexs in PHX AZ and those units when 100% vacant in 08 to 2010 and they lost them to the bank.. they lost their equity and their credit got crushed.. and these are professionals.. One is was a Lawyer the other did 1031 exchanges for Chicago title.. etc etc and many more.. the Vancouver ones held I don't think anyone lost those we were somewhat ammune here in the northwest.. builders got hammered as you know.. and some lot developers.. but rentals kind of rode through better than some assets.. but in other parts of the country you cant fix 100% vacant.. and when you have max debt you have max stress and then foreclosures.. fully 50% of the foreclosures in those areas were investor losing their rentals.. were do you think all this inventory comes from or has come from..

And as Engelo can attest one of the reasons the mid west has firmed up is that 30 to 40% of all these homes that got bought by foreigners or hedge funds etc.. has been bought in cash.. its only the American investors  that really subscribe to the Max debt theories..  

@Jay Hinrichs Agreed in the last downturn even the good operators got burned. I feel like they got burned because of novice/in experienced investors were given the opportunity to leverage much more than they should have as the people giving them the loans were typically selling them and making money off the transaction fees. A lot of mortgage companies weren’t underwriting like they should have been. This caused the bubble There’s a difference between investing (taking a calculated/educated risk) and gambling (buying something because they will let you).
Originally posted by @Caleb Heimsoth :
@Engelo Rumora

I'm going to disagree with almost the entirely of your post. The key to leverage is moderate leverage. Don't buy everything at 95 LTV. Do 25-40 percent down payments.

The chances we see another GFC in our lifetime is unlikely. Keep in mind the events leading up to that recession took 30-40 years to materialize. (Thanks big short). So if history repeats itself we have another 20-30 years.

As far buying turnkey properties in cash, I think that’s also a bad idea. You likely won’t get an appraisal and you’ll likely overpay by a lot. When you finance the bank (with all that pesky paperwork) has a lot of build in things (like an appraisal) that limits your/their risk. Use high downpayments and your risk is even less.

Almost any turnkey company that only accepts cash purchases, throws off huge red flags in my mind as it likely means you’ll be overpaying by a lot. I know there are arguments to both sides of every coin but with the whole Morris invest debacle (who only accepted cash buys) it’s gonna be hard to override my opinion on this, especially if you’re dealing in sub 50k purchases

Thanks for your comment.

Over the years I've gained a tonne of insight into how companies operate and it's not what you think.

To this day, I don't know of many turnkey companies that are offering finance on their deals where investors still don't over pay for the property.

The biggest and the best in the industry control the entire finance process and know tricks on how to influence appraisals.

Like selling for cash at higher than market value and "booking" in the sale on the MLS.

The hundreds of cash comps are then used to pull up the value when someone is looking to finance.

They single handedly over inflate the value in an area by doing this.

I don't even want to start on how they also exclusively use local community banks that will "dance to their beat" as they get millions in new loans every month.

Finding the right team and working with the right people is the key to success in turnkey.

If you think an appraiser or building inspector are protecting your best interests than you are wrong in my opinion.

Spend the time in finding the right people/company and you will do well.

DON'T INVEST until you find the right people no matter how long it takes.

Much success 

Originally posted by @Luke Sass :
@Jay Hinrichs Agreed in the last downturn even the good operators got burned. I feel like they got burned because of novice/in experienced investors were given the opportunity to leverage much more than they should have as the people giving them the loans were typically selling them and making money off the transaction fees. A lot of mortgage companies weren’t underwriting like they should have been. This caused the bubble

There’s a difference between investing (taking a calculated/educated risk) and gambling (buying something because they will let you).

 which is exactly where we are today.. people have to start somewhere and so as soon as they get 20k in their pocket its ( lets go buy a rental LOL)

Originally posted by @Jay Hinrichs :
Originally posted by @Caleb Heimsoth:
@Engelo Rumora

I'm going to disagree with almost the entirely of your post. The key to leverage is moderate leverage. Don't buy everything at 95 LTV. Do 25-40 percent down payments.

The chances we see another GFC in our lifetime is unlikely. Keep in mind the events leading up to that recession took 30-40 years to materialize. (Thanks big short). So if history repeats itself we have another 20-30 years.

As far buying turnkey properties in cash, I think that’s also a bad idea. You likely won’t get an appraisal and you’ll likely overpay by a lot. When you finance the bank (with all that pesky paperwork) has a lot of build in things (like an appraisal) that limits your/their risk. Use high downpayments and your risk is even less.

Almost any turnkey company that only accepts cash purchases, throws off huge red flags in my mind as it likely means you’ll be overpaying by a lot. I know there are arguments to both sides of every coin but with the whole Morris invest debacle (who only accepted cash buys) it’s gonna be hard to override my opinion on this, especially if you’re dealing in sub 50k purchases

well most folks that follow me on BP know my stance... I will say though the thought that your over paying just because you pay cash.. I don't quite go with that one.. you can get a desk top appraisal for 150 bucks if your worried about values.. and with the internet these days you can comp .. and of course you could pay a local broker 100 bucks or so to send you MLS comps or a BPO .. all those things will help you with valuations.. Even in my new construction business we get one cash sale these days out of about 10... and these are 450k homes and up.. I just put my big epic new build in Charleston into escrow at 2.2 million cash.. In hot markets the cash buyers are specific they are not making their purchase based on appraisals.. now I don't know if these folks will spend the money to appraise this or if any of my cash buyers did appraisals.. but its pretty easy to establish values..

However on the flip side leverage is a necessary evil.. to scale we all know this.. 

Thanks Jay,

As I mentioned in my reply to Caleb.

Influencing an appraisal is a walk in the park.

If you buy cash or even with finance it doesn't matter.

Find the right people who's ethics are through the roof and that have a proven track record.

I'll take it as far and say that even if a turnkey company sells you a property for more than what it's worth.

As long as they are willing to go along for the long haul ride, then you are good.

There are too many operators that will just flog the product and disappear soon after.

Turnkey real estate is about cashflow.

If you want fat equity in a deal or a "Deal Of The Century" type property.

Don't buy turnkey and do the work yourself.

Just my opinion

Thanks again mate

Originally posted by @Jay Hinrichs :
Originally posted by @Caleb Heimsoth:
Originally posted by @Jay Hinrichs:
Originally posted by @Caleb Heimsoth:
@Engelo Rumora

I'm going to disagree with almost the entirely of your post. The key to leverage is moderate leverage. Don't buy everything at 95 LTV. Do 25-40 percent down payments.

The chances we see another GFC in our lifetime is unlikely. Keep in mind the events leading up to that recession took 30-40 years to materialize. (Thanks big short). So if history repeats itself we have another 20-30 years.

As far buying turnkey properties in cash, I think that’s also a bad idea. You likely won’t get an appraisal and you’ll likely overpay by a lot. When you finance the bank (with all that pesky paperwork) has a lot of build in things (like an appraisal) that limits your/their risk. Use high downpayments and your risk is even less.

Almost any turnkey company that only accepts cash purchases, throws off huge red flags in my mind as it likely means you’ll be overpaying by a lot. I know there are arguments to both sides of every coin but with the whole Morris invest debacle (who only accepted cash buys) it’s gonna be hard to override my opinion on this, especially if you’re dealing in sub 50k purchases

well most folks that follow me on BP know my stance... I will say though the thought that your over paying just because you pay cash.. I don't quite go with that one.. you can get a desk top appraisal for 150 bucks if your worried about values.. and with the internet these days you can comp .. and of course you could pay a local broker 100 bucks or so to send you MLS comps or a BPO .. all those things will help you with valuations.. Even in my new construction business we get one cash sale these days out of about 10... and these are 450k homes and up.. I just put my big epic new build in Charleston into escrow at 2.2 million cash.. In hot markets the cash buyers are specific they are not making their purchase based on appraisals.. now I don't know if these folks will spend the money to appraise this or if any of my cash buyers did appraisals.. but its pretty easy to establish values..

However on the flip side leverage is a necessary evil.. to scale we all know this.. 

that’s true as far as getting a cheaper appraisal then full appraisal.  I was mainly speaking to the lower income assets in the 50k range.  That’s very different then a 500k new build. 

 IN my mind these days any rental property under 100k is worth what someone will pay for it.. since literally NONE of them get sold to homeowners only investors.. so the valuations are backed into by rental income more like Cap rate for MF.. its what ever an investor is willing to pay for a given cash flow.

Hi Jay,

All of my areas in Toledo are heavily owner occupied.

They are also all under $100,000.

It's great to be here and we have had quite the monopoly for many years now.

Hedge funds don't like us because we aren't a sexy city and everyone else followed LeBron to Cleveland hehe

We put our head down and just hammered out deals.

As inventory tightens nationwide (I don't remember having a conversation with other players where someone didn't cry to me about how they can't find product) we still feel like kids in a candy store.

I'm buying the same stuff I was 5 years.

Please don't tell anyone that deals at 30 cents on the dollar and 15% net cap rates are falling of trees here.

You just have to do the work and deal with shady contractors lol

Thanks mate

@Engelo Rumora I think it depends on what people’s goals are. There is no one “right” way to do things. Some people have high risk tolerance and don’t mind taking on a lot of debt in order to scale faster. Maybe they are trying to retire from their job in a few years and would like to own a real estate empire. Maybe it works maybe it doesn’t, but those people need to be prepared if things turn for the worst. Others have lower risk tolerance or have differing goals and set a long time limit for retirement. Those folks may be a lot more prepared for a downturn, but at the cost of taking much longer for “financial freedom.” I think it’s unfair to say everyone should do it one way or another. I understand your point, but what’s right for you may not be right for everyone. I like hearing the stories of those folks that were able to build a RE business and retire early for their financial independence and several of them did it in different ways. Thanks for your post, I think it’s an important discussion.