All Forum Posts by: Alan Grobmeier

@Cj Ruhnke, you have terrible timing!  ;-)  Credit has not been any easier since the GFC than it is today.  Ca$h is almost meaningless.  

Now, if you used the 100% cash in 2008-12, much different story.  Cash meant everything.  

I got a loan in 2010.  25% down, Fico in the low 8’s.  I was thinking they were gonna want a blood test or something.  Getting a loan was almost impossible.  Tons of questions about stupid stuff.

@Lauren Juarez, most of that stuff already happened in the GFC. The feds were able to paper over it.  The next recession, when it happens, won’t be as severe.  At least initially.  5 yrs later, hard to tell.  There is way too much ca$h sloshing around looking for a return.  It will be like catching a falling knife.  Way too many ppl looking for the 1st 20% drop.  That may (or may not) be the bottom.

I think the next recession will be much longer in duration because of these facts.  Something has to sop up all the cash running around.  The only other thing that can do that is malfeasance investing/Wall Street craps table.  ;-)

@Cj Ruhnke, why did you pay 100% cash if you planned on financing it?  You are now going to pay some closing costs twice.  :-(

@James Wise, @Jay Hinrichs, Clayton seems to have a financial freedom website.  I am guessing he still needs 'dough'?  Is Portugal really that expensive?

It's only $697.  Are you guys gonna be buying?  ;-)  I need to start a financial freedom website so I can be financially free!

https://financialfreedomacadem...

Hey James, I guess your youtube still has MORE ground to cover?  ;-)

@Jacob Seim, we all make mistakes in this business.  I'm STILL learning despite having an almost 'push button' operation.  And PPL are kinda like cats, they don't always do what YOU want.

As long as you don't lose a bunch or money at once or get over extended/leveraged, none of your mistakes should be 'fatal'.  ;-)

@Jaime Topete, save the money for your next investment. If you have owner/occupied deals your interest rate is around 3.5%. Your ROI is probably way higher on a next deal.

I guess felonies are a new protected class?  I’m surprised to see KC try to turn into Cali.  :-(

@Jacob Seim, you're 29.  Go a little slower.  ;-)  You MIGHT find, after a couple of places and a few years, that you want to completely change your business model in some manner.  You might decide that investing in the rust belt wasn't as lucrative as it initially appeared.  You might want to PM the properties yourself.  You might want properties near your home where you can have control.  

That's before you get into the boom/bust cycles of real estate.  Almost everyone says we are at the top of the cycle.  If that is the case, you don't really want to pile in at the very top.

Your COC of >10% is commendable. But you will have a better chance of finding a unicorn, even in the midwest. Those 10%+ "ROI's" are full of gotchas. Detroit has 15%+ ROI's. Are you looking to buy there? YOU won't get a 10% COC return. Somebody local MIGHT get a return close to that number. And the properties are, more than likely, C-, D, or even F type properties. The properties are generally old and have tons of CapEx just waiting for a new buyer. They are not the B properties you are seeking.

My recommendation, FWIW, start MUCH slower. Buy a good B/A SFR near where you live. Rent it out for a year or two to get your feet wet and see where this market goes. You have plenty of time to buy another 5-10 properties.

Trust me when I say this:  You don't know what you don't know.  

In one word:  no.

Any maintenance issue will break you. 

@Matthew Lucherini, hopefully you bought those using a self directed IRA where you won't pay tax until you take distributions. Otherwise you will pay tax on your interest in the year which it was earned.

In any event, you need a CPA.