All Forum Posts by: Andy Robison

I'm just going to follow along. This seems interesting! 

1) What is the ARV (after repair value)
2) Walk through with 3 contractors and find a price. Even if you plan on doing it all yourself, they can give you numbers at least.
3) Those numbers are useless what is the market like?

 Hell. I learned the hard way on how to fix a copper pipe. Upstairs shower had a bad (Horrible) connection on the pipe leading from the bathtub to the shower head. Turn on shower and about 1gph ran down the tub onto my ceiling. Fixed that real quick. Youtube and a shark bite connection had me set to go in an hour. I've fixed a few other copper leaks replacing with pex when I needed a good foot or so run on busted pipes. My connections are starting to look super pretty.

 Search BP. Literally Everything you need to know. (Well most everything) Look for a qualified CPA who deals with real-estate and spend an hour asking questions.

Please bear in mind that that is way overly optimistic as far as rent-purchase price. It was only intended to show that paying off a mortgage is not the best option in most cases. 
Now you could once you get to 10 houses, pay down a house or two and increase cash flow. Or do a cash out REFI and just recycle that money. Keeping mortgage on the house and purchasing new properties.

 one question. Why would you want to pay off your house faster? You lose tax advantages, and ways to shield your income and lower your tax bill at the end of the year. Try to get out of the consumer mind set, you want to CREATE wealth. Nobody gets wealthy by saving.

So lets play a mind game real quick. You make enough money to cover your bills and put $500/month into your investment nest egg. You've got enough for a 20% down on a duplex +other expenses I like simple numbers so I'll keep it simple but hopefully it'll make sense.
So you have a duplex you bought for $100k. It rents each side out for $800/month. You move into one side, and rent the other out. Covering the $750-ish mortgage/insurance/tax bill.  Great! You are started. Lets say you were paying $1k/month in rent.
Now you have a duplex, great tennants, lower mortgage and still keeping that $500/month to build your nest egg again + another 350 from not renting out 1k/month any more. In 2 years nothing happens life is great, ideal situations. You now have enough for another duplex. Same deal. 100k purchase, after you fix some stuff you get $800/side. $1600 total. 750 mortgage +300 rainy day fund (because luck wont hold forever) Cashflow $550 from the new duplex. So now you have 160k in debt. But that debt is being paid for by other people. And that debt is generating you $550/month. You enter year four keeping strict budgets you still manage to keep putting $850 of your money into your nest egg and adding the $550/month from the other duplex. You have enough to buy another duplex same deal add another 550/month. and it scales, instead of one property a year you have a nest egg for purchases being bought every 6 months, then 3months etc etc . Now you and the wife have gotten a pay raise, and keep investing into your real estate company more money buy more properties until you have 10 duplexes generating $5500/month. or 66k a year lets say this took 9 years. Great you have 66k in income and your DTI is incredibly awesome. (crazy scenario and not likely to happen but illustrate the point of leverage) Then there is OPM tax benifits, putting 3-5% down instead of 20% and a whole slew of other things I wont touch on for a thought experiment.

Other hand, you buy one duplex, 20% down $100k purchase 750-ish mortgage. You manage to pay it off in 7 years. The duplex now generates $800/month free and clear. Which would you rather have?

Hell I'd have a few CC's rolling around just so I can abuse that 0% financing. 
But personally I'm trying to pay off my CC debt personally and leverage properties to make the most amount of money possible. I'd rather have 5 hoses with debt than 1 house with no debt. Scale is important to me.

Just shop around. I've never heard of a discount for being a disabled vet. But then again I've not gotten a chance to look into it. My claim is 4+ years and waiting with the VA to be reviewed. I utilized my VA loan through USAA. It was a pretty straight forward process. just be prepared to raze a small forest to print and sign and then scan back all the documents they want you to sign. My closing costs with USAA were 5k. That was then rolled into the loan I was given.

You could literally install a ceiling fan and mitigate it.
The mitigation system will cost you tops $1 a month.... if that to run.

 It is free. They make their money by you signing up to credit cards they suggest for you.