All Forum Posts by: Austin Paige

Looking for a trust worthy contractor that is good at estimating prices of rehabs in the 254 area. If anyone has any reliable contractor please let me know. 

@Jake Andronico Hey Jake this is a software that your team developed. Is it free or for sale? 

@Laura Shinkle Yes thank you for your response. So the best strategy here would be to target people that used VA loans to buy homes 3 years ago so you can get the 2.875% interest rate and hopefully they put 0% down leaving a lot of debt left on their mortgage.

@Andrew Newcomb They are finding deals the same way. Investors are cold calling, doing direct mailing campaigns, and networking. Realtors a lot of the time market themselves through their brokerage and advertise their services hoping to get a few phone calls of potential clients. 

First off I’m sure this has been discussed before. Maybe because I am on mobile I am not able to search the forums, is there a search functions I am missing? 

I do not see a lot of content on YouTube about buying auctions. Also I have not seen a lot of BP podcasts on the subject. Is there a reason this would be a bad strategy? 

From what I have seen, most of the deals that you will find with the current interest rates are going to be off market deals. Anything that is on the MLS (Zillow/Redfin) is already retail price and most likely will not cash flow with 20% down. You need to use creative ways to find deals.

Try REI calculators they are a lot faster than using a spreadsheet in my opinion.

Quote from @Arn Cenedella:

@Austin Paige

💯. Each investor is different. 

And so one’s investing strategy should align with their goals.

If leaving W2 is the goal, that might call for a different approach than say leaving a legacy or paying for your kid’s college education. 

If for example one needs to replace one’s $120,000 a year W2 income, how much capital does an investor need?

Can one generate $120,000 a year cash glow with $200,000 in equity in “cash flow” real estate?

I’d say NO. For $200,000 in equity invested in real estate to generate $120,000 a year, one needs cash flow investments that generate a 60% annual cash on cash return. 

Even $1M in real estate equity would need to produce a 12% annual cash on cash return to generate $120,000. Maybe that’s doable but is actually unusual. 

So in my mind, the goal should be accumulate $1M to $2M in equity in capital to generate that $120,000 a year income. 

Just my opinion, cash flow is great but I believe one needs to have a significant amount of capital to generate quit the W2. 

You are probably correct I am new to REI.

In theory would it be possible to replace a 120k W2 with creative financing therefore not needing as much capital to obtain cash flow properties? 
Also with the BRRRR method after your first down payment on your first property after the refi and reinvestment into a new property you are not using anymore of your own capital to grow your portfolio. With those models cash flow is still important and you can obtain a large portfolio without needing large capital. Or am I completely wrong on this? 

This discussion is actually extremely helpful in how I am learning the different strategies. 

Quote from @Laura Shinkle:

In trying to decide between two cities, I 100% agree with @Conner Olsen. Remember that a househack is an investment strategy but it's also where you live. If you're miserable in your housing situation, it may make you act a little more impulsively down the road (and impulsive is never a good thing in real estate). 

In order to assume a loan, you'll need lots of cash on hand. If the seller only owes $200k and he or she is selling for $500k, then you'll need to bring $300k+ to the table in order to purchase the home. And not hard money cash, all YOUR cash. 

I can't speak to the Austin/Houston area, but I don't recommend my clients focus solely on assumable loans. Finding a househack that you like is tough enough in a market where inventory is limited. That will limit your search even further. Not to say that you shouldn't go for it if you find it, but I wouldn't narrow my options that much. Just my two cents. 

I’m new here sorry if this was already explained, but what would he need 300k cash? When house hacking is it not possible to get a loan for 500k and just buy the property why does it matter how much equity the seller has in the property? 

have you been finding off market deals or are these numbers from properties already on the MLS?

Very interesting read. I think this comes back to what is the investors goal. If your goal is to replace your W2 then cash flow is king. If you are using REI as a retirement fund break even and appreciation is a great long game. I think what gets a lot of people so heavily interested in REI is the ability to replace their W2 which from my understanding would need cash flow.