All Forum Posts by: Austin Petrie

@Vinay H. you're right that it will be a lot tougher for @Luca Fredrix than someone who already has those things, but this shouldn't exclude him from being able to invest in real estate. Yes, you will probably have to work much harder and longer, but the grit and knowledge that you will gain from this will set you up for success for the rest of your life.

So I wish you the best of luck on your journey Luca, just recognizing that you want to become a real estate investor this early on sets you lightyears ahead of so many other people!

@Matt K. I appreciate the insight, you were able to make this point very understandable with those two examples side by side. I guess I have some more thinking to do to decide exactly the path that's right for me. Thank you!

@Andrew Fredrickson

Thanks for taking the time to respond! I can see the value in that and I think I'll spend some time now figuring out what value I can bring to the table and what skills I think would compliment mine the most and then look into the idea of finding a partner to work with.

Hey all,

I hear a lot of people say to not get stuck in analysis paralysis and that the greatest value you get from your first deal is the experience, not necessarily the financial returns. What is your opinion on that and what lower amount of return do you think would be an acceptable amount as a tradeoff for this gained experience?

The reason I'm asking this is because I know most markets are heavily saturated at this point and properties are expensive, but I don't want to wait potentially years before getting my first property just because prices will eventually go down. I'd much rather get something with marginal returns right now so that when prices do go down, I have the experience to purchase many great deals. So to reiterate my question, what are the "marginal returns" that I should be ok with when taking into account how valuable this experience will be?

A lot of people have mentioned buying a multi instead of single family home,

@Dustin Beam @Jason D. @Mandy Ellett @Amber Koontz or anyone else, could you explain why? I understand that MFR will most likely produce higher cash flow, but if a huge part of your first investment is the learning experience, would it be more wise to start small with a SFR before moving to MFR which has more moving parts? Also would you still suggest a MFR over SFR if you don't want to house hack?

@Bill F. I really appreciate the detailed response, there are a lot of gems of knowledge I was able to get from it. Also that's a great quote, I never heard it before.

Haha very fair point @Mike Dymski. Definitely don't want to miss out on good opportunities from over analyzing everything.

@Andrew Kerr oh ok cool, that makes sense. Thanks for elaborating on that.

Hey Andrew, thanks for the response that's an interesting take on things! I'm curious, do you use another metric to take into account the time value of your money alongside CoC return or have you found that CoC return has suited you well enough even without that factor?

Hey all,

I'm trying to figure out if there are any advantages to using IRR instead of MIRR in an investment analysis. From what I can find it seems like there isn't, but I haven't found any sources definitively making that claim. The way I see it is that MIRR accounts for IRR's two short-comings: 1) potentially having multiple solutions when the cash flow from the investment goes from positive to negative and vice-versa, and 2) assuming that you can reinvest your positive cash flow from the investment at the same rate of return you expect your investment to make (the IRR). And both values must be calculated using software so it isn't any harder to determine their values (besides deciding your safe rate and reinvestment rate).

I appreciate the importance of IRR as a form of training wheels since the concept is already difficult to grasp; someone learning shouldn't try to jump straight to understanding MIRR. But when analyzing deals in any real-world situation, it seems like MIRR should always be used. I'd love to hear everyone's thoughts on this.