All Forum Posts by: Brenden Mitchum

Hi @Sean Jabbari! First off, welcome to the BP community!

I know there seems to be an unlimited amount of information to learn but the good news is that you already have your first property which is more than most. I am currently searching for my first buy&hold so I know just how difficult that first one can be to find. Despite not yet having a property of my own I'd love to give you some advice based on what I have learned over the past year. 

First, you should definitely start by expanding on your goals. Determine what you really want your life to look like in 10 or 20 years and work back from there. If your goal is simply "to get tax benefits and obtain financial freedom," you will have a hard time staying focused and getting anywhere. 

Now, it sounds like you already have one successful cash flowing rental so why not just repeat that same blueprint for the next one? I'll try to answer your specific questions but keep in mind I am not an expert, this is just some information I have picked up on my journey from more seasoned investors.

1. I have never heard of anyone calculating depreciation when making a decision on a property. In fact, most of what I hear is that tax benefits should just be viewed as extra benefits, not the determining factor in a deal analysis. That being said, if you're a math guy and like numbers, there's no harm in running them. Then, at least, you'll know what to expect when tax season rolls around.

2. The "right" down payment depends on so many factors that it is near impossible for anyone to give you a good answer here unless they know a lot more about your situation. So my advice here is to decide how much personal capital you want to invest on a property. Keep in mind this also effects your cash flow and CoC return so knowing your criteria for those will also help you answer financing questions.

3. So cash flow is essentially gross rent minus PITI and expenses. There is no best "ratio" that I know of because that would completely ignore taxes, insurance and expenses. However, when I do my calculations I look for $200/unit/mo cash flow ($100 is my minimum for multifamily). The fast rule for cash flow is the 1% rule and this can be used to quickly determine if you want to take a closer look at the property.

4. Interest rates are historically low right now so it is a great time to buy but the coming downturn will also be a great time to buy because homes will be significantly discounted. So the real answer is that asap is always the best time to invest (intelligently) because the sooner you start investing (again intelligently) the more you will make over your lifetime. 

5. There are a billion other questions you could ask and that is what this community is here for: To help each other. Just be sure that your questions are specific enough to get a specific answer. If the answer can be found by googling or searching here in the forums, you will not likely get a response. 

And please if you have any questions or just want to chat, feel free to message me anytime.

Hey @Jared Elms.

First off, congrats on that first successful OOS buy&hold!

It's very difficult to answer your financing question because it's so dependent on your specific situation. If you have 20% to put down with a hard/private money and this makes sense when you run your numbers, then go with that. However, if you don't have enough maybe your partner can put in some equity too? And if you still don't have enough or if you just want to get creative so you aren't putting in any of your own money, go find some OPM (other people's money). Ask relatives, friends or whoever you know who has extra cash or an IRA and wants to get their money working for them. Honestly, financing will just come down to how much you can afford/want to invest on the deal.

Unfortunately, your question about structuring the partnership has a similar answer: It depends. Just have a conversation with your partner and determine what they think is fair. If this lines up with what you think is fair, then go with that.

If you have any other questions or just want to chat, please feel free to PM me at anytime.

Hey BP Fam!

I am curious if any of you have recently completed an online course that you feel was a great investment of your time and money (looking for a 12% or higher return here). While I am not a believer at all in expensive Guru courses, I am a huge fan of well organized, informational online courses. I liken these to reading a good book.

I'll kick off the discussion with a review of a course that I just finished. It's a Udemy course titled "The Complete Guide to Multifamily Real Estate Investing" and it was taught by Justin Kivel of Break Into CRE. I thought this was a fantastic course for the price and I highly recommend it to anyone looking to get into commercial multifamily.

Disclaimer: I do not work for Break Into CRE nor do I know Justin or get any compensation of any sort for this post. I am a little new here still and I did read the forum rules, but if this breaks one, please let me know.

@Mike H. moving for family is a fantastic reason to move and I think you have made a good choice going with Atlanta. However, you will want to do a little more in-depth research into the submarkets of Atlanta because it is  very hyperlocal. For this reason, I would say a lot of neighborhoods at your price range probably are not "walkable." I mean this as you may not feel comfortable taking your wife and little girl on a walk to get brunch. Even ITP, many neighborhoods are not really walkable and those that are tend to be in the more high priced areas near the belt-line on the North and East side. Honestly, I would say Atlanta, in general, is not a very walkable city. This observation is from limited experience though so I fully welcome any and all arguments against this point.

I don't say this to scare you away or anything, but you will definitely want to do further research and even come out and visit these neighborhoods yourself before you buy. I am by no means an expert on Atlanta so there very well could be a neighborhood that fits your criteria. 

Hey @Mike H. 

First, let me ask, Why Atlanta? Is this a market you have decided to invest in after researching or are you moving here for other reasons? Also, why specifically ITP?

Obviously this is all speculation, especially with the coming economic recession (who knows when). But if you are looking for something ITP with good chance for appreciation, it wouldn't hurt to buy near the new Westside Park. The "anticipated" opening is Spring 2020 so if you can get in before that you may be sitting pretty, appreciation-wise. Driving around neighborhoods near there (Grove Park, Hunter Hills) I have seen lots of development activity, specifically house-flipping. Now almost everything ITP is appreciating so you probably can't go too wrong as long as you buy right. For your price range, you'll want to stay South or West, but keep in mind some of these areas can still be a little rough so check crime reports and don't expect to be sending your kids (if you have any) to A+ schools.

By the way, @Anthony Fontana is a great guy and very knowledgeable so definitely reach out to him if you haven't already.

If you have other questions or just want to chat, please shoot me a pm anytime.

Hey @Chris Hughes! Welcome to the BP community!

I am no stranger to working crappy hours at a job that keeps you from doing the things you want to do with the people you want to do them with. But it sounds like you have the right mindset to grind through that and start investing. And it's great that you have a goal to replace your OT income with rental income. However, you should expand on that goal and get really detailed. This will help you develop a plan to get there. 

OOS investing is definitely an option, and probably the one I would go with if I were in your shoes. While this will be much tougher to get started than if you invested locally, it is certainly doable. You just need to do your research and determine your market and submarkets of choice. Really focus in and get specific about what you are looking for and where. Then start building your team there. Talk to people here on BP who invest in that area, call agents, call property managers. Then schedule meetings with those people and take a short trip out there to speak with those people and see the area for yourself. This is how you get to know an OOS market. I do think it is a good call to keep that market within a short flight (or a long drive), at least for your first few investments. Then, once you have your systems down, you can expand to other markets further away. 

By the way I grew up in Mission Viejo so if you need any good beach recommendations, have any questions or just want to chat shoot me a message anytime!

Hey @Lazlo Steele! Welcome to the BP community!

You are definitely in the right place to start building your network. Be active in the forums here and you will meet plenty of great people in no time! Also, you may want to consider checking out some local meet-ups. You can find these here on BP at biggerpockets.com/events or through meetup.com. 

With a huge but actionable goal like that you are definitely on the right track. If you have not already, I highly recommend expanding on that goal, really working out the details of where you want to be in 10-years (develop a vision). Then work backwards from there to have some shorter term goals to keep y'all on track. 

Keep us updated on your journey and feel free to message me anytime with questions or just to chat (I'd love to talk hear more about CO Springs).

Hey @Jahbari McLennan! 

Check out @Brandon Turner's Book on Investing With No and Low Money Down. It's been a minute since I read it but I'm fairly confident he spends some time on seller financing. It will be hard to find many other real estate books that go into detail on such a specific form of financing. However, you'll probably be able to find plenty of samples and information by searching "seller financing" here on BP.

Feel free to message me if you have other questions or just want to chat!

Hey @Brendan Seals! First off, welcome to the BP community!

While that isn't a ton of capital, it is a solid enough chunk to get started in any of the methods of REI that you mentioned. My advice to you is two-part.

1. Go educate yourself a bit on these different methods. There are a variety of fantastic books and podcasts out there. In fact, a great place to start would be the Biggerpockets podcast. Also, Michael Blank has a great apartment podcast. As for books, I highly recommend that Millionaire Real Estate Investor by Gary Keller to start. And don't forget there are a bunch of blog posts here on BP that are incredibly informative. 

2. Follow whichever path resonates more with you and your long-term goals. Determine what these long-term goals are and work backwards to determine which method is best for you.

I know that may seem a little vague but it's your job now to educate yourself so that you can ask specific questions that require specific answers.

Please feel free to pm me anytime with questions or just to chat!

Hi @Shyam Panchal!

1. I am running into the same issues as you for North Atlanta (I live in Johns Creek). There are a few pockets at decent price, but the rent is still too low compared to the price. I am still keeping my eyes out on a few places in the Marietta/Sandy Springs/Norcross area. I have not yet purchased a property here in Atlanta, but I have heard "good" things about West and South Atlanta. By this I mean people are excited about the potential for these areas to be up-and-coming. However, that is obviously speculation so I still would not buy anything that does not make sense in the present. There are also pockets in the East Atlanta (Decatur, Stone Mountain) area that have not taken off yet but could soon. 

2. It really depends on the specific neighborhood. Like you said these areas have a higher percentage of renters so it's possible to find good tenants as long as you're screening correctly. While these areas may have higher vacancy and unemployment than North Atlanta, they could still make sense if the specific neighborhood is safe and the property is recently renovated (thus attractive to tenants).

3. I, personally, have not refinanced a property so cannot give experience-based advice. However, I do not see any reason why trouble selling would effect your ability to re-finance. You just want to make sure that you will still cash flow after the refinance. You also may want to focus on getting your current rental property in good working order first. If you are having issues with this one, you will likely have the same issues with the next one.

Anyways, I hope that helped a bit. Please feel free to pm me anytime with questions or just to chat!