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All Forum Posts by: Brett Holton

Brett Holton has started 1 posts and replied 6 times.

Post: Would you BRRRR for $78/mo cash flow?

Brett HoltonPosted
  • Investor
  • Louisville, KY
  • Posts 7
  • Votes 8

I would do the deal. Many additional benefits, you are growing wealth and you are conservative in your numbers. Seems like you will be able to raise rents as well. Also @Nicholas Morgan, I am in Cincinnati as well. Reach out to me when you get the chance, have a lot of wholesale deals available in the market and always looking to network. 

Post: How Investing in the Stock Market Saps Your Wealth

Brett HoltonPosted
  • Investor
  • Louisville, KY
  • Posts 7
  • Votes 8

This argument took multiple read throughs to even wrap my head around it or even understand. The Dow Jones Industrial Average is calculated by taking divisors in stocks and is not a sum in all of the stocks listed on the dow jones (There are only 30 stocks in the DJIA and the divisors have had to been recalculated multiple times as the result of stock splits). So even with your lack of understanding of how this index works lets address the first half of your argument which is that showing that the rise in value of the Dow Jones has outpaced the growth in the average wage by a factor of four! Sure this could be a great argument for people that argue against growing wealth inequality or that most economic growth has occurred at the top and not trickled down (Not sure if you would want to make either of those arguments politically), but if anything it just exemplifies the benefits of buying stocks! Look at how much your money in the stock market would have grown your wealth and has grown wealth for people who have put their money in to securities and not relied on the growth of their paycheck to get by. Drawing the conclusion that this statistic shows the market sapping your wealth makes no sense and we shouldn't encourage this sort of financial illiteracy. I know this is a real estate investing site but we should all be knowledgable of all the benefits and drawbacks of every form of investing. 

 Additionally, yes the stock market does crash, and it always rebounds and rebounds much stronger. This has been proven over the course of multiple recessions and market crashes over the past 100 years. You can expect your money to grow by an average of 8-9% year over year by investing in index funds, without you doing much more than the 30 seconds it takes to invest that money. It is also important to point out that the real estate market crashes too, in fact the last stock market crash we dealt with was almost completely driven by the real estate bubble that formed. Leveraging yourself with subject tos and multiple financed properties can leave you underwater and bankrupt, much worse than a downturn in the stock market would leave you. Anybody who saw their savings evaporate in their 401ks in 2008 that held on to their investment are already much better off than they were before. The real estate market is just now exceeding its pre-2008 highs. 

I am a huge fan of real estate investing and it is my primary source of income, but we shouldn't confuse income with investments. Also, it is always the best strategy to have a mixed bag of eggs and diversified portfolio. As a previous poster said, a combination of investments in equities, real estate and bonds to their highest and best use that fits your risk profile is the way to go. 

Post: Buyer started working on home before closing.

Brett HoltonPosted
  • Investor
  • Louisville, KY
  • Posts 7
  • Votes 8

Wholesaler.

Post: Buyer started working on home before closing.

Brett HoltonPosted
  • Investor
  • Louisville, KY
  • Posts 7
  • Votes 8
Have a situation currently that would like you guy's advice on. Had a property with an out of state owner that was brought to me by boots on the ground here. Property looked like it could be a deal but had liens. Was told by boots on the ground that liens would be negotiated down with city, and after a month was told that liens had been reduced to $2000. Signed a contract with contingency about cost of liens and sent to title company, and also signed an assignment to a group of Hispanic investors (including race because of the language barrier). They signed the assignment at my title company which they use as well and put an earnest money deposit of $9,000 down for a $15,000 property, this was orchestrated by the title attorney. At the signing the investors asked if they could take a look to make measurements in the property, and I said that was okay. When the title came back, I learned that the liens on the house had not been negotiated down yet and I had been misled by the boots on the ground here. There is no timeline on if or when we will be able to reach a settlement for the liens and close on the deal. After this, I have come to find out that the buyers have started working on the property and by their estimate have already put $10,000 in to the property. I have not seen the property after this work has been done, but I did receive an alarmed call from a realtor who drove by the house that made it sound like some of the work has been pretty extensive. I definitely did not authorize this to the buyers, but it may have been the language barrier. I was only able to communicate with one of the buyers in fluent english and two of them could only speak spanish, we did have someone translating there as well but something may have been lost in translation.

What would you guys do in the situation? Am I at any liability if this deal goes south?

@Sunny Burns I think you should be much more conservative in your budgeting. Even 5% for vacancy, 5% for maintenance and 5% for Capex would not be considered enough by a lot of investors here from what I have read. Just plugging those numbers in to your properties puts your cash flow for the year at $10342 vs. the $26966 that you have estimated. Always better to plan for the worst and hope for the best in my opinion.

@Sunny Burns Big congratulations to you, first. I am very inspired by your story and hope that I can soon reach the same goals of owning $1 million in property and having $100,000 in annual rent. But i did have a few questions on the numbers. First, I am assuming you are paying certain utilities for all units?

Secondly, are you budgeting annually roughly 6% for maintenance and vacancy combined? If so, that number seems much lower than I have seen discussed for estimating expenses. Do you have any sourcing or reason to believe that your expense numbers will be that low?

Also, are you budgeting any amount of money for capital expenditures?