All Forum Posts by: Brian Barfoot

Hey hey! Congratulations! It's a great journey you're starting.

I agree with Wesley. Keeping it in a "safe" investment account doesn't sound safe if it has a stock aspect. This is money that you may need at short notice some time and so it should never be kept in a volitile place. Savings/money market accounts let you tap it at a moment's notice. As for amount, I go a little conservative and keep $10K in cash. After that it all goes to the "next house fund" or paying off the HELOC.

Thanks for the link and the feedback. For your option #2 which is more like what I would be doing it seems as though the partner is getting a very good deal. You do all of the work, they put in 50% of funds and no work, and everything is split 50-50? I don't see how you are compensated for your time in that scenario.

I don't usually do the brag post but it's been a good July and I know people out there will appreciate this as members of "my tribe."

I got my license about a year ago to help with purchasing my own SFRs but so far had neither sold anything nor worked as a buyer's agent. Then a friend called me up and asked her to find a house. We eventually found one she loved and it's a HUD which meant I got to do a lot of learning while earning my first commission check. We cleared the last of the PIA hurdles and should close in the next few weeks.

In addition, our worst SFR (as far as cash flow was going) had their lease come up and they moved out to buy a house of their own. We did a quick paint-and-clean and put it on the market to see what would happen and within four days we had a signed contract for 67% more than we paid for it two years ago. We should have enough cash after closing to but two more singles and end up with four times the cash flow.

These are little victories but both 'firsts' for me and are building my confidence that I can do this real estate thing as my only gig before too long. At this rate I should have four houses on my own and three more with the partner by the end of the year and if I can double that total I won't have to work anymore. Retired at 40 is starting to look like an attainable goal which blows my mind since it was a joke only a couple of years ago. 

I hope our good fortune spreads across the forums and that all of you have a productive and victory-filled summer!

Hi all,

So I'm running into a good problem: I have a few SFRs that are up and running with solid cashflow and while I try not to brag, I do like talking about my successes with my friends. I've obviously been convincing because at least one of them has asked if he can buy in on the next property. It would help my growth (and progress toward financial independence) to have his capital to play with but I want to be sure and make a deal that benefits everyone. Around here a base hit SFR sells for 80K and rents for 1100-1200/month.

In this case, I would be the buyer's agent, do the searching and initial look-over of the property, run the deal (likely on my own finances through a commercial lender), and place/manage the tenants after closing. He would put in about half of the funds needed for the down payment and get updates when relevant as an out-of-state partner. 

So here are my thoughts:

-I don't think it's fair to me to go 50-50 on the cash flow from this property since I'm doing all of the heavy lifting but I'd like to keep the equity 50-50 since he is thinking of it as a retirement hedge.

-I could offer him something like a 60/40 split to compensate but that would make some of the bookkeeping tricky.

-I could simply charge a flat fee for each of the services I provide (10% management fee, couple hundred bucks for the finding of the place and a couple hundred more for closing the deal, etc)

Has anyone out there been in this kind of spot? What did you do to make all parties happy? Ideally whatever formula I work out will be scalable and I can do some more deals with other friends. 

Personally I wouldn't charge any since it's basically just a sublet and I don't charge for those in my rentals. It depends on your market. If you live in a high demand area it's worth ball parking how much time you spend (say half an hour to change the names on your least and reprint it) and a reasonable rate for your time ($80 an hour or whatever you feel you're worth) and passing that on. For my situation it's worth doing a few extra-mile things like reprinting the lease just for the goodwill. I have a great relationship with all of my tenants because I don't nickel and dime stuff.

Hi Matt. I'm an agent and I own several properties on the east side of Syracuse plus managing a couple more. It's a great area and it seems like there are deals all over the place right now. Feel free to PM me if you want to connect and talk details.

Welcome! I'm in East Syracuse and have a few rentals in my area. 50 is a pretty big goal. I wish you luck. If you have any interest in the Syracuse market or just want to trade ideas feel free to reach out. I've been investing here for about four years and I'm an agent as well. I also grew up here (I'm a 46er) so I know the finer details of the neighborhoods.

I'm going to ramp things up this year too and switch to commercial portfolio lending. I've enough dealings with conventional mortgage brokers to never want to go that route again. Let's stay in touch and maybe we can make some bank twice as happy.

I don't see anything wrong with snowflaking a 401k or 403b but if extreme savings is the goal I'd keep it small (say 50-100 bucks a month.) It can add up in those accounts over time and it's comforting to see that you have an automatic cushion for "old age." If you do your research though the returns in real estate are far better and so the retirement account is just there as a bonus.