All Forum Posts by: Carlos Caban

I also live in Los Angeles and haven't purchased my first property because I know it will be pretty hard to find a cash flowing property in the area.  I know I could always purchase cash flow i.e. where I put down 150k on a 250k home that rents for 2k (which from my understanding should generally cash flow), but then I'll have 150k "stuck" in one property and the return on my money will be small in comparison to those who have the smallest possible down payment and still manage to end up in the green.  My debt to income ratio is also worrisome because presumably it will be more difficult to qualify for a loan post first purchase but this would be mitigated from my understanding if your cash flowing.  So ultimately I'm lead to decide whether a low return on my money is worth it for the comfort of investing locally.  I'm still debating this.  One of the guests on the podcast advised something along the lines of invest where the numbers make sense and live where you want, but this is definitely easier said that done hence my lack of action.  Thought I'd just give you how I'm approaching the issue.  Again just wanted to emphasize that I have yet to make my first purchase so what do I really know.

You're right, I didn't consider federal or state income taxes which from my understanding would be an additional 25% for fed and 10% for state off of the $1200 I'm taking in each month, correct?  This would leave me at $-67.33 dollars a month.  The 677.33 did take into consideration the mortgage payment, insurance, taxes, and mortgage insurance.  My apologies for forgetting to include that above, I should have been more careful.  Thank you for reminding me of these expenses!

I did a bit of research and came across numerous instances of rental write offs.  I know that I should approach an accountant if I want accurate tax advice but according to everybody's experience, will all of this 35% percent paid toward taxes actually be realized?  The rental income would push my income past 50k if anybody is wondering where the percentages are coming from.  Thanks again.

Hello,

I live and work in California, but I'm in pursuit of cash flow so I've opened my eyes to the Fort Worth, TX market.  I'm preapproved for 65k at 5% and just want to verify that I'm evaluating properties correctly before making an offer.  I've found a 3 bed 1 bath home listed for 65k but plan on offering 60k to make a 2% rent to value ratio; zillows rent estimate is $1200.  My lender estimates the mortgage, mortgage insurance, and insurance payment to be $677.33 for my full preapproved amount minus $170 for management (10% of rent plus 600 dollar one time initial leasing fee spread across 12 months) which leaves me with a net of $352.67 to store up for my next property at maximum.  Is this a sufficient bumper for a 1948 home?  How accurate are Zillow estimates?  I know one shouldn't rely wholly on them but are they a good tool?  Probably a question for another thread but any recommendations for property management?  Any advice for a brand new investor?  I chose Fort Worth because I have family in the area which I believe should give me an upper hand when compared to a completely blind out of state investor.  I'll be visiting and walking properties in a couple weeks.  Thanks for your time everybody.  Any and all input will be greatly appreciated.  I won't be able to grow much without criticism or failure and I can't help but prefer the former!

Hello @Trexie E.,

I’ve clicked around a bit but I’ve still got a lot of reading and exploring to do. Thank you for the heads up and warm welcome.

Hey @David Tipton,

Very good point.  I think it may be due to a bit of analysis paralysis but simultaneously it seems a bit counter intuitive to me to jump into a highly leveraged loan with only things I've read in books.  A professor once told me that he had a colleague almost die in a lake because he thought he could swim after reading extensively on the topic.  I know this isn't what you're recommending, but as a newb with no real life experience this is a bit how it feels.  I'm thinking more participation in the community and educating myself about peoples experience in RE would make me more comfortable with the risk.  Thank you for the much needed introspection lol.  

Nope, no piles of cash laying around but I would be able to save up a good down payment in a few years time which would hopefully alleviate me from paying for private mortgage insurance. True we can calculate whether it makes financial sense to borrow now with PMI or later without PMI, but once again... analysis paralysis... heh...

But yes, very well said and hilarious quote.

I have considered multi family as my first purchase but I haven't been able to find many in my budget in the Riverside/ San Bernardino area.  This is probably because I don't know where to look/ how to look (I've mostly used craigslist) so I'll moooost likely revisit this as a possibility later in my education/ saving.

Thanks for taking the time to respond and great info!  I didn't think I'd change up my game plan on day 1 but oobla di oobla da.

@Steve Smith

@Dave Visaya,

Thank you for the warm welcome!

Best,

Carlos

Hello Everybody,

Newb here.  I came across Bigger Pockets while searching for something investment related on Sound Cloud.  After going through this material a couple times, I finally decided to drink the Kool-Aid and here I am.

So about me... I'm a younger fella who just got out of college and entered the work force.  My real estate investment game plan is to purchase a single family home in the Riverside/ San Bernardino area with as little leverage as possible; I've come to the conclusion that low leverage pairs beautifully with my inexperience.  With little to no debt on that first home I should be able to save up another large down payment using the cash flow and my own income.  My second purchase would have a little more leverage than my first because the knowledge from the first investment would offset the risk of slightly higher debt.  My second purchase and every other thereafter would be a multifamily to decrease the travel between properties. 

I'm still saving up for my first down payment so the only aspect of my game plan that I can work on at the moment is education.  School me Bigger Pockets... 

Best,

Carlos