All Forum Posts by: Clifford Paul

Shouldn't the question be "how much money does one need"?

It's a trick question to be sure. One person's life and goals is not the same as another's. 

For example I'm a car guy. I love car's and I'm sorry but a 10 year old Prius doesn't do it for me. I'll drop 100k on a car in a heartbeat if it's what I want. As a car guy we get it, not everyone likes car's and they only see them as a means to get to point A to B. There's nothing wrong with that either. We car guys are miss understood for sure. Even on BP you are looked down on for driving a car worth more than 5k. Some how this isn't being smart with your money and you could be buying more door's. Once you made it... You don't need more door's!

I made 10k in the last 24 hours. Bought 2 flops on Friday and my agent sold them today for 5k profit each. If people can't find a way to make it in this life why should I pay for their failure? I have a freaking GED and work 2 jobs for 20 years and made smart investments to get here. No house I ever bought keep anyone from buying or becoming successful. 

My local Corvette club members donated over a million dollars last year to local  charities and it will be more this year. We donate anonymously so no one even knows what we do. We're fine with that.  

I personally don't need more door's I'm crushing it with less. I don't need more money because I made it through hard work and more hard work. Large companies buying thousands of houses is not going to hold anyone back. The lack of action and work ethic is the only thing holding people from success.

I have an old saying that I probably ripped off from someone.

"I don't lend money to friends or family"

Rental income = money!

I will however give them money if it's a situation where they need help. This removes any hard feelings because it's a gift not a loan.

When my brother in-law became disabled due to a medical condition we gave him one of our small rental houses free and clear. 

I don't have any answers on the situation with your mom but maybe some of the advice others have given will help solve the situation.

I don't think flipping is dead but I know a lot of flippers are. I've been using my F.L.O.P.S strategy for the last two years. I'm buying and selling 3 to 4 flops a month.

What is my  F.L.O.P.S strategy?

F - Find

L- Losing

O - Opportunities

P - Purchase

S - Sell

With the help of my agent we identify out of town flippers and watch for their flip to become a flop. Main reason they are flops is because they hire the wrong contractor. I know all the contractors in my city and when I identify the one's who hire the crooks it's a 100% guarantee that it's going to be a flop. I'm stacking more cash to buy more when the market does bust. 

Look for my up coming book on how to identify flops and my 20k seminars on buying flops not flips. "Joking" :D

But seriously I do want to thank HGTV for increasing my wealth. 

No, 18 is the best age to start. I bought my first house when I turned 18 for cash. I worked 3 jobs and saved 75% of my income. I reached 1 million net worth by 29 by continuing to work 2 jobs and buying more houses. Work hard, Stay focused and never give up! 

@Brent Coombs

Full disclosure Brent, I have a 30 year relationship with my credit union. With this loan, that's 41 closed loans. They also hold a large amount of my investment accounts so they know where my money is. A lot of people ask on bigger pockets how to get low down payment loans. It's easy just find a local credit union that does in house loans and build a relationship with them. Also doesn't hurt to live on the same street as your banker and let him beat you on the golf course once a week. ;)

Update!!!

My lender got loan done early and I closed on crash pad number 6 on Friday. 

My property manager got lease signed on Friday for August 1st start. 

Here's the numbers: new build

30 yr, 5% down, no PMI, interest rate 4.75%

Price: $259,500.00

Deposit: $5,000

Closing cost: $5,706.41

Cash to close: $13,624.97

Payment: $1,404.21 with taxes and insurance.

Payment will increase next year when taxes catch up on new build.

24 month lease, occupied or empty.

Rent: $5,400 to $5,580 - based on 30 or 31 days.

Numbers based on my 5 other crash pads.

Cleaning: $900 a month billed back to airline.

Laundry: $300 a month billed back to airline.

Lawn care: $140 

Electric: $180

Gas: $30

Trash & sewer: $31

Water: $60

Cable & internet: $120

Monthly cash flow:

5% maintenance: $270

5% vacancy: $270

Property management fee: 10%

30 day cash flow: $2,354.79

31 day cash flow: $2,498.79

As you can see I did not hit my $3,000 a door on this one. I bought a more expensive house this time. My builder has increased pricing and no longer is building at a price point where I can reach 3k a door, unless I put more than 5% down. I'm fine with that. I already put a 5k down payment on next build.

Cash on cash return numbers:

Annual cash flow: $29,121.48

Loan amount: $246,525.00

Down payment & closing: $18,624.97

Furniture and appliances: $20,000.00

Total cash invested: $38,624.97

Cash on cash return: 75.3%

Last thing I'm only doing 5% on maintenance because these are new homes. I get 1 year 100% builders warranty and then a 1 year warranty through a warranty company. So far there's been very little maintenance and the builder has taken care of everything same or next day. 

@Jonathan Woelfle

Dave Ramsey also says all your cars, motorcycles, jet skis etc. Should not be more than 50% your annual income. 

I guess I'm actually pretty conservative on vehicle spending. $170k on 3 vehicles and Dave says I can spend more... Thank you Dave!!! 😊

Cigar Snob - July/August issue pg. 53

It was a good read, check it out.

@Jim K.

Right on! Jim

Who gives a flipping biscuit what someone drives. I read a thread the other day where one guy told another that no serious investor would spend more than 5k on a car. I spent 170k in the last 3 years on cars. I guess I'm not a serious investor and I'm just trying to keep up with the Joneses. LOL

@Kevin Sack

Hi Kevin, 

I don't rent to lower income classes. All my properties are A & B neighborhood's. 

I have 4 SFR that are just standard rentals.

My other 5 soon to be 6, closing on Friday are crash pads for airline crews. I bought these home's new direct from the builder. 

The airline pays laundry and cleaning and I pick up the utilities, maintenance and lawn care. I'm completely hands off as my property manager takes care of everything. I think there's a lot of growth in this space. Really surprised more investors are not doing the same thing. Another option would be luxury vacation rentals which I understand can cash flow more than what I'm making but may require more hand's on.