All Forum Posts by: Steve A.

I already have 3 properties with a partner, just a small part of my portfolio.  He's a childhood friend and it's really not a pain at all.  The terms for a conventional mortgage are far more attractive to me than a commercial/portfolio product, so I would like to maximize those before moving on.

Hi guys,

Last time I posted on here I had an affiliate marketing campaign that was generating me over $1000 per day.  Times have changed and traffic has dried up.  I now have only a $500-1000 trickle of online income per month.  But it's OK!  Because I saved every penny of what I made, and having bought my first rental in January of 2014, I finished the year with about 30 units, most of them duplexes.  Half are cash purchases, half are financed at 25-30% down, with 4% fixed rate 30-yrs. 

I took a load off and did some minor traveling domestically for a few months.  I quit my job.  It was an amazing time.  But I found that I love investing and business and owning income-producing assets, and the income that my properties are producing, about $5000 per month net, while it beats the hell out of my old W-2 income, was not enough to build an empire.  I am 29, and would just feel like I wasted my potential if I didn't use this moment to strike while the anvil is hot.

So after my break I went out and got ANOTHER job working for the man.  This one, however, pays a ton and is in the oil/gas industry.  The lifestyle is terrible, as I am in the field in remote locations in a trailer, working 12+ hours usually on a night shift in cold weather.  But the money is unlike anything any other employer would ever offer me.  I am making about 12k a month gross from the job, and I have no state income tax and substantial deductions.  I am also trying to use what little free time I have to experiment with a much less lucrative remote job so that I can boost my income after I leave the industry.

I have done very little with my life except for working, and I would like to travel the world and become more knowledgeable/worldly.  I have barely been out of the American Midwest and it kills me.  So I plan to REALLY retire once I get to an acceptable income level and go take off around the world for 2-3 years, then reassess.  At that point, to be honest, I'll probably start a semi-active/semi-passive business activity like owning franchises (I've been looking at Sport Clips in particular), since I'll be bored.

My goal is $10-15,000 per month after all taxes.  I pay no FICA or state on real estate income, and then of course we have all the deductions for a good chunk of federal.

I am trying to think of the quickest way to get to my goal.  I am estimating this will take 2-3 years in the oilfield, at which point I'll be 32.

I sold my house and moved into an RV, so my monthly expenses including fun and entertainment are under $1000 a month.  Between the job and the real estate I should be getting 15k a month after taxes, so 14k net after expenses.

I will start purchasing again in June, using my last 5 conventional mortgages.  I will be able to buy about 5 in a 6 month period, as I usually buy duplexes for 45-60k with 30% down, with rents of 1100 or so per month.  That takes us to the end of 2015.

In 2016, I will buy 7 more properties conventionally financed with a partner whom I already own 3 properties with, thus maxing him out as well.  This will probably take 4 months. 

I am conservatively estimating I can get $200/door out of these, and they will be duplexes, so 5*200*2 + 7*200 (since I own half) = $3400 a month for a total of $8400/month net cashflow once my conventional mortgages are maxed out.

It's at this point where I am not sure where to go next. Should I buy properties in cash to deleverage at that point? I would consider my current level of leverage, in light of my ridiculously low expenses, not to be excessive, so I would be tempted to do some more 30-40% down financed deals. At this point, I am assuming I would have to go with some sort of portfolio ARM, or buy a larger property with a commercial loan?

I will still have 20 months of at LEAST 15k a month coming in (probably much more) if I stay the full 3 years.  So at my average unit cost of about 25k, I could buy at minimum 15 more units in cash, or 2-3x that if financed.

*** What would you do? ***

Afterwards, as a safety net for some capital infusion, I will take two months off of every year to take advantage of an opportunity I have to make about $20k.  It's not something I would want to do for longer than those 2 months per year.  That will more than cover my living/travel expenses, leaving all the real estate income to pile up.  Part of the income will be invested in a boring Vanguard stock index fund for safety and dividends.  At that point, I would like to become either a multi-unit franchisee or directly purchase businesses, hopefully buying them with cash since I am very wary of the risk.  I would also like to get into oil & gas leases and farms to further diversify my business interests.

I am attempting to purchase a property in Indiana for roughly $30,000.  I quit my job recently, so I have no W-2 income.  I have a rent roll of about $9,000 a month on very conservatively leveraged or paid-off properties.  I also own a profitable business, but can only show one year of tax returns for it.  I have been unable to find anyone who can finance me.  Wells Fargo turned me down for a line of credit on one of my paid off rentals.

I am looking for places that do:

Lines/loans on paid off investment properties, other than Wells Fargo

Or

Commercial loans for single family rental purchases

Or

Lines of credit for investors with a portfolio of 15+ properties

I can handle an LTV up to about 35%, a term as low as 15 years, and a rate as high as 10%...my credit was 780 last time I checked.

Does anyone know where to go to get this house?

Hi Yang,

Please PM me what you currently have for sale.  I've actually been swayed to up my price point a bit. Anything under 50k is fine as long as the 2% rule holds.

Looking for at least one SFR in Indianapolis or surrounding area, PP less than $30k, already rented or ready to rent with no rehab necessary (<$1k in repairs). Looking to be into it for as little cash as possible, thus the no-repairs requirement. Just closed on one for $22k fitting this description, so I know they're out there. PM me.

I'm a business owner and need a stated income/reduced doc loan to purchase a 30k property that's rented for $850/mo. 800 credit score, plenty of assets. Does anyone still do these?

Hello!

I currently have 5 conventional mortgages. I have another 3 properties under contract with a partner. If both of our names are on the loan, it counts towards the ten mortgage limit for both of us, which seems wasteful. Is there any sensible way to get around this? For instance, if both of us owned the house but only one of us was on the mortgage? Is that even possible?

Are you interested in seller financing? If so, I may be a buyer.

Thanks

@Brian Dean

All 9 central Indiana counties are OK. Must have rent potential of 1.5-2% of purchase price. 4 units or less.

Owner financing, brick, ranch would all be icing on the cake.

Thanks

Hi @Mark Milan

I am an Indianapolis local. I am open to any ideas you may have for JV ideas on this property. My main hurdle is financing. I have been looking for seller financed deals. I've also been looking at commercial loans but the 30+% down payments leave a bad taste. Would the seller be willing to provide financing to remove the hassle of managing the property? I can pay much higher than 5% with ROI like this, but I am seeking a smaller downpayment.

Thanks