All Forum Posts by: Danny Gonzalez

@Ava Petruso Oh, the timeless question: to hold or to sell. I’ve faced this dilemma on nearly every deal, and after completing 30+ BRRRRs and 75+ flips, here’s how I now approach the decision:

1. My preference is to ALWAYS BRRRR, if the numbers work.

• Will the property truly cash flow on the back end? (Be sure to factor in vacancy, PM fees, maintenance, etc in addition to PITI)

• Do you have additional reserves to cover unexpected expenses like long than expected vacancies, high turnover costs, or major repairs (e.g., HVAC or roof replacements)?

2. Do you believe in this area long term?

• Since it’s just 3 miles from your house, I’m guessing you do, which is a great sign.

3. Does this property make sense as a long-term investment?

• Just because you can refi and pull out your initial cash doesn’t mean it’s the kind of property you want to hold for the next 20+ years.

• At an ARV of $625K, this feels high for a rental in most markets. Is there strong demand for high-end rentals in your area?

• What’s the square footage? Larger, nicer homes tend to be more expensive to maintain and harder to rent consistently due to high turnover costs.

4. What are your other sources of income?

• Would the $70K+ cash from flipping significantly impact your financial situation right now?

• Do you have a safety net to weather potential slowdowns or unforeseen issues if you choose to BRRRR?

5. The rehab matters.

• As someone above mentioned, the approach to rehab differs between a flip and a BRRRR. Higher-end finishes and staging make sense for a flip but aren't always ideal for a rental.

• Get clear on your end goal ASAP so you align the rehab with it.

Ultimately, there’s no universal “right” or “wrong” answer here—it depends on your situation and goals. From what you’ve shared, my gut leans toward flipping this one. With your sister involved and the opportunity to reinvest your portion of the proceeds, this feels like a solid option, especially if you’re in the early stages of building wealth.

Congrats on tackling your first deal! The first one is always the toughest, and the lessons you’re learning will pay dividends for years to come. Don’t get overly caught up in maximizing the outcome—what you’re gaining in real-world experience is invaluable.

Hope this helps!

@Daniel Cacho I’m 35 years old, have been in the game for over a decade, own 26 doors, run a property management company with 350+ units, and operate a realty brokerage with a small team of agents. Here’s the advice I wish someone had shared with me when I was 19:

1. This journey won’t be easy. There will be moments when challenges feel insurmountable—deals that fall apart, difficult contractors, financial struggles—but the only way to succeed is to persevere. The ability to adapt and think creatively will set you apart.  You have to be willing to not give up when things get difficult, or don't go as planned.  

2. This journey is worth it. The trials you face—long nights, tough negotiations, setbacks—will all be worth it for the wealth and freedom you can create. Beyond that, the joy of building something meaningful is priceless.

3. Be prepared for isolation. At 19, your friends may not understand your drive. While they’re out partying, you’ll be home learning, analyzing deals, and honing your craft. Some will criticize your choices, but understand that their judgment often reflects their own insecurities. Stay focused.

4. Master your market. Pick one market and go deep. The best investors can spot opportunities quickly because they know the landscape inside and out. Study every deal, know the comps, and learn the trends. Confidence comes from preparation.

5. Find a mentor. The BiggerPockets community is great for guidance, but nothing beats local mentorship. If I were 19, I’d work for a multifamily developer or an big time investor. Start anywhere—offer to assist, intern, whatever it takes—and absorb as much knowledge as you can. Prove your work ethic, and opportunities will come.

6. Enjoy the process. While the financial rewards are great, the true treasure is who you become along the way. You’ll develop resilience, leadership, negotiation skills, vision, emotional control, and more. These qualities are far more valuable than the numbers in your bank account.

7. Set clear goals. A goal gives you direction, purpose, and excitement for the future. Choose a goal so ambitious it forces you to grow into the person who can achieve it. Then, never stop moving toward it.

Remember, the journey won’t be easy, but the rewards—both tangible and intangible-are worth every ounce of effort.

Stay focused, stay disciplined, and never stop learning. You’re on the right path. 

@Jermaine Washington Glad I could help! A big part of succeeding in this game is simply staying in the game.

Make sure to take the lessons from this experience so it’s not in vain:

• Always keep reserves.

• Stay liquid.

• And prioritize managing your money effectively.

You’ve got this!

@Joshua Lanzieri  I’d recommend hopping on a call with your property manager as soon as possible to clarify the situation. Sometimes there are accounting errors, like duplicated charges, so it’s worth investigating. However, if you clearly communicated a $15K budget, I’d stick to that and ask them to discuss the overages with the contractor to find a resolution.

As a side note, always try to maintain reserves for your properties. Unexpected expenses are part of real estate investing, especially with renovations. A good rule of thumb is to have at least $5 to $10K in reserves per unit to cover these situations and avoid financial strain.

@Sharad Bagri  As mentioned above, home warranties often aren’t as beneficial as they seem. In our experience as a property management company, we allow owners to use home warranties, but they are required to coordinate directly with the warranty company themselves.

The main issue we’ve seen is that home warranties can significantly delay even simple repairs. This often leads to frustrated tenants, and unhappy tenants rarely stay long. Frequent turnovers can quickly eat into your profits.

Instead, I’d recommend building up a solid reserve fund and addressing work orders promptly. This approach not only keeps tenants happy but also helps you maintain long-term cash flow by reducing turnover costs. In the end, it’s usually more profitable than relying on a home warranty.

@Guenevere F. $23K isn’t a huge amount of capital in today’s high-interest-rate market, but it’s definitely a starting point. If I were in your shoes, I’d consider a few key factors before diving in:

1. Risk Tolerance:

Ask yourself, “If the worst-case scenario happened and I lost this money, could I recover?” If this is your entire savings, it might be worth waiting and building up a larger safety net.

2. Savings Potential:

How quickly can you add to your savings? If you’re able to save another $20K within 6-12 months, waiting could open up more opportunities and give you more flexibility in your investment choices.

If I were young, had $23K, and believed I could rebuild that savings account, I'd seriously consider making the jump. Things will never feel perfect, and the process will always feel a little scary. When I started, I used a $64K HELOC, and today, I've grown it into a $3,000,000+ portfolio.

That being said, BE EXTREMELY PICKY with your first property. You don’t have a lot of room for error with $23K. Your first deal will set the tone for your investing journey, so:

• Make sure you’re getting good guidance.

• Ensure you have a vetted and trustworthy team.

• Run your numbers conservatively and stress-test your investment.

Lastly, I’d reconsider Section 8 (S8) for your first deal. While S8 can be appealing for its steady payments, in my experience, the returns often aren’t worth the effort, especially for newer investors. Instead, focus on value-add properties. These allow you to:

1. Force Appreciation: Actively increase the property’s value through strategic renovations.

2. Leverage Equity: Either refinance or flip the property to build more liquidity for your next deal.

If you’re interested in chatting more about strategy or need guidance, feel free to shoot me a DM. I’d be glad to help you get started on the right path.

@Jermaine Washington Jaycee did a great job breaking down cash-out refinances. In my experience, most lenders cap at 75% LTV, and even then, it can be tough to pull out enough equity to get meaningful cash at closing.

That said, I’ve noticed a lot of investors, myself included, facing cash crunches lately. It’s a tough spot to be in. Personally, I’ve decided to sell two properties out of my portfolio of 26 to address some unexpected expenses and other debts.

I was hesitant at first because I didn’t want to let go of any properties. But I realized that holding onto them at the expense of my peace of mind just isn’t worth it. That’s why I invested in rentals—to have a safety net.

I'm not exactly sure where you're at, but if your current situation is causing frustration or stress, there’s no shame in selling a property to free up capital. Sometimes it’s the smartest move to gain liquidity and to secure your position with your remaining properties.

@Francisco Pineiro To protect yourself when working with contractors:

1. Start with a Clear Scope of Work (SOW): Ensure every detail of the project is outlined in writing, including materials, timelines, and deliverables.

2. Use Milestone Payments: For a $40K rehab, consider this structure: 10% upfront, 30% at halfway completion, 30% at 75%, and the remaining 30% upon full completion. Never pay for work that hasn’t been done.

3. Verify Work Regularly: Have an objective third party inspect the quality of the work weekly and provide updates. Ensure they send pictures and reports so you can monitor progress.

4. Hire Trusted Contractors: Work only with contractors who come highly recommended by people you trust. Reputation and referrals matter.

I invest out of state, and I’ve been burned by bad contractors before—it’s a fast way to lose money. That’s why I now help investors in Birmingham by connecting them with vetted and trusted contractors. Stick to the SOW, and always verify work before releasing funds. It’s worth the extra effort to protect your investment.

@Vicky H. Owning a $2.5M house can be an expensive commitment, not just because of the upfront down payment but also due to the ongoing expenses for repairs, maintenance, and upgrades that inevitably come with homeownership.

Renting at $5K a month, especially for a 4-bedroom house in the Bay Area, seems like a solid deal. Instead of tying up your capital in a high-cost primary residence, consider taking the would-be down payment and investing it in out-of-state properties.

This strategy allows you to diversify your portfolio across multiple assets, spreading risk while potentially generating cash flow and building equity in appreciating markets. By leveraging real estate in areas with lower entry points and higher returns, you can grow your wealth more effectively without the heavy financial burden of a luxury home.

@Silas Melson If you’re aiming for true passive income, turnkey properties might not be the best route. As mentioned, they often come with limited returns and still require management.

I’m curious—when you say active investing doesn’t appeal to you, is it because of time constraints or concerns about risk? Both of these challenges can often be minimized with the right team and guidance from an experienced investor.

As @Jay Hinrichs mentioned, appreciation is the main driver of wealth in real estate. But that doesn’t mean you need to buy in a top-tier market and lose money each month. There are two types of appreciation to consider:

1. Market Appreciation: Rising property values driven by external factors like economic growth, demand, or market conditions. This is more about riding the wave of a growing market.

2. Forced Appreciation: Actively increasing a property’s value through strategic actions like renovations, raising rents, or improving operations. This method gives you more control and is often a faster way to build wealth.

Forcing appreciation allows you to create value rather than waiting and hoping for the market to rise. It also provides the opportunity for both appreciation and cash flow, especially in markets like Birmingham, AL, where value-add strategies can thrive.

So as others have said, avoid turnkey if you’re looking to build real wealth. Instead, focus on real estate that provides the opportunity to force appreciation or invest in a market with strong growth projections. This approach can lead to both short-term gains and long-term success.

If you’d like to discuss this strategy more, feel free to reach out—I’d be happy to share some insights.