All Forum Posts by: Axel Meierhoefer

Any strategy you apply or develop has to have implementation criteria. If you can find deals that meet those criteria the strategy works.

If you look at all strategies you are comfortable using to reach your goals and you can find deals that work for one of them, you get closer to these goals. If none of the strategies you like and are willing to work anymore due to external circumstances, you can keep what you have from the time when some or all strategies worked and focus on preparation for market conditions to get back into your frame of strategies.

I agree that currently most published strategies (at least published on BP) still work if you find the right deals. Short-term rental is one of them.

@Jimmy Watson 

Yes, this is what's called the "Military Clause". it basically says that if you get orders all the normal restrictions are removed to allow you to go and defend our freedoms. This also applies if you rent a place and get orders you can break the lease using the military clause.
I can show you a way to stay in SD county even with these crazy prices if you are willing to have a little flexibility.

I have found that Jay is someone to respect for his experience and well-researched opinions.

For me the question is: What does it mean for my portfolio and my actions this year, assuming Jay is correct?

If Jay is correct I will still have my well-performing properties in my portfolio generating positive cash flow and a good chance that people will need to keep renting from em because they can't get loans for houses they might want to buy due to higher and higher interest rates and probably increasing qualification criteria. At the same time, it will get easier for me to find good properties that can be well-performing, even though the positive cash flow might be less initially until interest rates come down again - which they will have to if we don't want to go bankrupt on our national debt. Challenge: Find well-performing properties during higher interest rate environments and a recession.

If Jay is wrong and we don't get a recession and falling real estate prices, fewer and fewer people will qualify and turn the RE-market more and more into an investor market rather than a resident-owned market. Challenge: Find well-performing properties during higher interest rate environments.

 

@Jimmy Watson Congrats on the deal you made.

there are very few circumstances where someone loses eligibility for VA loans. Others have asked if you still live in the property and only estimated the $2600/month for rent or actually collect that amount. That and your goals are really the most important issue to know to make a decision.

I can tell you that almost all long-time real estate investors have consistently told me is: "I should not have sold this or that well-performing property". I live pretty close to you in Escondido and we both know that there is no way the demand can be filled through construction in our area, so prices will keep climbing. Same for rents. 

If you still live in the property you described you should find another property and use your VA loan again. Ideally, you would have done that after 25 months of living in the property you asked about and keep doing that every 25 months as long as you can stand it.

Converting to HELOC is ideal for you because you don't have any of your own money locked in the property to begin with.

With the money from the HELOC you can buy multiple well-performing properties out of state that generate cash flow for you and leads you to ultimately not have to pay for the property you are currently living in.

I am retired Air Force myself and have built a portfolio of TK properties that pay m,y expenses. If you like to discuss this further, feel free to DM me.

@Lucas Gonzalez Welcome to BP Lucas. As has been mentioned, the BP community is not a big fan of turnkey investing. I differentiate between Out-of-State TK and investing in real estate within about 1-hour drive from your residence. For OOS TK residential real estate investing I can say that my journey over the last 10 years has worked really well and been an example that people like to replicate. That's why I mentor folks who want to get to the Time Freedom Point, as I call it, where you don't have to exchange time for money anymore. 

As prices have increased it has become more and more important to have great relationships with good turnkey providers. That's what has worked for me and my little tribe of mentees.

If you like to chat about it, feel free to DM me.

One final point for your research on the BP platform.: In my experience people have a tendency to voice their frustrations much more likely than their accomplishments and successes. That can give the impression that certain investment approaches or even certain companies are bad or create losing deals. It very rare to read detailed accounts of a series of successful deals. I am working on my 14th deal in TK investing. All have worked out fine so far - knock on wood. If one deal goes wrong for someone, BP often becomes the place to tell and "warn" everybody about it. That skews the picture a lot. Please keep that in mind.

@Reid Sealby Besides the Green Glue I also had good results with the noise-canceling foam material that is recommended for sound studios. I created a little video studio in my house and it really helped a lot. I imagine you could do that in your basement ceilings.

There are also "white noise generators" you might want to consider.

On forward strategy, I would also suggest LTR downstairs and STR upstairs

@Nitesh Gandhi I am currently helping several people who found me on BP. I mentor them in exactly what you are looking for.

We have found that a conversation about your exact goals and likes and "don't likes" is really important before starting to select markets or individual purchases.

I agree with others in this thread that your cash flow goal is too low for the amount of value you aim to purchase.

Feel free to DM me and I am happy to send you a link to my calendar so you can setup a chat if you like

@Dan M. I also generally agree with @Alecia Bolton

One aspect that I am always looking at is work, in addition to risk. If you pay your mortgage you probably have to work for that money. If you use money from the investment sale and get a new investment property that money is working for you as it has in the previous investment property. That's why I always preach performance and making sure any investment hs positive cash flow form day 1. That way you can serve your mortgage without having to work for it yourself.

Equity sitting in your home is money not working for you but you working to serve it P+I.

I write a lot and talk a lot about performance in my posts and this is a variation of it. If you can use money and make it work for you in a well-performing investment rather than sitting dormant as equity in your house, I know what choice I make.

When it comes to performing, you will also have to keep things like inflation in mind. Alecia pointed out the literal performance of the money but keep in m find that we have 7.5% inflation right now. Your money is losing that in buying power, especially if it's just sitting around doing nothing. If your home increases in value by 7.5% and we have the same amount of inflation, you gained no buying power at all.

That begs the question: Who is taking the risk in a deal? As we live in high debt and high inflation times the lenders take a huge risk while you as the owner of the asset take the relatively low risk. If you're giving them the money back, you remove their risk and you live with the devaluation of your money.

In his latest book "Changing world order" Ray Dalio gives an excellent explanation about who takes risk when looking at assets and lending. I recommend it, even though its really long, but you pick and choose the chapters.

If you like to discuss it, please DM and we can schedule a chat

@Paige Hogan Hi Paige. I would keep it too and agree with @Nicole Heasley Beitenman

You could probably already get the HELOC and use the money to invest in a property. Not sure if you really have to go the multi-family route unless you are like me and consider Duplex, Triples, and Fourplex = multi-family. That way you can use the traditional financing approach and generate cash flow.

In your profession, you might benefit from applying the turnkey approach., I have been doing it for many years and it works really well. I used to travel a lot from my consulting company and TK has always been very passive and I can always add more properties. Happy to explain in more detail in case you like to DM and set up a chat.