All Forum Posts by: Eddie Soto

David, 

I've had to think about this a lot lately.  I think the common theme here is risk tolerance....how much or little do you have?  I've chosen to keep some equity in my properties with the intention of paying them off, sort of as security.  Other properties I am willing to refinance and cash out to buy more property.  So you could say I have some but not an entirely risky strategy.  

For me I look at the survivability of the new debt.  If, in a worst case scenario, there is a downturn in the market, would I be able to pay for all the expenses associated with my properties?  There are, of course, many factors that go into figuring out how you would be able to survive such a downturn but that depends on what you invest in and your potential mitigation and exit strategies.  

In preparation for the bad times, I like to have good cash flowing properties that I would have no problem lowing the rents if needed.  The equity I have in other properties keeps yet more cash flow available since I have no leverage on those.  For me it's more a debt balancing act opposed to an "all in leverage strategy."

Best 

Hi Joshua and welcome to BP!

I like your thought process and strategy, especially just getting started.  I think Brandon Turner coined "The Stack" of starting with a low number of rentals and slowly building them up over time.  So you are on to something!

I invest out of State because CA where I live doesn't make sense for my buy and hold cash flow strategy.  I've found that your team is your most important asset when investing out of state.  This takes time, networking, diligence and a whole lot of trust but it can be done. 

Then, as Jordan stated, get really intimate with the numbers to see if they realistically make sense.  I've started to train myself recently to ask, "Why shouldn't I buy this deal?" (I heard this on a podcast somewhere).  It helps put things into an investor perspective.

There are many ways to find and keep property......this is just where I start.