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All Forum Posts by: Eric James

Eric James has started 22 posts and replied 2236 times.

Post: Where can I find $250,000 for a down payment?

Eric JamesPosted
  • Investor
  • Malakoff, TX
  • Posts 2,281
  • Votes 2,515
Quote from @Stephen Hollenberg:

I'm under contract to buy a 6 unit, mixed-use property with seller financing. The seller will provide $700,000 of the $945,000 required. They are giving me 45 days to show proof of funds for the $245,000 so I need to find it!

-I can't take any more loans from my 401k.

-I have 3 properties right now:
    -Property A, worth $400,000, is currently financed at around 72% with potential to pull out $31,000 to get to 80%.
    -Property B, worth $500,000, is currently in the process of being refinanced at 80% to pull money out to buy a separate property.
-Property C, worth $600,000, is my primary residence currently financed at 86% with potential for a HELOC to pull out $23,000.

If I can find $245,000 at 6% the property will still cash flow $400 per month at closing after all expenses, 5% vacancy, and 5% toward repairs. With potential rent increases and filling a currently vacant unit, it will cash flow over $2000 even fully financed. 

Any help in where I should look would be appreciated!


 "I could buy millions of $ of property if only I had some cash. What do I do?"

How does that around? That's basically what you're saying.

Post: National housing prices with 2 week lag

Eric JamesPosted
  • Investor
  • Malakoff, TX
  • Posts 2,281
  • Votes 2,515
Quote from @Ari Friedman:

Just ran across this:
https://haus.com/resources/the...

The inventory comparison is interesting, but most interesting is their index reportedly only has a 2 week lag. That means the recent wild ride in interest rates hasn’t really hurt prices. I wonder if the higher end is cooling off, but because their index is based off a pretty modest home, it’s not reflecting that. Presumably some of those in the market for a 450k home are now looking at 350k homes.


 Rising interest rates have an effect. But so does inflation. Recently up to 8.5%. People want a hedge against inflation. 

Post: Pick apart my strategy!

Eric JamesPosted
  • Investor
  • Malakoff, TX
  • Posts 2,281
  • Votes 2,515
Quote from @Jay Hinrichs:
Quote from @Eric Reimer:

@Marty Boardman

Apologies for my ignorance I still am learning the proper terms. Distressed properties is a more accurate term. The properties I am looking at are deceased owners with no deed transfer to a living heir. These properties are stuck in limbo and blow up on taxes until the county steps in. At least that's my limited experience from these types of properties in this area. I simply wish to get to these properties before they become too broken and before the county begins looking into the non payment of taxes too deeply.


keep in mind those are pretty rare circumstances .. so there wont be many of them unless its in the HOOD>

....and there are a number of other people with experience trying to do the same thing.

Post: The question that has never being asked

Eric JamesPosted
  • Investor
  • Malakoff, TX
  • Posts 2,281
  • Votes 2,515
Quote from @Gerardo Gallardo:

Of course I’m being sarcastic here. I have a question about entities. Before I ask my question, I have to say that I have spent a few days looking through the forum and even though I found really good information I haven’t found an answer that fit my situation. 
I'm partnering up 50-50 to do a new construction BRRR with a Home Builder. This person has his own LLC but since he usually build and then sell the houses that works for him. My plan is to create a new LLC where we will be 50-50 partners. Is there a more tax efficient way of getting this done? Are they any implication to refinance the property after built since it will be in 50-50 partnership? I'm currently looking for a CPA to help me set this entity right from the beginning so if you have a recommendation it will be highly appreciated.


 I'm doing that, but on my own. Started by hiring and supervising a crew to work on my brrr rehabs. Now we're doing new construction apartment. 

Post: People don't understand inflation, even some investors

Eric JamesPosted
  • Investor
  • Malakoff, TX
  • Posts 2,281
  • Votes 2,515
Quote from @Marcus Auerbach:

I heard this notion 3 times in the last couple days: going to wait and safe my money until inflation is over and prices come down again, one of them a fellow investor!! 

It seems to me that people think inflation is basically price increases and when inflation comes down to again, the price increases will basically reverse to where they were before, because inflation is just temporary he said. 

I can see how the evening news are pushing this believe when they talk abour rising prices, instead of the devaluation of the currency, which is permanent. We would need negative inflation to go back to pre-inflation price levels.

Looking at a long term inflation chart and the time periods it took for inflation to rise, peak and fall I am thinking this could take a while - maybe another year or two to reach peak and then start to reverse. Home prices will probably do the same, just because the dollar bills are getting smaller. 


 We'll said. Real estate prices will fluctuate. But for "saving cash to buy after inflation has gone down" to work......there would actually need to be a period of deflation. That isn't likely to happen. 


It could be a good strategy to wait to buy real estate if there is about to be a downturn. But that approach isn't likely to work with regards to inflation.

Post: Seller stopped emailing me.. What should I do??

Eric JamesPosted
  • Investor
  • Malakoff, TX
  • Posts 2,281
  • Votes 2,515
Quote from @Rick Albert:

It sounds like the phone is the best thing.

Yes you spent 8 hours in travel and touring, but sometimes people don't view time spent of others like they should. Especially if you were the Seller and never saw you. Unfortunately even as adults, "out of sight, out of mind."


 That's because there are "wanna-be's" who will spend 8 hours......but have no cash and are completely unable to actually make a deal.

Post: Can I retire like this? (3.2 million net worth)

Eric JamesPosted
  • Investor
  • Malakoff, TX
  • Posts 2,281
  • Votes 2,515
Quote from @Jack B.:

Background:

I just turned 40. My net worth is 3.2 million. 1 million liquid cash, the other 2 million is equity in my houses including primary residence and rental properties for a total of 8 properties. Cash flow is about 30K a year because I cash out refinanced a couple years ago to buy more properties with the equity rather than using cash on hand. Real estate has been my bread and butter, it's how I made my 3 million. At this point, I make 1 million a year off of it (appreciation, cash flow and principal pay down). Again, I make 1 million a year off appreciation and such when the market is good, which is most of the time...factor that in.

I was planning on buying two more houses with a total of 300K down to ride the appreciation wave long term, two more houses that will be paid off when I'm older, etc. I had planned on retiring at 40 with 1 million, this was the plan I made when I was 30. Now I have three times that but life is more expensive and complicated than it was 10 years ago. 

My living expenses:

Because I rent out part of my house, I mostly live for free housing wise. Outside of that my living expenses as far as base are 1K, but realistically 2K. That includes money to date, buy a trinket here and there, etc. To be really comfortable I'd like to have 4K a month passive income in retirement. With a paid off house, in a low property tax state, utilities, taxes, maintenance, insurance should round up to 1K. That leaves 1K for gas, car insurance, food, incidentals, internet, phone, etc. So that brings me up to 2K per month. But I'd like another 2K buffer as I have occasional rental expenses such as repairs, appliances, etc. plus I date a lot and when in a relationship we have a tendency to travel. I've been to Tampa and Orlando 4 times in 3 years with 3 different women (one of them twice). 

The why:

I'm tired of working and life. I've had many recent heart breaks and I don't want to work anymore. I haven't wanted to work for a long time but now I'm really done. I had two health scares and almost died at 29 and 34, I'm not promised another day. They say stress causes cancer. I've worked so hard, MBA, 18 career certifications that were hard to get, own and manage rentals, two full time tech management jobs, two part time jobs. I've been working so hard. To top it off I've had a series of failed relationships last few years. After having a long period of stability with one girl for 9 years, I'm an emotional mess, dating is getting harder as I get older, the women are not as good looking and all seem to have baggage/issues. After a recent life assessment I did, I realized everything in my life that I worked toward came to pass. But my relationships are rocky. I'd like to take time and heal, grow and find a life long forever girl. One that stays. Even through the bad.

How I'm thinking of doing it:

-Relocating from WA to a cheaper part of Texas, Tennessee or Florida. With the equity of my primary residence, I should be able to buy a paid off house for cash. That will drastically reduce my living expenses.-Take 1 million cash and put it in index funds or split between Apple, Tesla, Amazon, Google and Microsoft and live off 3% withdrawal rate of about 30K a year. Supplement that with rental income from properties as is, which is about 24K a year cash flow.

OR....

-Still relocate, but cash out refinance 1 million out of the houses before retiring. Between living off index funds and 1 million pulled out of the houses, that money should EASILY last me 10 years, realistically 15-20 years. By then the rents will have risen enough that they will cash flow enough I don't have to cash out refinance anymore for money to live off of. There are some people who do the cash out refinance thing every few years to live off of. Bonus is that it's tax free, it's a loan so not taxable income.

OR....

-Still relocated, use the 1 million to pay off 3 of the rentals, which should give me about 6K a month cash flow plus another 1K from the others that are still mortgaged. Move into a paid off house and retire. I like this because I've always lost my money in the stock market no matter what I've done. Options, swing trading, day trading, index funds, you name it. But real estate I've always made money. It's how I made my 3 million. At this point, I make 1 million a year off of it...so in a year I'll be worth 4 mil, in 2 years 5 mil, etc. At that point I could really retire without worrying. Maybe I hold off for now and grind a little longer. But two full time jobs, two part time ones, 8 houses and all the studying has really worn on me. Add to that endless heart ache from relationships last few years and I'm emotionally done. I want to destress and go live. 

Some problems with this:

If I move to FL, TX or TN, I'll be too far to manage the properties. My best friend will move with me but he said his parents could help out. So far I've been doing ok with video tours and hiring contractors lately. Not cheap but way cheaper than a PM. Liquidating them and moving them is risky as I may move somewhere else if I don't like it, or move back. But the properties make it very difficult to relocate since they are easier to manage locally. If I hire a PM, all my cash flow is basically gone.

Sounds like your real issues relate to personal relationships and motivation.  These are what you need to change. A suggestion related to this is to check out entrepreneursincars.com 

Post: What's it going to take for the next real estate crash to happen?

Eric JamesPosted
  • Investor
  • Malakoff, TX
  • Posts 2,281
  • Votes 2,515
Quote from @Jim K.:

United States Total Housing Inventory, 1984-Present

I doubt I'm going to be around see that event happen and actually be in any position to invest myself. The trend seems pretty damned clear.


 ??  Inventory always surpasses demand in real estate downturns. That's part of why real estate has regular downturns. 

Post: What's it going to take for the next real estate crash to happen?

Eric JamesPosted
  • Investor
  • Malakoff, TX
  • Posts 2,281
  • Votes 2,515
Quote from @Dennis Maynard:
Quote from @Jim K.:

BP contributors:

I for one believe we're not going to see a real estate crash anytime soon, and I firmly believe in the power of pessimistic thinking. But I'm also not wholly ignorant of all the aspects of this business, and I look at the fundamentals of what's going on, think about why the housing market is as it is, and I don't see fragility. The system is not about to fall apart. I'm obviously not alone here on Bigger Pockets.

But since at least 2015 when I started lurking in the forums here, there hasn't been a month that's gone by where some wannabe Cassandra or Chicken Little DIDN'T proclaim that a crash was coming. I have seen one mature-male-bovine-scatalogical reason after another why these people felt that way. Sure, there HAVE been commentators with what at least LOOK like well-formed reasons since the very beginning, but they were few and far between, peppered in among the many more wackadoodles proclaiming THE END IS NIGH.

So what I'd like to ask everyone with significant experience to comment on something else this thread: WHAT SHOULD WE BE LOOKING FOR? What WOULD signal the end of the road for you?  What will be the warning signs we should be watching out for? None of us have a working crystal ball, but what are you waiting to see before you start to really worry? What, in the end, will signal the next collapse?


 Nope, too much money chasing to few goods (properties).  This is inflation similar to that of the 1970s thanks to the government.  I'm still astounded townhomes in LA right now are going for 200k over asking... 


 And what will happen when inventory catches up with (or surpasses) demand?

Post: Hard money didn’t count as cash offer

Eric JamesPosted
  • Investor
  • Malakoff, TX
  • Posts 2,281
  • Votes 2,515
Quote from @Steven Barr:

We just tried to put in a cash offer on a house, only to find out that our hard money loan could not be consider a ‘cash offer’. 

My question is twofold… 

1. Is this normal?

2. If this is normal, why in the world would anyone use hard money and pay the points, fees, and high interest instead of just using conventional financing?


 They can't get conventional.financing for the.property they want to buy.