All Forum Posts by: Chip Martin

Liking this book so far, but having a hard time wrapping my head around an example he provides on page 72. He financed the sale of one of his properties and I’m not sure how it makes financial sense for him.

His existing mortgage: $264,000
interest rate on his mortgage: 7.25%

He then sold this property to a buyer

Sale price: $380,000

Seller Financed Mortgage with $40k down: $340,000

Interest rate: 9%

He then says he is earning $4,620 per year on the interest rate spread he created (.0175 x $264,000), which is true. 

What I’m having a hard time understanding is, wouldn’t he make more money if he just sold it outright? He would make $116,000 ($380,000 sale price - $264,000 existing mortgage). He could then even invest that in an S&P index fund and earn ~$8,000, which is much more than he’s making on the $4,620 from the interest spread.

What am I missing? I know my above logic doesn’t factor in taxes on the $116,000, but even if they are factored in, he still seems better off in selling outright.

Alessandra, I highly recommend @Tom O'Stasik if you are looking for an investor friendly realtor in the Tulsa market. His in depth knowledge of the area and real estate investing has been immensely helpful to me as a long distance investor from Denver that is also looking in Tulsa.

Good Afternoon BP!

I am looking to start doing some long-distance real estate investing, and David Greene's Long-Distance Real Estate Investing book has made me realize how important it is to have a solid team in place prior to making a move on a deal. He has a ton of great tips on how to find investor-friendly agents and property managers (e.g., Online reviews through Zillow, Connecting through BP), but I'm curious to hear what other practices folks within the BP community have used to identify and select their core team members.

Thanks!

Chip

Good Morning BP!

My name is Chip Martin and I am very excited to start my real estate investing journey. I randomly bought @Brandon Turner's The Book on Rental Property Investing, which did two things for me - 1) it opened my eyes as to what was possible in the world of real estate investing, and 2) it introduced me to BP and the great community of real estate entrepreneurs that tell their inspiring stores. Ever since reading The Book on Rental Property Investing and learning of BP, I have devoured countless hours of the BP podcast and have been accumulating real estate books faster than I can read (currently have 5 waiting on the shelf as I read David Greene's Long-Distance Real Estate Investing). I tend to buy all the real estate books that are recommended by the guests. As you can imagine, I am looking to start my real estate investment career in a different market since Denver, CO isn't known for its ability to churn out countless rental properties that produce positive cash flow. I'd love to connect with some BP members that have already walked the path of long-distance real estate investing and talk through how they chose their market and how they set up systems that lead to their success. 

Look forward to engaging with you all,

Chip