All Forum Posts by: Gareth Fisher

Start watching you tube videos on investing.  Kwak Brothers are good,  Ryan schrieber,  there are a bunch of dudes.   In those videos they will often speak of books.   Poor dad rich dad is a good place to start.  

The problem with real estate investing is you take on tremendous amounts of debt that your personally liable for.    There are ways around that for example if you used seller financing then you would be signing a non recourse loan.   I don't know if you own a home or not, but I would say putting the money down and paying off debt on your personal home could be a smart choice.  You would always be able to take it back out and access it again for investing purposes.   

I would say an aggressive approach to investing would be a 70-80 debt to equity ratio, while a more conservative approach would be a 40-60% debt to equity approach.   I would factor in your personal finances into this.

I'm not saying real estate investing isn't lucrative, but on a macro level in the next few years I expect to see a down turn.   There for I personally am limiting my exposure, buy focusing on flips and reducing my debt to equity ratio.       A flip will reduce my long term exposure to market fluctuations.   But still allow me to stay in the game for the near term gains.   Flips however are a lot more challenging from a newbie perspective in my experience.  Rentals are much easier to calculate.  Living in a market like Austin I think exposes you even more.  You could look at recent home sales more then likely the gains are starting to drop and you are starting to see early signs of the trends changing.  

There is nothing like being rich in cash, during a down turn.    This will put u in a position to buy when everything is on sale.   The hard part is identifying the bottom.

If you do pursue buying rentals I would try to do it through seller financing,  that way they are non recourse loans or if you go through traditional lending practices keep your loan to value amounts below 60%.  That way if your local market drops by 20% you still have plenty of equity.  This will also allow for strong cash flow on your properties.

Keep in mind most of the investors you will meet and talk to have made money over the last 10 years and can't remember the crash of 2008.

First rule of investing Don't ever lose money.

 I would look at maxing out your 401k every year from a long term perspective thats a really good place to start.   Most people should be saving 15% a year for retirement. 

Anyone else concerned with the debt crisis?   How are you positioning your self defensively?  How much cash reserves keep on hand. 3 months, 6 months, 12 months?

I don't have to season any of my properties.  There are banks that don't require it.

Ck with your local federal credit unions there the easiest work with.  Something to keep in mind is that we are in late stages of the cycle, so you may only want to borrow 70 percent of ltv.   This will you leave a bigger cushion and better cash flow.

Sorry for your loss.    Investing full time I would put on the back burner.   Its kinda like the game of chess imo, at first it seems simple but after awhile you realize the more you know the less you really know.    

If you would like to buy a rental that's always not a bad idea but however keep in mind we are on a 13 year run and in late stages of a cycle.   No one wants to buy a dropping knife.   However if you can a get a house for 70% off or so, that will leave you a good cushion.  However in many markets finding a deal like is very difficult and takes lots of experience.    

Stocks are once again currently over bought as of March 1st 2019.    

I personally believe there is opportunity in China.    Trade deals are looking to be resolved. They have been in a downturn so there is a lot of room to run.   There early in there long term debt cycles and a young country.    Emerging market etfs, mixed with some bonds and cash.  

I would put some in an high interest yield savings accounts, In case what ever investment decision you make doesn't work out.   If your new to investing,  I would probably put half away.  See what you can do with 50k for the next 5 years.  By then you will be a lot more savvy.

I don't foresee real estate performing as well in the next 10 years as it did in the past 10.  jmo

It is currently oil, so im guessing 2-250 a month.  Over the winter.  

The meters would be free. 

My dad argued if I passed off the oil costs, to the tenants.  My net operating income wouldn't improve at all, by switching to gas since they would be paying the oil bill.

Others have said splitting utilities is always a good idea. You attract better tenants with gas as well as decrease your vacancy.

I thought gas would also add value but my dad thought it wouldn't change the arv at all.

Im currently doing a BRRR on a duplex. It was a 2-1 br units. I added a br to the top unity by converting the attic. New paint,carpet etc since it was trashed. I was planning on adding 2 separate gas meters and 2 gas boilers. Currently the landlord was paying oil heat. My dad argued that spending the 10k to do this was a poor decision. He said it wouldn't increase the value and I could just pro rate and charge the tenants. My original plan was to split the utilities and spend the 10k, thinking that it would increase the value of property due to the higher noi.

Would you guys agree that it would increase the value of the property?  

I purchased it for 76.5   

I had about 3 in closing costs,

I have about 8-9k in the 2 br conversion rehab.

and would need to put another 10k into it to split the heat.

I hope the ARV will come out to 115

So it seems like splitting the heat should be a good idea.  

Any thoughts?

 Should I even be using my personal funds to pay debt? or should I let the rental incomes take care of that.  Use my personal income for other stuff.  It all seems to be a wash at the end of the day or one Giant math problem.   The one mortgage is at 4.5   how ever what I look at my payments I'm only paying a 100 towards the principle and 300 towards interest.   I'm assuming that's because its a scheduled.   Seems to be a lot more then 4.5.