All Forum Posts by: Chris Masons

With an FHA loan he can put as little as 3.5% down Matt. Basically FHA is the only way you are doing this conventionally these days...

IF he can generate a positive with 3.5% down thats a great thing.

Chris

Back in 97 my first real estate transaction was a FHA 4 family with a 5th basement apt. I had every intention of occupying the basement apt. until the owner who was currently living there asked me if he could stay. I agreed and stayed at home with my mom for another few years.

That property basically set the backdrop for me to get experience as a landlord, learn how to deal with tenants, enable me to bank a nice chunk of change to buy my next investment. Above all it showed me the power of allowing other people's money tow ork for you.

I Think it is a great move. Ifit will enable you to live mtg free think how much extra cash that will free up for you. This is invaluable esp. in the beginning.

Sounds like it is a sound property in a good location which is all the more reason to move forward. With rates as low as they are today IMO it's a home run. IN '97 my FHA loan was @ 7.875!!!

Just make sure you do your due dilligence on the porperty and tenants.

As far as out of state investing Icannot comment as I have always felt I need to be close to my properties. NOt to say it is bad to invest out of state as I am sure some ofo the greatest deals are out of state for me - I am in NJ.

anyway, good luck with your choice the main thing is to make a decision and do something!

regards,
Chris

Hi Mike,

I understand what you are saying but the 50% rule is based on holding property for the LONG haul, not just the here anad now. While your newer properties may do well now and may not require 50% of gross rental income for expenses in time you will need a roof, a boiler, a driveway, some masonry work done, etc.. all big ticket expenses that will hurt your cash flow for the year of the repair/upgrade. The 50% rule has all these things already added into the equation/big picture.

There are also other things that come up, eviction, tenant doing major damage to the apt. requiring fixing etc...

I am in same boat as you as well, As my properties are smaller fairly newer with very low maintenance but I am in for long haul know one day these big ticket items will eat my cashflow.

hopew this helps!

regards,
Chris

20k is a great start for a 20 year old. Don't be in such a big rush to do something just to do it though. Keep saving diligently.

As others stated, find what you love to do. Find what excites you.

At the same time alot of hard work pays off. In my teens I pumped gas after school and did landscaping. I busted my but cutting grass in the hot summers but knew I had something bigger in store just didn't know what at that point.

I will say that now IS a great time to invest in real estate. See if you can partner up with someone and buy a nice 2, 3 or 4 family property and get your feet wet and see how you like it. Hard to lose with todays prices and interest rates.

What is your current full time employment?

regards,
Chris

Is there a reason why you don't want to take a loan instead of withdrawing the funds?

At least with a loan you don't get the 10% and of course you pay back the loan with interest but you are paying yourself that interest.

I'd really think twice before withdrawing your 401k or any other retirement vehicle. Try and tap other resources before tapping retirement acounts.

regards,
Chris

I always said banks are in the business to lend money not rent. I think it would cause them to much unnecessary problems and issues for them with the end not justifying the means.......

I think they would much rather sell even at a loss and get these toxic assets off their books.

Who knows though with the landscape changing so much anything is possible..

regards,
Chris

Hi Sanjiv,

I currently manage 4 investment multi families, and am under contract for my fifth investment hoping to close in 2 weeks.

I recently moved and bought a SF where I live now but prior to that I was owner occupying one of my multi families and my tenant was paying 80% of my mortgage which really enabled my to bank a nice chunk of change. Now that house is a full rental that basically pays for the whole mtg. on my single family house.

Having good tenants makes all the difference in the world. That is the single most important thing in my opinion.

We are in a great down cycle and with rates at historical lows now is a great time to get in and buy a nice 2, 3, or 4 family owner occupy it for awhile and bank some money and rinse and repeat.....

Having other people's money work for you is a great thing.

regards,
Chris

Another suggestion, and this was how I did it was I used my day job to build up a bank roll to buy rentals. Yes it will take time, disipline and work but it will pay off.

I manage all my properties and work full time in the IT industry and some days it is absolutely bananas but the fact is I have good steady W-2 income working synergetically with my passive positive cashflow IMO is a great thing. And allows me to aggressively save and fund t ax sheltered invesstment vehicles as my ultimate goal is to retire from full time employment in my 50s with my properties all paid off.

I plan on using this technique until I simply cannot do it any longer or grow tired of it at which point I will hire a PM.

You can do anything if you put your mind to it!

regards,
Chris

Wow, is this "security guard" on post 24 x 7? How is the building secured? Locks? or just closed doors.

I'd maybe go there during day and mention to security guard building is being sold and you NEED to get in and see how he responds. Or like the others said it may be wiser and safer to involve the authorities for this one....

Either way let us know how it turns out Joel....

Godd luck,
Chris

!!. I decided to live at home with Mom to keep mym overhead low. ORiginally Iw as gonna move into the 5th basement apt but loved the thought of banking an additional 675.00 monthly.

I wish I was a bit more aggressive when I was younger just about to close on my 6th Multi family and am aggressively pursuing others investments.

Am in my late 30s now and hope to be able to retirein my 50s and livei very comfortably.

regards,
Chris