All Forum Posts by: Rachel Brewster

@Casity Kao That’s really beautiful. I particularly like the part about leaving a legacy for your kids. It shifts the focus to the long term and doing what’s right and fair. 

I just finished reading BP's "The Book on Managing Rental Properties" and there was an interesting suggestion to create a policy binder, complete with mission statement and values, to help you focus on what's important to you and your business. 

What's your mission statement? 

I'd love to hear from people who have written out their mission statement and values, and how that clear vision has been helpful to them. 

@Todd Dexheimer I appreciate the tough love, but it’s not just the money, it’s the education. While it’s unwise to be over educated and never take action, it’s also unwise to be under educated and take action....and I’m definitely the latter! 

I found started looking into real estate and found Bigger Pockets just a few months ago. I need to get a plan and system in place before I buy. In Brandon’s first book, he sugggests taking a year to grow your money and your knowledge so that’s what I plan to do. But if I feel comfortable taking action before that, I definitely will. 

@Todd Dexheimer In both scenarios, the property produces positive cash flow, so I’m not worried about that, just the risk attached to it. 

@Jordan Moorhead How did that guy fine his deal? Was it on the MLS?

Hi @Lee Fahy! It’s nice to meet someone who is looking for the same thing I am. 

There was a 3.1 duplex in St Louis Park earlier this month that was priced accurately. It was clearly a motivated seller and it was off the market in 5 days. I’ll be curious to see what the buyer ended up paying for it (I’m going to look up the Hennepin County property info once it’s posted...because I’m a creeper like that). 

I agree with you, the numbers are insane. It’s definitely a sellers market. For us, I think that means:

1) We can snatch up good deals when people realize they can’t keep up with their mortgage payments 

And/or

2) We have to look for off market deals, a strategy I’m beginning to explore. 

Do you have particular areas/neighborhoods that you want or are you just evaluating at everything that pops up? 

@Jay Hinrichs I see what you’re saying but I don’t love the idea of having another person tell me what my risk should be. Isn’t that how we got into 2008-08? Bankers told buyers they could handle more loans than they actually could? I don’t want to put myself in that situation. I want to create my own definition of risk comfort level. 

Obviously, a lender will stop me if I pass their ceiling but they could also mislead me about what that ceiling should be. 

As I’m researching this, I’m thinking my question might be tied to the debt to income ratio...?

My goal is to buy a multifamily as a house hack by spring 2019, so I have been diving into Bigger Pockets and other resources to educate myself on cash flow analysis.

Lately, I've been working on clarifying my ideal metrics for buying the multifamily. For example, one of my metrics is that I want my payment/house hack rent to be 30% (or less) of my take home income. 

I've always used the 30% rule of thumb when renting an apartment, so it seems to make sense to also do it for owning a home. 

And that's where my question comes in. When are thinking about buying a multifamily, how do you set up this equation? Is it:

A) Mortgage+expenses /income = 30%

OR 

B) MY portion of the rent /income = 30%

I like Option A because it makes me feel safe: If for some reason I am unable to find tenants, I will be able to cover the full mortgage and expenses on my own. 

Using Option B opens up opportunities for me to buy larger/nicer multifamiles. But I'm worried that it could cause me to buy too much property and overextend myself. 

Does that make sense?

Perhaps another way of asking this is: How do I decide how much property to buy? Where's the line between good risk and stupid risk?

@Drew Markert Ah, ok, thanks! 

@Drew Markert I'm a newbie real estate investor and your question caught my eye because I'm planning to buy my first house hack within a year. 

When you opened up these accounts, did you do it under your personal name, an Assumed Name or an LLC? I was under the impression that you couldn't open up a business account unless you had at least an Assumed Name, so I'm curious.