All Forum Posts by: Mike G.

What you say is true, if you want to grow "your empire" ad infinitum. That could be a buy and hold strategy where you are banking on enough positive cash flow or passive income from enough units, never paying anything off and leveraging one property to the next.

However, my thoretical strategy goes more like, maybe a 15-20 year strategy of buying, say only 10-20 SFR total (average value $250k w/ $2500 a month rent, each), fully paying them off, either with 15 year loans or paying off 30 year loans early, at which point, would just be collecting the full rents (minus taxes, PM, etc) as an income stream/passive income and "retiring" from the rat race. Thats a minimum of $300k-$600k a year passive income and 2.5-5 million net worth (not accounting for any rent increase or property appreciation over that 15-20 years).

Obviously, you would have to aquire the 10-20 properties within the first 5 years or so, so you would give yourself enough time to pay them off in the following 15 years.

Isn't that the most common buy and hold strategy (obviously everyone w/ their own set of target numbers)..?

Sounds like some smart points, however, the strategy of not allowing "excessive equity" in any one property seems to be against the whole investment strategy of having all properties paid off. Which is propably the investment strategy of a huge percentage of buy and hold investors here.

LLC strategy sounds potentially good, however, I have yet to hear someone talk about an LLC that can't be pierced w/ personal assets of the LLC members gone after.

Also, sounds scary when you say, "Umbrella policies also only cover the gap left after your other policies pay out. If an event happens that is not covered by your other policies then the umbrella policy will not pay either."

So what protection would you recommend if the whole strategy is buy and hold with fully paid of properties...?

As a relatively new member of BP, I appreciated the fact that when you saw what you considered misleading info being spread on the forum you jumped all over it..

I think maybe Ali is just trying to discourage newbie investors from thinking they can find 1% rule properties to cut down on some of her competition...:)

"Where will Californians live??" This just sounds like typical worst case scenerio/merchants of chaos trying to get us all freaked out.

Hi @Mikhail Andrade

Have you listened to BP Pocast 103 w/ @Elizabeth Colegrove..? I think she has been successfully doing what you're planning on doing.

Good Luck!!

BP should do a survey on how many BP members use LLCs vs not, but youll find a significant percentage of BP members saying you just need to treat people fairly, get an umbrella insurance policy and don't bother w/ an LLC.

i think it depends on your personal investment strategy and what you're comfortable with to try and maximize returns. 

Have you thought of using the property as a vacation rental? Without knowing much about the property, I would think, a million dollar So. Cal beach community vacation rental would give you better returns than the regular rental returns. Listen to BP Podcast 114, if you haven't already.

Personally I think most investors, on BP would look at this scenario and either sell the house and put the equity into better returning investments or if the numbers work for a vacation rental, see where that takes you. If vacation rental works well maybe, refinance at a certain point, (seeing what equity you can safely pull out with your numbers still working for the property to pay for itself) putting the equity into better returning investments and hope for some good appreciation down the road.

Welcome to BP!

I'm relatively new here, as well, but I can tell you there's a huge wealth of info here on all aspects and angles of real estate investing from an incredible amount of combined years of experience.

Much better than any paid program.

@J Scott

Thanks for the feedback. Sounds like you have a smart 5 year old, putting his predictions on par w/ yours..:)

The videos seemed a little out of touch, but I liked how sure of himself and optimistic he was. It will be interesting to see how this rolls out in the next few years..

Curious on thoughts/consensus of this guys predictions...? 

http://youtu.be/nKq1STLI17g

http://youtu.be/JKCvB6rTO0k

Seems to have some interesting analysis points.