All Forum Posts by: Jacob Sampson

I'm pretty boring and not all that creative. I buy all my investment property of the MLS and have a particular realtor I use, every time.

One of the cons will be that you won't have time to know if you are dealing with a  good realtor or not.  If this is a buy and hold purchase, I think the bigger problem will be to be willing to wait around until you find an actual deal.  One that actually cash flows.

I have yet to have a good experience with Hubzu or even close a deal through them.

I didn't start an LLC until we had 7 properties. I just didn't care until I had made enough forward progress that I wanted to protect it. This is certainly a question for a professional since your financial situation will be entirely different than mine.

Currently I have a $1,000,000 umbrella policy and all properties are owned by an LLC.

You shouldn't have trouble getting financing but you are going to have to personally sign for the mortgage.

Welcome! and if you don't lose money you will meet your goal.

Take some time to breathe and build up cash.  There's nothing like a big 'ol pile of sweaty cash.

And congrats on home purchase!

@Bradley Marion

If your property pays the mortgage and has $200/month left over but your long term average for vac & maint. is $300/moth then your property is not cash flowing.  It is cash flow negative by $100/month.

Now, to make it more complicated, if on average you buy down principle by $200 a month then, assuming the property holds it's value, your property is technically profitable by $100/month but cash flow negative $100/month. 

Principle buy down falls into the profit side of your finances.  So all cash flow is profit, not all profit is cash flow.  If you are long term buy and hold, you WANT true cash flow.

The calculations, that I gave in my previous post, are not possible in very many markets, but if you can make those work you have a large margin of error.

@Bradley Marion

Both @Account Closed

make solid points and the difference in there approaches show why this industry is so fun.  There are so many ways to do it.  Also, it's not and either/or you could try putting 50%-60% down so that you are pretty safe but can still take advantage of some leverage.  That also allows you to send all your employees (tenants) out to work and help you pay down the debt.

More important, IMO, than exactly how much you should put down, is that you buy properties that ACTUALLY cash flow. That rarely occurs. Rent - 30%(vacancy and maintenance) - PITI (on a 15 year note) = reasonable expectation of long term cash flow. I do regular 20% down so in my case with the above numbers the actual cash flow needs to be at least 12% CoC ROI.

Thoughts?

I would echo the above statements and add that it all depends on your goals, finances, skill sets, and ...

If your ultimate goal is to get into buy and hold and you have the finances to do it, then go for it.  One is not a stepping stone to the other.  They are entirely separate job descriptions and come with there own pro's and con's.

You have a nice property.  I don't think I'm the buyer for you.  Going forward, if you have any questions, I'd be more than willing to share my opinions.

You can definitely build something into the lease where the tenant pays a portion of utilities.  Depending on rents in the area you may have to lower you rent to do that, though.

IMO, you are paying too much for the property.  $108k max.