All Forum Posts by: Jason G.

Hey everyone! I am currently trying to get all my ducks in a row and have a long-term plan outlined. I know real estate investing will be the way I achieve my financial freedom. My vision of financial freedom is, of course, having my assets pay for my livelihood but also allow me to buy more assets to grow. What I'm trying to wrap my head around is a realistic number of units I need to achieve this goal. At my W-2 job, I am making around 60K a year. This amount is fine because I am keeping my expenses low. But I also know that this amount of money won't sustain me year-over-year for the rest of my life. I haven't put an exact number on what my end goal is yet, but it's more than 55K a year lol.

I'm aware that this COMPLETLY depends on the deal. What's most important to me right now is the cash flow of the deal. Appreciation and tax benefits are just icing on the cake. 

I would love to hear everyone's stories as to how many deals/doors it took for you to achieve your financial freedom and, ideally, a breakdown of what those numbers look like. Now is the time to brag! lol 

Hello to anyone reading, 

I’m currently a freshman in college and here is my situation. I’m one semester in, and plan on finishing out the year.

I have a college fund which contains roughly $60,000 (after this first year, could be more depending on living at home or dorming). Additionally, I have around 16,500 in my bank account/stock market. For work I have an internship making $18 an hour. 

I have thoughts about dropping out of college and throwing all of my college fund money at real estate, but I also feel that if I stay at my company and use my degree I could be making good money (Information Systems degree) and save for a property, then overtime make the transition over to real estate. I always go back and forth, but I always wonder what would happen if I dropped out and threw all of my money (roughly $75,000 worst case scenario if I dropped out at the end of this year) at real estate. 

If anyone has any thoughts of what they think, I would love to hear. 

Starting out in real estate and I don't know what I'm doing. What is the process of buying a multifamily property?

Hey BP fam, 

I’m just curious if I made a mistake of sort here.

I recently left a job that I was at for a few years (wasn’t a good place to be for work/life, etc etc), and since have decided I wanted to be a realtor and still invest in properties. Yes, I understand being a realtor is hard and not quick money and yes, I know that I don’t need to be a realtor in order to do investments. I genuinely want to do both. 

now, with the desire to be an investor and realtor, if I remember correctly, I have to have a stable income for 2 years with a 1099 to get a loan.

Outside of creative financing, there's nothing I can really do at this point, is there? Just save for the next couple years and jump in then? Also, if that IS where I'm at, what would YOU do with your money in the interim? Just let it sit or try to put it in say, a REIT or something until I'm ready to buy?

thank you in advance!

(I originally posted this in the "creative financing" sub forum but I thought it might get a little better visibility in the "starting out" sub forum.)

Hello all,

Looking for a little guidance on how to handle my up coming situation. So I am new to the Real Estate world but I took the first (and biggest) step and am under contract for my first STR closing early November! Super excited to get it going! I am going into this venture with a business partner, he is the boots on the ground guy and is networked with all the right people, and I am providing the capital to get things rolling via a HELOC on my first mortgage. Our plan is to use my HELOC to fund the down payment, closing costs, minor refurb items, and furnishing the STR. All in all were estimating about $30-35k to get this up and running. Once we get it running were going to take all profits from the STR and pay back the HELOC as quickly as possible.

Where it gets interesting is I have around $90k available in my HELOC. So we will have around 60k left in this HELOC will be enough for 1 or 2 more STR's similar to our first. Our thinking is once the first house has the HELOC fully paid back we will then split the cash flow 50/50. The issue that I need help with is my HELOC monthly payment is 1% of my balance, so its always changing. Example, if my first property consumes $30k of my HELOC, my payment will be $300 the first month, then the balance might be $29,800 after that payment, so the next month's payment will be $298.00, and so on. BUT our plan was to put all profits towards the HELOC, so one month it might be $300, the next might be $1,000 so principle paydown will be ever changing as well. Throw another property in the mix and now my HELOC balance might be $70k, with two different properties both paying varying monthly amounts towards their respective balances, that ultimately lump into one larger P&I monthly payment.

I tried to get the bank that my 1st mortgage is through to allow me to have multiple lines of credit against it so I could have a HELOC for each property and keep it straight that way, but it was against their policy to do so. That would have been the easiest and cleanest way I believe.

So with all of that said (hopefully it makes some manner of sense), how can I keep track of each property's true balance and when each property has fulfilled its debt to the HELOC and we can start splitting the cash flow 50/50. It feels like I should be able to use a couple amortization tables and keep track of each property separately in one excel sheet, but I'm not 100% sure how to set that up to be accurate.

Thanks in advance for the insight!

Adam

Thank you! I’m in Texas so I also have high property tax rates that cut into profits. If you can’t make the 1% work what do you use to determine if a property is a good investment? Do you just settle for less cash flow or is there something else you go by?

Good to know. Do you think right now is just an overall bad time to get into real estate? 

Hello everyone. I am just starting to dive into real estate investing and still have a lot to learn before I either buy my first rental property or move and rent my current home. There is one thing that confuses me that I just can’t seem to find an answer on anywhere, at that is the importance of the 1% rule.

When looking on Zillow, every house I find, the rental estimate is less than 1% of home value. I also looked on roofstock, and with all the information that they put in for rental and expense estimates, etc, they all show negative cash flow. Even in my current house/neighborhood, I couldn’t imagine people being willing to pay 1% of what homes are currently selling for. Am I just out of touch with what people are willing to pay in rent, or is there something else I am missing?

I know you can factor depreciation into taxes, but am I correct in thinking that shouldn’t be factored into cash flow calculations?

Hope these questions don’t sound too dumb. Just trying to make sense of things as I continue to read and learn. Thanks in advance for the help. 

Wow, this thread is amazing, thank you @Jason G. for very detailed case study! 

I have question about tenants, you mentioned that when you got your first property through RoofStock, you didn't ask any question about existing tenant. But then for your next purchases, were you able to get additional info about tenants you inherited from RoofStocks before signing up with them? If so, what kind of info could they provide? Is there something to watch out for in this regard? And on average how long does it take to fill your vacant property after the tenant leaves?