All Forum Posts by: Tyler Weaver

With a family you have 4 main options

1. Live in Flip

2. Buy properties that you can later rent out with low down payment loans - Live in them, move out and rent. Variations include buying distressed and rehabbing. 

3. House hack, but with side-by-side townhome style multi and rent out the other unit(s) 

4. Invest the "normal" way, getting traditional loans on rentals. Either focusing on increasing your revenue from your job, building value in the BRRRR model, or a combination of both.

Quick estimation of scale. Kind of like saying "O I flip houses" vs "In the past year I have flipped 10 houses." In a conversation that is useful because the first statement will likely get a "that's cool" response where the second will typically get a follow up question. 

I would look into house hacking with a 4 family property using a VA loan. Getting as large of a property as you can. By this I mean buying a 200k property that brings in 2k/month vs a 600k property that brings in 6k. Since your out of pocket with the VA program is minimal, these properties will get you much better loan paydown over time. Also if rents go up 2% a year, would you rather your starting point of $500 a month or $1500? On a conventional loan with 20% down, these properties usually do not offer as good of a Cash on Cash return. With 0 down it can be much more attractive.

Rich Dad Poor Dad is a perennial favorite around here. 

Most syndicators say they control x doors or x units. You could say you have an interest in 18 units, manage 18 units. Saying you own 18 when there are various partnerships or syndications is a bit tough because then the next thing you say has to be some sort of backpedaling or caveat to the statement.

With owning the car, there is definitely a sweet spot as far as depreciation vs maintenance while still driving around something decent somewhere around 4-10yrs old. Not having the negative cashflow of holding after it is paid off is definitely a positive factor. It may also be good for your borrowing ability. 

So you have 3 kids, are going to school, and are itching for something more to do? 

Finding an investor, wholesaler, or similar to work for in some capacity would definitely get you more skills and exposure to different business models. 

Driving for dollars could be a way to get started, learn the process, and is super flexible in that you can do it whenever you want. You can then cold call and mail the properties you identified. Either send the lead to an experienced wholesaler and do a JV with them of some type on the deal, or work closely with a buyer or two like recommended in the book If you can't Wholesale After This: I've Got Nothing For you.

Personal finance "experts" all agree that a lease is a bad deal. It is also nice. Knowing you have already contracted to trade in a vehicle every 3 years. Not being bogged down mentally about owning a depreciating asset. Being honest with yourself that the vehicle is just an expense.  A lease is just a luxury product in my opinion. 

Now the equity in your car is also "dead equity." It is not earning you anything.

The concept of thinking in terms of how many houses it will take to pay for a new car, house, boat, jet is covered in Rich Dad Poor Dad. Also 4 Hour Work Week for that matter.

If you were able to buy a property that has a cash on cash return equal to the new lease payment. Great! You used your equity to basically lease a vehicle in perpetuity. But wait, theres more! Over time you reap the benefits of principal paydown, depreciation write off, and appreciation. Over time the rent should also go up. In this case, so will your car payments so its kind of a wash.

The only problem I see with this plan is that 10k equity might not be enough to buy enough cashflow to lease a similar vehicle to what you have now.

@Peter Sukits I would recommend you check out Joe Fairless' meetup in Cincinnati. It is currently zoom presentations, but when it becomes live again, the networking portion is invaluable. https://joefairless.com/best-e...

I have had success with the postcards at yellowletterscomplete.com I forget if it is them or yellowletters.com that has been on the BP podcast a few times. I have used both and the process is super simple. Send them a list of names and addresses, pick the template. You can change the wording, or leave the same and they mail it.

There are a few factors that could come into play here. On the surface it looks like it could be a good deal. Your expenses when underwriting are probably on the low side. You want to be conservative with these. 

Are the property taxes based on a value similar to the sale price? If not, you should adjust them to the sale price because they certainly will adjust once they see the transaction.

Is the 2.75% adjustable? If so you will need to consider what adjustments in the future will do to your cashflow. 

You can verify that the market rent the same as what they are quoting by using rentometer, going to zillow, and craigslist. Make sure that the actual units are comparable to the condition of the property.

The property could have deferred maintenance that you would have to address before the next tenant. Which could cost a decent amount out of pocket.

Probably want to calculate a higher vacancy rate and include property management fees in underwriting. Because you may decide at a later point to hire the work done. It also does not really reflect investment profit. It is more like buying a job for that roughly 10% a month.