All Forum Posts by: Jeremy Mangen

I am in a similar position as far as the debt goes. Thats a very hard question, always, do you pay down your bad debt before investing or do you invest and use the boost in income to pay down the debt?

What I did is house hack, which allows me to save a significant amount more per month by eliminating my housing payments and using that extra income to pay down my bad debts while also learning how to landlord and manage a property. By doing this househack I get to, as safely as possible, get into my first place for only 3.5% down, learn how to find a deal, analyze it, buy it, rehab it, rent it, landlord/manage it, and I gain the confidence to actually be able to say I'm an investor and landlord, even if I'm still a young and dumb one, at least I can say I AM one. Getting your feet wet is invaluable, but obviously you don't want to go deep sea diving if you cant even swim yet.

Ultimately I think it depends on your lifestyle, your personality, your risk tolerance/aversion, and your safety net. I'm a take action kind of guy, I can't just sit around and I'm very bad at patiently saving. I need to take action. Some people are more risk averse then me and they enjoy the slow and steady path over the sprinting path. There is no right or wrong answer, know yourself, know your end game, and obviously take your wife's feelings into serious consideration, then go from there.

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This gave me great ideas and helped me know how to design this next year so I can maximize my potential. I think definitely one of the most important things I can do this next year is to continue networking and meeting with investors and involving myself in the community. Keeps the dream and vision alive and surrounds me with people who have already done this and I don't have to reinvent the wheel.

Thanks everyone!

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Originally posted by @Brian Ellis:

@Jeremy Mangen congrats on your first investment. You can’t do it all at once, knock down the pins one at a time. Fix the place up, then rent it out. Once you’re done with that you can start paying off the debt while studying for the license. Apply all your effort and motivation into one objective at a time, if you do that you’ll be surprised at how much you can achieve in a short time.

Love this. I do have shiny object syndrome at times and always need to remind myself to focus on my One Thing at any given moment and not let the peripherals or future stuff distract me from whats important now.

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Originally posted by @John Woodrich:

@Jeremy Mangen I knew you were a Cardone guy in the third paragraph when you said you take "massive action" and the final paragraphs confirmed it :)

I would recommend meeting with @Tim Swierczek, he can discuss your situation and help you figure out how close you are to buying another property. If you are setup correctly you could use the savings to purchase another house in a year with 5% or less down. By that point you may be able to legally rent out your third unit.

I am not sure on the "living there" in a non-conforming unit part but a quick call to the city should confirm whether it is ok. I would not expect your realtor or house inspector to have any idea about the ever changing MPLS zoning issues.

Absolutely plan on doing that, thanks John!

I do like Cardone but I also can take some issues with him... as much as I respect brash and bravado and a very no nonsense style, he sometimes creeps over into being an *** and I'm just not down with that. Other then that I love the guy and a lot of his principles :)

How would I be able to purchase another house at 5% or less down? I'm currently operating off the assumption that from here on out, unless I'm using creative financing, I'll have to pay 20-25% down on future investment properties.

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Originally posted by @Josh Cook:

@Jeremy Mangen congrats! I would say build up some reserves/emergency funds since your capital and savings are tied into this property. You never know what will go wrong, especially if the house is older. It shouldn't take too long since you will be making extra cash every month now. Continue networking / paying down debt, get your PM job, find an established local investor and work with him during that time and then look for another property.

100% couldn't agree more with all of that. Especially the creating some reserves. I will be capital deficient by the end of this and want to make sure I've got some reserves. Thanks Josh!

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@Ryan Keenan Banks won’t lend to you the full amount of the property. They require some equity remain in the property, so that’s why you can’t pull out the full amount. But you should be able to pull out what you put in if you bought it right.

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Originally posted by @Tim Swierczek:

@Jeremy Mangen great post! It feels like we know you because of all the info you provided including motivations and your general attitude toward life. I generally agree with your mindset but will challenge you on one tenant, and that is that paying off ALL of your debt is the obvious next choice. In my eyes it is not, that is not to say that I see no reason to pay off your debt, but I certainly do not think its a no-brainer, and I guarantee that it will slow your real estate growth if you do.

I'd love to meet with you over coffee & talk strategy PM me if that interests you.

My quick thoughts on your questions are as follows:

1. Take out an unsecured line of credit and use it to purchase some more investments and use the BRRRR strategy to keep scaling up. ~Why would you ever do this and pay off cheaper secured debt at the same time? This could be a good strategy, but not in conjunction with paying off your cheap car loan to take out expensive debt.

2. After 6-9 months of managing my new rentals, look to join a property management firm in some capacity, working part time so I can learn the ropes with the end goal of starting my own property management firm. I'm considering starting my own PM firm because I endlessly hear about how horrible most of these firms are and I truly believe I can do a much better job than many of them, but first I have to learn the ropes and test it out to see if I actually enjoy it as much as I think I will. ~This is generally a great idea, because of the sheer volume of tenants, and issues that you will see at a PM firm will put you years ahead of other investors. I would not just do it to start a PM company.

3. Try to find a more established local investor and link up and see if there are areas I can help provide value to them. ~ Another awesome idea, you can find these investors at Meet-ups and REIA's all over the cities

4. Get my real estate license and explore the option of making money that way. ~Most likely this is a better way to make money than starting a PM company but in my opinion, you would be better served to work for a PM company for a few years, and then consider this.

5. ?????? ~Network like crazy, meet-ups or REIA meetings.

Good luck

~Tim

Absolutely love the feedback. A lot of good points and good counter points to what I was thinking. I'd love to meet up sometime and chat, I'll PM you.

Thanks so much!

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Originally posted by @Armin Nazarinia:

@Jeremy Mangen- Awesome job. I think if you have reserves you can move into the next property. In order to make a successful business of any kind you need to systematize. Try to systematize your savings for your business and debt so nothing stops you.

Agreed! I will be systematizing and already have been developing the foundations for systems. It's one of my favorite parts of business is systems and process, it's what I've always been best at in my own job so I'm excited to get to do that for myself.

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Originally posted by @Derek Johnson:

Shouldn't have a problem living in your own house, even non conforming. If your serious about maximizing your income and being your own boss do short term rentals on your bottom units. Should accelerate things but its alot more work. In the summer 4k per unit each month is not unrealistic.

That's a great idea. I'll definitely look into that. My concern with short term renting these units is that the walkability score is pretty low, only being near a school and park, and it is in north which isn't the greatest location for any kind of vacation rentals. But doesn't mean its impossible.

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Originally posted by @Jordan Moorhead:

@Jeremy Mangen getting your license isn’t a bad idea. its been great for me andbi love doing it.

You may have some trouble living in a non conforming unit, I’ve heard of Mpls taking offense to that. Be weary of rental inspections.

Thanks Jordan! I've been seriously considering it. I'm not huge on sales but I am huge on business and I think I can overcome my sales weaknesses pretty easily with proper branding and marketing.

I have done some due diligence and my house inspector and realtor didn't seem to think it would be a problem, but thanks for the heads up! It's only non-conforming because of zoning as far as I know, and from my understanding that means I can live there myself I just can't hold a lease on that third unit. But I guess I'll find out as I go.

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All Forum Posts by: Jeremy Mangen

Jeremy Mangen has started 7 posts and replied 39 times.

Post: Fighting fear of failure, or jump in?

Post: Bought my first househack, what do I do now??

Post: Bought my first househack, what do I do now??

Post: Bought my first househack, what do I do now??

Post: Bought my first househack, what do I do now??

Post: Delayed financing question

Post: Bought my first househack, what do I do now??

Post: Bought my first househack, what do I do now??

Post: Bought my first househack, what do I do now??

Post: Bought my first househack, what do I do now??