All Forum Posts by: John E.

@Alexis Downing 

Welcome to BP Alexis! It's nice to see someone that's from the NOVA area. Finding a mentor is the BEST way to learn about REI hands on and get seem experience under your belt. Check out some local REIAs & find a mentor in a niche you're interested in. The founder of the site, Joshua Dorkin, sees the mentee route as a far better way then splurging thousands on guru "trainings" or "programs" that simply serve to masquerade the upsell to an EVEN MORE expensive course!

Happy investing!

I totally agree with @Brie Schmidt ! The 2% rule may not always work in every market, but that doesn't mean you can't have a cash flowing rental property. The 50% rule is a good rule & I feel w/ a property management company your expenses might run a bit higher than that.

I also believe that in addition to accounting for your monthly expenditures, you MUST have cash reserves. Try to accumulate 6 months of reserves before you go out and spend it somewhere else.

@Aaron Montague I grew up in the Boston area (Malden) and property values seem high in your area. Do you invest out of town? Where in Mass. are most of your holdings?

Hi @Vanna H. ! I'm from the northern VA area too and although I haven't been to it yet, Traction REIA seems to be getting all of the buzz. Check that one out & let me know how it goes for you!

@Brandon Turner & @Joshua Dorkin ... This was my face when I saw the new site! LOL

Nice job guys! It's SOOOO visually appealing! 

Try to look around for other investors in your area & see what they recommend for you. If you hear one name come up over & over again then I think you've found a good one. A friend told me he does this for everything from RE agents to plumbers.

The key is to ask many people!

I think it's AWESOME that you're showing drive and initiative, but 3 months is just not a lot of time to really get started. In REI, as in life, it usually takes time to get the wheels turning and the big bucks to roll in, so I feel that putting a 3 month deadline on your endeavors won't get you much money. I'd also like to echo the sentiment of others in saying that it would be better if you just invest in a REIT or CD (chosen based on your appetite for risk) until you're back...

BUT, and this is a big BUT, I feel that instead of investing money over the next 3 months, you should invest your time into learning about REI & read books that will help give you a great confidence boost and "success mentality". Think & Grow Rich is a GREAT read that I just finished last week and it's life changing. From there I think I would write out my "Why?", Goals, & milestones. Read some great books while you're overseas like the E-Myth and the 4 Hour Workweek, to give you an idea of how to structure your business around you. A great article was recently written by @Brandon Turner...

See: http://www.biggerpockets.com/renewsblog/2014/05/28...

I feel that a year coupled with some books, self analysis/reflection on what you want, smart goals, and building up your confidence level will do SO much more than investing on a time crunch & making a 2-5k wholesale fee.

Thoughts?

@Jana Gruttner The net cash flow will not be $500. You've got to account for more expenses because CF does not equal Gross Rent- PITI! The 50% rule is a popular rule on Bigger Pockets that states: 50% of your gross rents will go out the expense column. This does not include your mortgage or other financing you have to take into account for on the property.

If you still clear cash flow after 50-60% of your rent (including PM fees) then it's probably a deal. The expenses will eat you as a landlord if you do not account for them.

It's a conservative rule of thumb that if used in combination w/ other rules & forms of due diligence that can help you rest well at night because you know your true cash flow!

Hey BP nation! I recently read Brandon Turners 14 Things Real Estate Investors Should Do Every Day and a big one was "Review Your Big Goals".

One of my big goals is to create passive income that I can collect with little hassle and owner financing homes to owner occupants is a business model that I find to be a very intriguing business acumen. It seems that with a loan servicing company it can be truly passive! I know it's definitely not as easy as it sounds, but nothing worthwhile in life comes w/o its costs!

The only problem I see is that unlike land lording, the payments one collects will eventually run out when the loan matures, and the payments do not keep up with inflation!

Would YOU classify income of this nature to be passive?

I'm 15 & I've got BIG plans, so I don't want to start off on the wrong foot.

Thanks in advance!

@Nicholas Landry Welcome! I grew up in Malden, so I know exactly where you're coming from! I think you'll love this site!

Read, Read, Read! Check out the BP podcasts as well!

Enjoy!

"I am more concerned about the return OF my money than the return ON my money." --Mark Twain

Does it really matter how high the rents are on paper if you run the risk of never receiving them at all?

Although higher rents may seem to be an appealing option for you, I wouldn't dare put in a bad tenant in even w/ a great rent deposit. With rentals, as in most aspects of life, you've got to take the long view & see past the euphoria of clearing a higher cash flow right now. The damages, evictions, vacancies, and other costs associated with a bad tenant will almost always far outweigh any short term gain.

Best of luck!