All Forum Posts by: Jim Goebel

Paying off sounds like it'd take a while.

Use proceeds to buy new assets?

Refinance the asset and get cash out?

@Jahvis Williams

Hey there again, 

I sure would hope that 70k would be enough in your market to get started.  I guess the trick you might have would be obtaining financing given what you've shared of your work situation.  I doubt you have enough funds to buy something with cash?

I think if I was you I would be motivated to communicate with lenders to see what I could do to secure financing, and depending on your time horizon, I would be interested in buying a place to 'house hack' as it is called.  

@Jahvis Williams

OK, let's try to be a little bit more specific.  Don't be shy or embarrassed or anything like that Jahvis.  Everybody has their getting started story and everybody starts from a different place.  Where I'm going with that is '10 years of earnings' in terms of what you're working with is vague and unhelpful.  If you work in the trades or DOING things and don't have a network or language toolkit where it makes talking about money second nature (I've been there) then just get used to being more uncomfortable and force yourself to talk specifically and candidly about money.  So, back to that question... 

1. What are you working with (specifically, dollar amount) in terms of capital? (As in dollars)
2. What's your current living situation?
3. What are your life constraints in terms of where you're living, family, etc - essentially, are you geographically mobile and able to target a location that provides more opportunity?
4. Oddly enough a ton of people think that working (ie trades experience) is what helps.  It might, but it can also be a weakness.  As Charlie Munger would say (too many times), one with a hammer thinks every problem is a nail.  Try to forget some of what you've learned - and here are my view of the skills that you need to be working on to be successful as a DOER in real estate (ie: not a money pusher) - 
   1. Negotiation Skills
   2. Critical Thinking Skills (asking the right questions) - for instance - why am I asking the questions I'm asking you right now?
   3. Teaming Skills and Working with other people
5. Stop going to events where you're dealing with people that are talking.  Most of those seminars etc I hate to tell you are people that have gotten out of DOING and figured out that they can make money by talking
6. That said, per #5, you do need a good network and you need advice and mentorship.  Get that from people that are active and in the game.  Know how to assess if someone has something to offer and if they're doing the right things.

@Jahvis Williams

Hi

Pleased to meet you.  I think it would help if you provided more of what you're looking for, what you're starting with (both in terms of capital, but more specifically, experience) - and of course, what you have to offer.  You may find a more welcome reception and more valuable feedback if you make a more involved attempt at that!

don't drop a tree on your already challenging to deal with neighbor's car :(

@Jeb Brooks

Welcome!

I'd love to have a forester in my network.  I occasionally have a tree related question as we are possibly diversifying out of real estate a little and into timber...  We will see!  Anyways, welcome and perhaps we can keep in touch.

Jim

@Brian Foote

Hi

It's going to be hard to say precisely without knowledge of your market however those rent numbers are pretty good if I'm seeing the $1600+ for what you're getting into the property for.

The 'gotchas' that I see that I'd want you to really be comfortable with would be that repair cost number - this would have to be a pretty light rehab where you're maybe doing a facelift, etc.  Any major projects would eat through that 10k number very quickly.

Other than that, it looks to me like you're conservative.  I know BP has their own calculator and methods but what we do is just build in a 15% of gross rent multiplier that encompasses capEx, vacancy, deferred maintenance, etc. As long as your rents are good and you're getting the types of properties and tenants you want, this simplifies THINKING about it such that you don't need some crazy calculator and excel sheet to do the analysis on the purchase side.

My view is that is much better time and thought energy spent on the actual construction as there are a thousand ways to control costs and bring value in a rehab.

Get your primary thing figured out.

Consider house hacking if your life / family constraints allow.  Google or BP search to learn more.  Good luck.

Nothing specific about lenders other than try a few. Don't be concerned about getting rejected - it happens. Credit unions I've found to be easier for primary and HELOC lending for whatever reason. Quicker close, lower closing costs, and better rates.... Not sure why.

@John Woodington

Hi John

My wife and I have had these discussions at length.

I don't have any issues with doing this.

Here's a few more possibly related questions:

When you don't know the 'fair market price' is it fair to offer a house for sale or a place for rent, only to later increase the price when frequency of responses support a higher price?  I'd say YES , this is business.  Do you want pricing authority or not?

I'm of the opinion that there's not a ton of morally black and white issues.

Pricing is one of those things that is fluid and needs some feedback to confirm fair market price.

I don't stress it - from both my time going out to do research on what places are worth on the front end, I assume that people shopping know that not every place they reach out on is a winner.

Granted, there needs to be enough 'real' listings and non spam etc there to make a zillow or other place to advertise worthwhile to draw users.  However, my position is that sorting that question out and ensuring quality of listings is a problem for those aggregators, not for us, the investors of the world that need to get the most out of our large investments.

@Matt Millard

I've only read the few posts but you my friend have some conflicts of interest here.

How much crypto do you own?

It seems to me that most fear mongers have much to gain in a worst case scenario.

I for one will express a great deal of confidence in strong institutions including the US government, over the alternative.