All Forum Posts by: John Brodeur

@Nick Johnson, Another similar website and service is Batchleads. I haven't used it yet, but I am currently looking at it myself.

Agree, there are multiple ways to find deals and they almost always involve finding distressed properties in some way: owner financial distress, owner mismanagement, actual physical property distress, or even overall market distress (ala all of the BP investors who started buying back in 2009 to 2013). 

@Carini Rochester, I disagree....last purchase I made was 247k with appraisal at closing of 298k. Hard, but not impossible.

@Joe Villeneuve, I respect your perspective and absolutely agree that as the value of a property goes up and you increase your equity position your leverage goes down (therefore your ROE also decreases). The essence of your argument is to always reinvest profits and keep your leverage at a certain level in order to keep your ROE at that same level. This might make the most sense for you, but not every investor has the same risk tolerance, time horizon, goals etc. This is why there are so many different ways to invest in real estate and each different way can result in different risk/return profiles for the investor.

As to your argument that cash is the only asset, I will have to respectfully disagree. From an accounting and finance perspective anything that sits on your balance sheet that has value is an asset. Some assets are more liquid (cash, cash equivalents), some assets are illiquid (property, plant and equipment), some produce cash flow (a house), and some decline in value over time (your car). I understand that you value cash highly as the marker of how your investments are performing, and ultimately if you want to access the value of any investment you typically have to convert to cash to unlock that value (pay for goods and services). 

Agree that it's a pretty good idea, probably could find ways to scale it too :) If you get serious on something like this let me know.

Yes, but lets say you want to buy a cashflowing building from a seller in a good area of Los Angeles. There is no work you can do to make that happen right now. It's not a market reality. You can still grind your *** through med school. 

So don't buy in Los Angeles? Realize that the good area's of Los Angeles aren't immediate cash flow positive markets. This fact doesn't negate that there are thousands of real estate investors reaching financial independence in different markets, or with different strategies. I don't know much about the LA market, but I would bet there are people on these forums still making money in LA. The approach needs to be different (maybe value add, or larger multi-family, or it requires off market deals). Similar to the "grind" of med school I am sure there are investors grinding it out to find the next deal.

@Account Closed, and the MD is beholden to working long hours and forgoing significant income during those 13 years, taking and passing medical boards, carrying high student loan debt, medical mal practice insurance, (depending on the specialty seeing patients in extreme times of need ER, Oncology etc.), high levels of occupational stress. 

The point I was making is that nothing is "Easy" including real estate investing, but if you work hard you can achieve big goals and for some a level of financial independence. 
 

I agree that "most" investors won't be able to replace all income via only real estate investing, but that's like saying "most" investors won't become millionaires (approximately 8% of the US population https://www.cnbc.com/2021/02/0... according to this article from 2021, or "most" investors won't become part of the top 1% income. 

Just like any other endeavor there are individuals who succeed wildly, some who fail spectacularly, and the majority who perform somewhere in the middle. 

That being said the broad principles as outlined in much of the Biggerpockets community of: (saving money and not letting lifestyle creep prevent you from meeting your goals, buy right by finding under market deals or "value", do actual analysis on your investment, go into every investment with a plan that includes how it will be managed, rehabed (if needed), financed, and with an exit strategy in place, and continue to have time in the market (in our world the real estate market), are principles that can be applied for any investor looking to grow their net worth and income via real estate. Simply following the above advice puts the bigger pockets reader above the majority of Americans out there living above their means, and not saving and investing for the future.

Is it hard work? YES Is it passive? NO, Will it take time? YES, but these can be said of any business, or road to success. Medical Doctors go to 4 years of undergrad, 4 years of medical school, and then 4 years of residency, plus potentially more time if they do a fellowship. So an MD might make 350 to 400k annually, but only after 13+ years of hard work. 

There is NO short cut to success in life! All paths require effort, grit, a level of intelligence, hard work, humility, and a constant pursuit of improvement and excellence. It just so happens to be that our chosen path involves real estate investing, while other people chose a different path. I think this post is great to tease out the discussion that real estate isn't easy money, or no work. It's a nice dose of reality for new folks (myself included) to put their head down and focus on learning the business, to stay focused on big goals, but to also stay humble along the way.

Hi Luke, I would check out asset based lenders / non-traditional lenders (non-banks, many of these companies offer non-conforming loans that are solely based on the asset that they are lending against (the property). They look at the profitability NOI and Debt Service Coverage Ratio and Market Value of the home to determine what they could lend against it, vs. your income. I am currently working with one on a refinance.

I would check out the https://www.biggerpockets.com/loans section and do some research / review potential lenders there to see which ones lend in your state, and might work for you. Then I would suggest calling 3 to 5 to get quotes on what they would lend.

Good Luck on your continued journey in real estate investing!

Bud, can you clarify why it's a waste of money in your opinion? 

Also I would never say never. Things like the decision to put property in an LLC, buy in an LLC, or buy in your own name is highly dependent on all of the individual factors at play for the investor. There are personal tax considerations, the structure of the investment (sole ownership or ownership with a partner), personal comfortability with risk, the loan products you have access to, personal income, personal debt to income ratios, property income, state of ownership (different states have different rules on transfer tax), and even the future strategy you are planning on taking with your investments etc. The list goes on. We need to be careful with giving blanket guidance to individuals, especially those who are new to REI.