All Forum Posts by: John Williams

Howdy Jesse! I'd be happy to answer any questions you may have! I manage a real estate firm here in Clarksville, TN that specializes in the purchasing, selling, and leasing of residential investment properties. I'm your boots on the ground and one-stop-shop to for the Clarksville market!

Feel free to reach out!

-John

Have you ever considered getting into private money lending? I am in a similar situation and I have been able to leverage lines of credit in the form of lending. You get to keep the margin on the interest and any points/fees you charge. Additionally, the terms on these loans can be as short as you'd like (6-12 months), which serves as a hedge against fluctuating rates. 

You can partner with someone to find you clients to lend to or you can source the clients yourself (depending on how passive/active you'd like to get). 

I hope that helps! Feel free to reach out if you'd like to bounce some ideas!

Would you consider outsourcing the management of your Airbnb? 

The biggest mental hurdle I faced when entering the STR space was that I did not want to deal with the headaches associated with managing an Airbnb and maintaining a 5-star rating. It is a lot of work! I ended up building a team internally to handle the management and make it more of a passive investment for me. I considered offering this service to others in/around Clarksville, TN but I am not sure if there is enough demand for it.

And if you choose the DIY method, rather than outsourcing management, do you find it difficult to scale?

Does anyone have any advice on how to connect with folks who would like to lend money out of their IRA? I lend out of my own IRA and I understand the process. It would be great to connect with folks who are looking for reputable, experienced borrowers!

Tell be about a time that you learned of a concept that completely shifted your mindset. I think many of us can point to a time in our lives where we discovered something and it just completely changed our worldview. 

One major mindset shift for me was the "discovery" of leverage. I used to be on the Dave Ramsey train and think that all leverage was bad. It wasn't until I bought my first rental property that I saw that the responsible use of leverage was invaluable to my success. It enabled me to experience my first taste of passive income and I saw the tax-benefits and benefits of the buy-and-hold strategy firsthand! 

So, what did it for you? What changed the game? What shifted your worldview?

I don't think it makes sense to sit on cash at the cost of a higher interest payment when you don't have an specific purpose for its use. Not only would you be more leveraged, your cashflow would be lower, and your cash would be effectively withering away because of inflation. Besides, you could be waiting indefinitely for a crash. If you have a defined purpose for the cash, I think it could be a good idea. Keep paying down that debt until you have a clear opportunity to use that cash!

-One man's opinion

Jacob, 

I am in a similar boat! I recently read The Multifamily Millionaire Books (Volume I and II) by @Brandon Turner and @Brian Murray. Volume I focuses mainly on small multifamily, which sounds like it would be most beneficial to you. There are some great nuggets in these books that offer some perspective on the world of multifamily investing. Some of my key takeaways were that it is important to define exactly what you're looking for (Crystal Clear Criteria - CCC) and that, using the stack method, financial freedom through small multifamily investing is tangible and achievable for everyday folks like you and I!

-John

What strategies do you use to scale a SFH portfolio?

The process of building up and saving for a down payment can slow growth. I've had to really on creative financing and sourcing private loans from individual private lenders in order to scale my portfolio.

You've got a few deals under your belt but you have not yet achieved financial freedom. How do you accelerate your growth?

If possible, try to do both! If you can get those funds into a self directed account, you could potentially take advantage of both. I currently lend money out of my self-directed IRA and have the ability to invest in real estate directly. I also borrow from (and partner with) others who have money to lend.

I like to think of it like this: you are the CEO of your own life. One of your jobs as CEO is to allocate resources. Consider that, although your retirement account may have tax advantages, your investment options (and therefore your ROI) may be limited. If you can grow and scale faster by investing more in real estate now, and contributing less to your, 401k, it could be worth it in the long run (even after accounting for the tax benefits). The velocity of capital provided by combining leverage and real estate is hard to beat.

I used to struggle to find the deal, but now I struggle to find the funds! It has proven difficult to secure longer-term financing to grow a portfolio.

I am constantly on the lookout for more private lenders and I have had some success with this route.