All Forum Posts by: Jon Kelly

@Matt Friesz HELOC > Cash > OPM > Roth IRA

@Dustin Cramer "favorable" is a subjective word and shouldn't be a concern of yours. 

Residential loans may be tough to come by for you due to: lack of W2 history and DTI.

Commercial loans should be an option. Interest rates will be higher than residential. But, you can still find or create deals if your interest rate is 5%. 

@Jack Perfett I maintain 2 accounts for all of my properties. 1) Deposit - all rental income is deposited here. 2) Withdraw - this is my operating account for all expenses and reserves

There's no reason for multiple accounts for CAPEX, maintenance, insurance, taxes, etc. It's too confusing an unnecessary. Your accounting process will keep track of the categories you're spending on.

I use Excel to track all income and expenses. Stessa is a good option if you're interested in something prepackaged 

@Mitch Vogatsky I was in a very similar situation to you ~5 years ago. I decided to reduce my 401k to the minimum (to receive the company match, but nothing more) and invest in real estate. 

My thought process was: 1. I'd rather have the money today than in 30 years. 2. I believe I can make a greater return investing in real estate than growing my 401k. 3. I assumed the tax benefits with real estate would be just as good, if not better, than contributing to my 401k or a Roth IRA, although I never did a complete calculation.

The most important thing to do is make sure any excess funds are invested in something (real estate, stocks, etc.)... So many people would take the extra $800/mo and buy a new car or go on a trip. Then when you're 60, you're left with a lower retirement account and depreciating assets (but you'll have some killer Instagram pictures from when you were 27). 

@Aaron Cooper Since you already have goals and are committed to taking the next step, I would suggest the following:

1. Define your criteria. What makes a good deal? COC return, IRR, monthly cashflow, appreciation, etc...

2. Choose your market. A market local to you makes the most sense. It doesn't need to be a market on everyone's "Top 10 Best Market" lists. 

3. Analyze deals daily. 

4. Select the best of the bunch (3-10 properties will do)

5. Visit in person. Find an investor friendly agent and see them in person. Even better if you can visit the properties with a property manager or contractor 

6. Make offers 

@Joe Hearn spend most of your time scouring your market for deals. The deals will tell you if it's the right time or not.

@Nathan Gesner thanks for sharing and always looking out for fellow landlords. 

"It must have been going on for years for it to get like that" ... LOL no s***. The place is filthy. 

I'd be curious to know if the landlord is awarded any of the $20k lawsuit. 

@Amanda Thompson cancel and move on! Plenty of other qualified people out there. 

But, please follow the story and post any updates you have! You have us hooked now

@Benjamin Amaral it’s unfortunate the tenant’s car was damaged but these things happen. What if it was a neighbor’s tree or a tree down the block that caused damage? Would the tree owner be obligated to pay for damage? No. As long as it wasn’t due to your negligence you have no obligation to pay.

Your tenant clearly has some financial issues since they’ve been behind “for months” and are looking for ways to not be responsible for their car.

That’s what insurance is for. Deductibles are just part of the game.

@Jacqui Whalley there’s nothing wrong with the way you’re approaching this.

Regarding your issue with #2, simply stop doing it… you picked a target market for a reason (price, location, accessibility, your “team”, economy, etc.).

Regarding your analysis - I think it’s reasonable to adjust variables until you find a good deal. You need to make sure your variables are still reasonable. For example, let’s assume you initially factor 7.5% vacancy rate. Since the numbers don’t look great, you adjust down to 1% vacancy rate. Is 1% vacancy rate reasonable? Probably not.

You can start your analysis with the list price just to get a ballpark sense of the ROI. However, there's a very high chance you can get the closing price to be less than list price.

I like to start my analysis with what I think I can buy the property for. I assume I can get a discount from the list price due to many factors: condition of the property, time on the market, motivated seller, cash, short closing time, no inspection, etc.