All Forum Posts by: Joshua Myers

Hey guys! 

First time posting here - stumbled across this forum recently and what a great community!

So I was fortunate enough to buy my first condo in the Greater Vancouver area in 2020 for myself, and the property value has raised by approx $250K over the last 2 years based on comps in the same building. With that in mind, I'm in the motion of getting the property appraised and refinancing the mortgage to jump into our first short term rental condo in the Kelowna area (still evaluating!). Looking for something that will provide healthy cashflow via managing the rentals ourselves. 

We were fortunate enough to lock a 2.3% fixed mortgage rate at the time, but I'm hoping to get some tips from other investors to ensure I don't over-extend myself when buying this investment property. With mortgage rates skyrocketing, and the possibility of renewing in 3 years at a much higher mortgage rate, I want to ensure I do this right and don't get slammed paying two large mortgage payments if things slow down in a recession.

Any tips or insight would be greatly appreciated!

So if they had roughly the same inventory levels most major metros had at 2 weeks of inventory, a 34% increase doesnt even get us to 3 weeks of inventory. 😒

@Joshua Myers, I have no idea why you insisted on writing the first paragraph. 30 years in the work force and 30 years doing my own thing, I never comment on people's behaviors without knowing them. "Not doing that, because you're stealing their deals", no idea why this was brought up. "Do not think you know more than them"..... is that what you see or just a general comment? If I was asking "Will my plan work", then you would have a case. I think there is a serious disconnect with most people when it comes to "Do not answer questions that you were never asked"

I listen to thoughs who help, not those who responses are answers to questions that were never asked. Right now, I am building a list of people who responded with helpful information. Those who talked about why it would not work, will not be on my list. Life is too short for all of that. And I have stopped responding to the ones who just had to have the last word. 

With all of that being said, your 2nd paragraph is already in my mission statement. Everyone has a theshold with what they are willing to tolerate. We are all adults here, and I would expect some better responses from those adults. The ones who gave me the advice that did help, notice they were percise, straight to the point, and nothing else to say. Those indiviuals got great thank-you responses, and after this post fades, I will be going back and read every post to make sure I weed out the ones who cannot respond without telling why "It will not work". 

Sorry to disappoint, but serious folks have zero tolerance for non-productive interactions 

@JD Martin, team is already develop. Like I said, it is baltimore, and its own enity. And the ghetto is not a fear of mine nor will it be a concern of mine. Like I said, I am not following the traditional ways that is wrriten. When I opened my HVAC business, I opened it unconventionally and was able to close it debt free with my unconvnentional ways. Convincing me about Class C&D and about $15k-40k types of houses is not going to sway me. Nor is telling me baltimore is the highest crime city. I live here and fear is does not motivate me to not accomplish. I spend time understanding and making things work instead of talking about why it will not work. 

This is a plan, not a wish, and the plan is develope, along with a management company in place. Baltimore changes block by block and certain zipcodes work why certain do not. And there is tons of houses on both list, which each will be anaylzed and tentants screened. No difference than any other business here. Thanks for the adivce, but that is why I have a business plan, which will be adabpted when needed. It was created from experience and research. Now it is time to execute. And like any scale, it is adjustable. As of now, those are the targets, and I was concerned about the closing cost having a set minimum rate which surpassed 3%, which some one here was nice of enough to answer.

I do not use other people's numbers to tell me what works. I use my experience, good people, action, history, momentum, and a strong foundation to make business decisions, always ahave. There are reasons for my choices. And if I had a nickle for every time someone told me how failure was my destination....... well brother, i would have over 100million nickles. 

Everyone thank you for all your advice. 

Remington - I'm looking for more of a passive investment, so no

Michael K - Yes, in Toledo. I'm not sure if I can get a new property manager or not, I'll have to look into it.

Michael P- $85,000 vs $29,000

 See, this is the problem. You should be thrilled with my post. It's contrarian and gives you guys real feedback and apparently plenty of people agree with me. I call balls and strikes. I still enjoy this forum but let's not pretend it hasn't morphed into a totally different animal the last few years. 

How does a bigger property "not" work?

 Sell the property and invest the now liquid equity as a DP into the next deal.

When your equity is initially built from the down payment (bought), it has the exact same "face value" that it had when it was cash in your bank account.  However, at a 20% DP, it has a real value of 5 to 1.  As your equity grows from the tenant paying down the mortgage (rent) and the economy (appreciation),...both free gifts to you,...it grows on a 1 to 1 basis.  The real value of each new dollar in equity is equal to either the principle pay down or the property value.  When combined with the original equity from the DP, this added equity actually dilutes the original equity with each added dollar.

So, after about 3 to 5 years, I sell the property (other reasons, but this is the reason for this discussion) since by that time the equity should have doubled +.  I then invest the extracted equity into 2 properties with each of the new properties then having a 5 to 1 value again.  The total equity hasn't changed, it's just distributed into more than one property.

By the way, if you've duplicated the number of properties, and the new ones look just like the original one, then you've also doubled the cash flow.  Keep repeating this every 3 to 5 years.

Now before someone says, "that's a lot of properties", ...my answer is, "let's think about this".  You don't have to by more than one property every time you "double down".  Just by bigger ones.  The number$ with $$$ in front shouldn't change.