All Forum Posts by: Juan Pardo

Very brave of you to share this experience. These forums are a great place to seek wisdom, but they are not the same as real experience. Newbies, be careful. We stand on the brink of another huge recession. There will be opportunities, but the experienced investors know what to look for. Consider partnering or passively investing with an experienced investor until you are ready.

A lot of people might disagree with my decision, or question it. But I am leaving a family business that I have been a part of for the last 6.5 years. I finally gave a months notice last week. This has been debated in my head for a very long time. 

Am I financially free? Definitely not. Has Real estate given me the opportunity to pursue what I love? Yes. 

Over the past 3 years I have invested part time in Real Estate (a full time side hustle basically). I will own 3 rentals next month, and will be selling my first house to have a good chunk of reserves for when I leave this job. I have also started my own construction business, and have been doing side jobs over the past year. People tend to like my work, so I have jobs lined up all next month going into December. I also have a subcontractor position working part time for a reputable contractor in the area. 

I have a lot of security at my current job. A steady paycheck making 75k a year, Health insurance, company vehicle, and a company cell phone. But I am also tied to a leash, and working a job I don't like. I am constantly waiting to lock up the shop so I can get home to work on Real Estate. I am currently working 11 hour days, driving 50 minutes to and from work every day. Over the past 6.5 years I have seen my mental health deteriorate and my eyes have become tired. Im 32 years old, but I feel 55 here.

When im working on real estate I feel alive, and intelligent. I get to be creative and call the shots. I get to watch my vision come to fruition. For me, that is well worth the pay cut and leaving. I will have 60 more hours a week to pursue and find success in what I enjoy. I can spend more time with my family, and watch my son grow.

Will it be a tough year, two years, three years? I believe there will be a lot of challenging and pressing times. But I know that it will be worth it in the end. Real estate has really given me the opportunity to make this decision. Im not financially free by any means, but the progress Ive made so far will give me more opportunity. If I never invested in real estate as a side hustle, I would never be able to take this risk.

I am grateful for Biggerpockets, and the community here. Especially all the help ive received over the years. Especially @Steve Vaughan & @JD Martin. Heres to many more years of challenges, and happiness! Exciting but scary times, and I am hopeful it will turn out to be the best decision I ever made. 

I’ve heard some people state that they are waiting till after the elections to invest in property and wondering if it’s a major change whether who wins.

This is common during any election. If a new President is elected, it can have a major impact on the economy. I think it's pretty obvious to an objective observer that President Trump would be good for the economy, as he has been for the last 3 1/2 years. Biden as President would be a major crap shoot, particularly with some of the plans Democrats have in place for higher taxes, the energy industry, defund-the-police movement, rent moratoriums, etc. Depending on where you live, Democratic leaders will be hiking taxes to help pay for property damage caused by "peaceful protests" during the last six months and there may be more to come, depending on the outcome of this election.

I don't know if I would wait until after the election, but I would certainly be careful about location of investments.

 its was not bought a property wrong or bad, its about some one just steal your money and ran away. nothing  to do with the property itself. if some one took 120k cash from you and only did 40% of the job run away , do you know what does it mean to the property ? even your property is in the golden area, what can you do? you don't!

Okay, I'm tired of hearing how easy it is to BRRRR. And the numbers people (eh hem, Brandon) are not realistic IMHO. One example Brandon gives is $200k purchase, $40K fix, $10k soft costs, $350K ARV. First off, finding a 200k purchase that only needs 40k to be worth 350k is not common. I'm not saying they are out there but it is extremely rare to find such a deal. again, IMHO. If you have a wholesale business set up and can get great deals yourself, then this is more likely. Second, 10K is soft costs is just not accurate. Let's look at the numbers here: 5K points, 6k interest, insurance, title insurance, closing costs 5k. So 16k, not 10k. Now refinancing. Anyone who can get 80% on the new value has a great bank and I want their number. More realistically in this day and age is 65%. Now lets look at those numbers in a more realistic light:

$200k purchase, $40k rehab, $16k soft costs, $320k ARV (a 120k spread on a 300k house is great).

65% of 320K is 208K loan.  You are all in at 266k.  You need to come up with 58k.  If you want to do 5 houses in a year, that's 290k you need out of pocket.  And lets not forget seasoning.  Another PITA issue to deal with.  So Brandon, it is not as easy as you make it out to be and unless you are getting absolutely screaming, killer deals, it doesn't work without bringing a good chunk of money to the table.  I have done it and so I am not saying it cant be done and I am not a bitter "I can't do it so you're wrong" person.  It is just very hard and those deals are extremely rare.  Would love to hear others take on this and experiences

How awesome are rates right now?! Right?! I feel like the common theme is “take advantage now.”

My thought though as I was eating a bowl of Captain Crunch this morning was...

If I bought another property today with plans to sell in the future. If rates went up. Would that hurt my house sale value? It seems like if rates were higher when I was trying the sell, the buyer would be having to pay more in interest. With higher interest wouldn’t that mean less money in my pocket for me on the actual sale of my home?

History would probably show my house would still appreciate. But would higher rates when selling cut into that appreciation amount?

No one knows the future. Unfortunate there’s no magic crystal balls. I was hoping to hear if this concept is correct. Or am I missing something and that wouldn’t be a thing?

Just looking for opinions on this..

Current situation is 25k of personal savings, looking to buy my first rental house between 60-85k, 30 yr fixed, plan to mortgage around 400, rent for 900, profit 500 per month which I will reinvest to the next and so on.

Question is- do you get in now and start making money? or give the economy and housing market 3 to 6 months to see if COVID impact flips the supply/demand and changes rates for the better.

Nothing wrong with waiting however if our current president remains in office I fear govt bails out the banks and prices only continue to rise from current.

Any and all opinions appreciated, looking for the general consensus. If you were in my shoes, buy or wait?