All Forum Posts by: Anthony Gayden

 I own two 4-plexes and 4 single family homes. The single family homes definitely will get you more rent per unit. Also you will have less vacancy and turnover with the single family homes. The tenants tend to stay longer. I have also found that my tenants in my single family homes have less maintenance issues. Another thing is that in my single family homes, my tenants pay all utilities, and handle lawn care/snow removal. In my 4-plexes, I am in charge of paying water/sewer/trash, and I have to handle lawn maintenance. I have also had a cockroach issue in one of my units spread into the adjacent unit because they share a wall. 

I will say that a negative to single family is acquisition costs. Each single family I bought required a separate mortgage, and closing costs for each one averaged $5000. The closing costs for a single 4-plex is $5000. Another thing is that I have individual insurance policies that cumulatively cost much more than the insurance policy for a single 4-plex. Also it is a bit of a hassle keeping track of multiple insurance policies, tax statements, and mortgage information for multiple properties compared to a single one for a 4-plex.

Overall, both strategies are great, and I would gladly buy more small multi-faimly or single family homes if they meet my criteria.

 When I started investing, I wanted my sole focus to be on buying small multi-family properties. I found that as time passed they became harder and harder to find. Eventually I realized that I was either going to have to switch strategies or switch markets. I chose to switch strategies and began investing in single family rentals instead.

@Aaron Amarant

No it isn’t necessary, however after investing for 6 years I decided to get my Nebraska real estate salesperson license. Here are my reasons.

1. To learn as much as possible about real estate so I could build a competitive advantage

2. To be able to see deals ASAP when they are listed and be able to put in a lot of offers

3. To earn extra income in real estate sales

4. To learn better property management for my rentals and possibly start my own property management company

5. To keep me focused on real estate even in the long periods of time between purchases

6. To create a new retirement career/skill (I am eligible in 10 years) for when I leave law enforcement

@Kerrel Gomes

I would think the hardest part of starting for many is the financial aspect. It takes a lot of money to invest in real estate. Even for the person who buys their first property with $5000 and an FHA loan. That may have been a very hard earned amount depending on their income. Fear of losing it would be great.

No one wants to fail, but many do fail and that fear of failure surely slows many down as well.

@Jared Lomker

The problems with California investing is that there are high barriers to entry in large parts of the state.

Keep in mind the median household income in Los Angeles County is $68,093/yr. Real estate investing in much of the state is only an opportunity for the upper middle class and wealthy. People who have hundreds of thousands of dollars to invest. A newbie with $10,000 can’t house hack when a duplex costs $650,000. Heck a newbie making the median household income can’t even qualify for a loan that large.

That's right, you pay yourself the interest. The 5 year repayment can be tough when you borrow the full $50K, so I used it on a BRRRR and paid it back following the refinance.

$1,000,000+ retirement account, zero personal debt (including mortgage), and a large cash emergency fund is nothing to laugh at. It certainly would put a person ahead of 95%+ of the general population. 

I can't criticize people who go the Dave Ramsey route. I admire that those people who may not have the motivation to do more complicated forms of investing still came out far ahead of most people.

I disagree.

A 401K is an excellent way to build wealth and I know several people with 7 figure balances in their 40's and 50's. The money is not in a time capsule, it is earning cumulative interest for the long term.

Some people aren't trying to be the next Grant Cardone. They follow the Dave Ramsey plan, put 15% of their earnings toward their 401K and happily retire with $1,000,000+ at age 60. 

I started investing in my TSP about 5 years prior to buying my first investment property, so there was already a large amount in there when I started investing in real estate. I made the decision a long time ago not to put 100%of my investment dollars into real estate investing. The benefit of doing a 401K is that you can really have the set it and forget it mentality with it. I set a dollar amount to be invested with my job and I never change it. I rarely even look at the balance. One day I looked it up and it was hundreds of thousands of dollars.

Real estate on the other hand is not a passive investment. It takes time to find a deal, it takes time to fund a deal, and there are a lot of moving parts and costs involved. I do invest about 75% of my investment dollars into real estate. The other 25% of my investments are retirement accounts, my brokerage account with individual stocks, and my daughters 529 plan.

By the way, most people aren't "weak old and institutionalized" at the time of retirement if they take care of their health and physical well-being. 

I did my first BRRRR a couple of years ago and at the time I already owned a few rentals. Keeping that in mind it was a lot of work. Dealing with contractors was a headache, and the rehab took a lot longer than expected due to aggressive winter weather. It took a large amount of cash, and the refinancing part was difficult. I did a lot of the minor handyman work myself.

Basically, it was hard and if I had been an absolute newbie prior to this, I probably wouldn't have made it through it. Lots of moving parts. 

If you don't pay off the loan it is seen as a disbursement and taxed accordingly. If you have stable employment, it is a good option, but I would not recommend it to everyone as there are some rules that must be followed. Just as an example, even during the government shutdown, I would have been expected to continue to make payments on the TSP loan, even though I wasn't getting paid.