All Forum Posts by: Anthony Gayden

Originally posted by @Amy H.:

I am a very old school person when it comes to keeping track of goals and commitments (even though I am a millennial and grew up with technology). I have tried using apps on my phone and google calendar, but I just am not into it at all! To keep track of my work schedule, school (I am a graduate student), life / activities (like dinner with friends, young professionals board meetings, etc ), and side hustling appointments and goals pertaining to real estate I ALWAYS use a paper planner. I usually just buy one from Target that's plain and pretty simple. Does anyone have suggestions on any paper planners and calendars that help you keep track of your appointments, obligations, goals, etc? I can get a basic planner again, but I was looking for one that incorporates goals into the planner as well. A friend suggested Passion Planner, but I definitely want more recommendations before I purchase one. 

 I am 100% with you there. I love electronic devices, but I have found that they are not the best things to use in order for me to remember something. When I write it down, it reinforces it in my memory. It is also far more convenient and easy for me to show someone else.

I am constantly making lists, notes, and plans on paper even though I have multiple cell phones, a tablet, and a laptop.

Originally posted by @Nick Foster:

@Cristina Ruffini I would keep the condo and rent it out. Cash flow and enjoy the appreciation. 

Personally, I would not sell the condo and 1031 the money out of state to Ohio. Cash flow may be better with opportunities in Ohio, however, you are losing out on San Diego's phenomenal appreciation and you would have to hire out of state management, whereas, you can check-in on your investment now with a short drive.  

 I disagree.

First of all let me say that I do believe strongly in appreciation. One of the points that was made on that podcast though had to do with return on equity. This point was not lost on me. Imagine owning a $500,000 condo free and clear. Now imagine owning a 30 unit apartment complex. You put 25% down and have $500,000 in equity in that complex. You will not only make more cash flow every month, but you also will not face a loss of 100% of your income during a vacancy. 

If you don't like Ohio, don't invest in Ohio, however there are a ton of great markets with fast growth, great appreciation and strong market fundamentals that are far less expensive than San Diego.

Jasmine Benford It took 3 months for my second property. My first property I bought with 25% down and my bank account was wiped out. Then I heard about house hacking so I bought my second property with an FHA loan and 3.5% down. My third property was an owner occupied single family so I bought it with just 5% down. My fourth property I paid cash.

I have bought three properties using TSP loans. The most recent purchase was an all cash purchase that I am going to refinance.

I personally think this method works best if you are flipping.

Here are a couple of things I learned by using this method.

1. If you buy a personal residence to house hack, you have 15 years to pay the TSP loan back rather than 5 years

2.You can have two TSP loans at the same time, but the maximum amount you can use is the lower of either $50,000 or 50% of your account balance. If you are anything like me and have a far greater amount in your account, you will not be able to touch it, which sucks.

3. If you pay off the loan, you will not be able to take another loan for the full $50,000 for one full year after the payoff date. This hit me hard because I used a lump sum to pay off my first two TSP loans and I couldn't access that money for a long time. I should have just kept the cash and used it to invest while continuing to make payments.

I used to max out my TSP contribution but have realized that it is not the best method for building wealth. I only contribute 5% now which gets me the full government match.

@Account Closed

What kind of investment property could you buy if you had $165,000 cash? Undoubtedly a property that cash flows WAY more than $300, or even $700 a month. In fact if you were to get a 15% cash on cash return with a $165,000 investment, you would be making $2062 a month.

Why do I bring that up? Because it illustrates just how poor an investment it would be to have $165,000 invested in a condo that only pays you $700 a month. Your cash on cash return at that point would be only 5%. Not only that but you would only have 1 door. Meaning that if your tenant moves out, your income goes to $0.

Instead I would put that $165,000 into multifamily. If you are truly capable of saving up that much money in two years, why not go that route and then make a big investment that is worthwhile.

Originally posted by @Account Closed:

I have either read on the forum or heard in the podcast that you choose your strategy based on your goal(s).

I.e. Rentals create passive income and wealth in the long run vs. rehabbing which has large payoffs in a shorter amount of time but doesn't have the tax or appreciation benefits that buy and hold does.

My question is which strategy builds massive wealth the fastest?

I do not mean a get rich quick thing - for example I figure if you raise enough capital from investors and you keep your living expenses low, you can snowball your returns, with each year being able to flip more and more houses.

You also have success stories like Lance Wakefield.

And then you have the real estate billionaires which seem to be developers for the most part - so would real estate developing be the answer?

 I am absolutely convinced that the best way to build wealth is a combination of the two methods.

After studying what the more experienced investors do to build wealth I saw a pattern.

They buy a property, usually at below appraised or market value. This means that when they close they have already made money.

They do work on the property to increase the property's value. They invest money so that the value increases far beyond the cost of doing the repairs. At this point flippers immediately cash out the gains by selling. This is great if you are trying to build up cash so that you can do bigger deals, but not the best for building long term wealth due to it being more hands on and the fact that you take a larger tax hit.

They look for cash flow. That cash flow covers all expenses and provides them with a return on their investment. They also buy in areas where they will get appreciation. The levels of appreciation will vary depending on location, but the wealthiest investors benefit from appreciation. The wealthier investors hold onto their investments for longer time periods.

They use money made from real estate investing to continue to invest. They use methods such as cash out refinances, HELOCS, and 1031 exchanges to draw out equity and appreciation gains in order to invest in more real estate without facing tax penalties.

@William Crutcher

I only have experience with small multifamily (4 units) and single family so I may be a little biased. I like small multifamily because it gives you the best of both worlds when you are getting started.

Let me give you an example. You buy a 16 unit apartment complex. You use commercial financing, you have a higher interest rate, 20 year amortization, and a 5 year balloon.

On the other hand if you buy 4-4plex buildings (perhaps all located right next to each other) you can use residential financing, a little bit lower interest rate, 30 year amortization, and no balloon. The downside of course being closing costs on 4 separate loans.

Originally posted by @Steve Bracero:

@Anthony Gayden

FB is interesting and intriguing for sure- Are you currently running FB ads on a weekly basis?

 I am running localized Facebook ads on a bi-weekly basis. I have not received much feedback using them, but my budget is not large.

Originally posted by @James Wise:

Originally posted by @Anthony Gayden:

James Wise

I just started using Facebook this year so I am way behind the game in social media.

What is your business? Are you selling Real Estate as an Agent/Broker?

Landlord?

Flipper?

 I'm a landlord and I also am doing a few flips. I'm on your mailing list and enjoying looking at the deals up in your market. It amazes me the cash flow in Cleveland compared to Omaha. No one would ever think that there would be such a difference in relatively inexpensive Midwest markets.

Originally posted by @William M.:

Oklahoma is the base location for all FAA schooling and training as well as having low taxes and low property cost it seems like a good idea. This business is real now it’s called Kim’s place in OKC her web page sucks but every one in the agency knows the location.
I think the Perdiem is more like 59 a day but the establishment has a food and supply thing they do and offer to fill your cabinets for the 59 of course they take a cut also. I was using 39$ a day because that is what they charge for no add on services so that would be the worst case.
Also this is long term Perdiem anything over 16 days. Short term Perdiem is much more in that same location it’s 95 a day and they offer rooms for that also. I was just going on the cookie cutter base price to ease of evaluation and worst case profit.
I was hoping some one could tell me I’m way off on my housing price and list all the things I’m overlooking.

 I attended FLETC (Federal Law Enforcement Training Center) in Glynco, GA and there were a lot of rentals set up on St. Simons Island and other places nearby to take advantage of the per diem being paid to the detailed academy instructors. That's why I think it is a great place for this kind of investment. Southern, GA also is inexpensive and has low taxes. FLETC is also far larger than the air traffic control academy.

One thing I would caution no matter where you decide to invest is that cut backs with the federal government can make a huge difference when it comes to these sort of places. In tight fiscal years, the number of new hires will decrease and the agencies will not pay for as much advanced training either. Believe me, from 2011 - 2014 my agency was on a shoestring budget with only essential travel and training. There was even a government shutdown in there. FLETC went from being over crowded to being half empty. I imagine rental operators may have been struggling in those times.