All Forum Posts by: Lionel Li

Buying with cash can also give you an edge on the offering side. I was able to close within 2 weeks which I believe allowed my offers to be the more attractive to sellers. When you throw a motivated seller into the equation sometimes it's even at a pretty steep discount. If you pair that with saving on 1 mortgage CC, it will make a huge difference on your total initial investment. The less you're able to spend the more you can purchase at the wedge of the market where flippers and even the traditional rental buyers can't even touch. Having that wedge can sometimes mean buying or not buying a deal in a market that's picking up.

That's how I initially purchased my 3 rentals and BRRR'd the first 2 so far. Steve's mention about knowing your appraised value should be emphasized..you have to be sure of it or you'll have a pretty disappointing BRRR.

For someone in their late 20's who is fairly responsible (full match from 401k, regular small contributions to a taxable index mutual fund, and occasionally purchases of individual dividend stocks) 12% worth of gross pay including employer match another 20% going to savings (no real housing expense at the moment, just covering certain smaller expenses for the folks)

Do you think that seed capital for an all-cash out of state BRRR investing is more beneficial than say putting a downpayment for an affordable co-op in NYC to live instead of paying rent?

I have 3 rentals in your state, 2 are BRRRR'd I want to buy a 4th, funds lock and loaded but this is where I'm struggling to decide where to deploy the capital..

 Awesome news!!! Guess the deal did work out after all, congrats! 

Love reading about people jumping into apartment syndications in their early stages and very nice increase to market rents. Awesome that you reached out to the experienced and overcame your fears by listening to them. Wish you many more successful deals in the future!

Walter White approves. May I suggest investing in Los Pollos Hermanos as well? 

No but in all seriousness, I'd be skeptical if a retired/absentee landlord was trying to sell me a property for $0.30 on the dollar. In this case you actually know why he's selling it for so cheap. Unless you have the experience to run and turn a business around I'd pass and not have to worry about putting a 2 gauge under every counter.

The best hedge against a housing bubble? Have liquid funds to buy more houses during the bubble burst and descent, that's if you can predict when the bubble will pop. If your predictions/timing is wrong, you've just lost to inflation + opportunity cost x that many months/years.

That's why I don't try to time the market, as long as I have enough reserves to cover my running costs, bubble or no bubble..it makes no difference to me. If the numbers make sense for the deals I'll keep buying. It's those that sell during the dip or have their properties foreclosed on that actually lose because the market will come back.

I agree 100% with @George Despotopoulos. This is money you would otherwise have locked in this property as equity, fair cost for the wealth you would be building if you just Repeat. Your ROI should be infinite at this point with no money left in the deal. That sounds like a win-win situation to me, unless you don't plan to scale.

Hi Anna,

This doesn't seem like the deal that I would want to test if this is supposed to supplement your retirement income along with the long commute from the airport to the area. If I do invest, I would want to fully understand the area and I wouldn't want it to be based on hearsay. Small towns should have every aspect looked at with scrutiny even more so than big metro areas. I would want to see a track record of good growth or reasons for growth and not just one or two years of shortage and high demand. However if you're positive this area is doing well and it doesn't have:

Population decline or stagnation

Companies leaving the area with none taking its place

Declining average income

Rising average age of population

Rising tax delinquencies or foreclosures

I would only take the leap if you understand these and there are still risks such as the aging property which might have a lot of deferred CapEx work which will eat up profits if not forecasted and budgeted correctly. Also, there must be a viable exit strategy. Who will your buyer be when you're ready to sell, how long will it take? Plenty of things to think about..I'm sure you know but it will be very rewarding when you've made a good deal. I wish you the best luck with your investments!

I've just started my investing in RE at end of last year and it's encouraging to see what is possible from all of these successful investors over the years. It's encouraging but at the same time taught me some degree of humility because it makes me think "who or what am I working so hard for? My family is my "why", people who worked their behinds off to try to get me the best education and life so that I wouldn't have to go through that as a first generation American. Having that helps me find more fulfillment in what I do and helps me overcome the hard times at work, investing or just in general. I'm going to continue to work my full-time job that will supercharge my investing ability while soaking in all the knowledge from groups like BP and hopefully "retire" my parents so that they never have to worry about money again.

Hello from Elmhurst! Always good to see people from our local area. I invest out of state, I hope you'll find a ton of value and useful tools to use from BP like I did.