All Forum Posts by: Marcus Johnson

Alexis Zion You must have had no reserve fund for a building the size you rent out which could have broken you financially. As the Fico chart displays above I a previous post, 30% of your score Is determined by how much debt you carry. Also someone mentioned getting more cc's. Bad idea. My wife and I have 1 card that w use of gas and that's it and our credit score are both around 800. Of course we don't carry much debt at all.

Jon Klaus No one eve got wealthy by getting airline miles no matter what they offer. Read the book the Millionaire next door and the self mades never mention that as a key. I don play that game.

@Tyler Jaros

You mentioned that capital is always difficult to come upon when starting a business or buying real estate. The only way I know how to get capital is to work your butt off, live on nothing and save, save, save. Works everytime. Good luck!

I think you have a more serious problem then which debt to pay down and a credit score problem. You in debt up to your eyeballs. Stop borrowing extra money. You cannot afford to buy another property. Pay off your debts.

I live in Richfield, but bought my firs duplex in south Minneapolis. I first tried a SFH in Richfield but the city rules were very inconvenient to follow, like having to put 25% of the repair costs in escrow and the lack of services. I also looked at some SFH's in North Minneapolis bit as everyone around here knows that is a very undesirable place to live. So I ended up finding a beautiful duplex in South Minneapolis that is cash flowing me around $400. Although the taxes are higher then richfield the free services make up for it. Good luck.

Not sure, I suppose it depends on what type of loan your attempting to purchase with. As with all lending, your income, debt to income ratio and credit score will be determining factors. I have a similar question myself, because I bought a duplex with 25% down and want to know how possible it will be to only put 15 to 20% on another duplex. Will It help that I have 70k equity in the property because it was appraised recently and I put 25% down at the time of purchase?

@Timothy Riley still no excitement here in a deal such a that.   Good luck!

@Timothy Riley

Your assuming that the buyer has unused DP to have as backup money after the deal is made.  I personally cannot imagine having 4 properties costing me $50.00 a month and be ok with that.  I strive for equity and cash flow in a good neighborhood to make my efforts worth while.   Also, holdings mean nothing if all you have is lots of assets and equal amount of debt.  That just means you have no networth.  

@Curtis Bidwell

It must be very rewarding for you to have achieved 82 properties and for that you should commend yourself.  Although your way worked for you, I wouldn't recommend it for anyone who would ask me.   Risk is a calculation that affects the outcome of cash flow, debt and the decision on what to invest in.  Some investors are willing to take a large risk and levarage their way into multiple properties.  Statistically, for most people it will ruin them financially.  All it takes is a market down turn, rental decrease, more vacanies due to the economy, a death in the family, a job loss, income loss.  All of these factors can ruin one's financial world.   

Although Mike's cash flow is currently at $300 a month, he still has a very high mortgage payment and not a ton of equity which can take a 30% to 40% dive like it did in the housing crash of 2008 and 2009.   That dive also hurt rental rates, because people couldn't afford the high costs of renting, which at that time hurt property owners cash flow, which in result led to difficulty in paying ones mortgage.   In turn those who needed out of the rental, couldn't sell without bringing money to the table.   

So, yes just using mathematics without calculating for risk, this deal looks to good to be true and as a result, it is most of the time.  So on that note, I don't recommend leveraging beyond your means and putting more of your money into each deal and to allow the extra cash flow to pay down the mortgage and to gain equity.   To me, it's more about not taking such high risks and it's more about being able to withstand any horrible disaster that took place in 2008 and 2009, that bankrupted so many people.   

As they say, risk=rewards, well risk also ='s great losses.  

@Curtis Bidwell   Although that is true, someone who has 10 properties with nothing in the game has little networth, lots of assets and tons of debt, with ok cash flow.  I'd rather have 5 properties, lots of equity, high cash flow and much lower debt and risk.  Plus there are more expensives with 10 properties then there are with 5.