All Forum Posts by: Matthew McNeil

Matthew McNeil has started 31 posts and replied 686 times.

We are a couple (in our late 20s and early 30s) with stable incomes, good credit scores and $80K to invest in real estate. We are a big fan of the BRRR strategy and have decided to make this our focus. Our goal is to acquire as many houses as we can in the next five years. We currently have 4 SFH that have $800/month cash flow.

I am very curious to learn what you would do if you were in our situation? Would you use the capital to put as a down payment on a large property, or would you use that to buy house cash, fix them up, rent them out and refinance? We live in the Midwest area where we can easily acquire properties for less than $100k.

Thank you for your time!

You're going to get varying feedback from different BP members based on their experience. I'd ditto what Marcus wrote and consider going up in value. I have 3 SFHs in my portfolio that cashflow $2500 per month.

1 Vote

Originally posted by @Amanda Louise Sanchez:

@Matthew McNeil My husband and I moved to Boise 3 months ago and are considering buying a property with a big enough lot to build an ADU. Ideally, we would find a property with an already existing structure that we can flip, but that's difficult to find. We like this approach since Boise is a tough market to cash flow in. Thanks for the article, it's great!

Amanda, yes indeed, Boise is hard to cash flow. I'm getting ready to buy another SFH and the numbers favor doing so at this time, but the prices are increasing so fast that I need to consider other markets. I hope you can find the type of lot you're looking for. Please ping me if you do. BTW - if you get a chance I'd recommend that you download Nampa's Master Plan. Nampa is by default becoming a target city for investors due to the high prices in Meridian. Nampa planners have specifically stated they do not want to become like Meridian and want to provide more affordable and smaller houses to the extent they've challenged builders to construct smaller houses. You might consider Nampa. Regards!

2 Votes

Looks like ADUs might be worth considering. Interesting article;

http://www.buildinganadu.com/what-is-an-adu

2 Votes

Originally posted by @Sandeep Pai:

@Matthew McNeil thanks for the response.. it's awesome to see you made positive cash flow from SFH A class.. Were most of your properties cash flow positive at purchase or did you buy at negative CF and had to wait few years for rent appreciation? Still learning the different strategies out there and yours seems quite interesting..

I always put down 30% minimum then I recast between years 2-3. I've never experienced a negative CF. My CF on 3 SFHs is $2700. Getting ready to buy another one. Now before another BP member replies that I'm buying my CF; don't. Cheers!

0 Votes

Originally posted by @Sandeep Pai:

Let’s say I find a property that’s just barely cash flow positive (I am in the SF Bay Area so its hard to find great +ve CF deals.. not impossible but difficult for new investor). One of my concerns is how to mitigate rent related risks such as:

#1 One of the renters stops paying rent but promises they will pay next month , and then next month..

#2 If the rents in the area go down 3-5 years down the line due to macro factors, suddenly making the investment cash flow negative

#3 If the area downgrades 3-5 yrs down the line, and it becomes harder to find renters at all

How do you mitigate these risks or how have you handled them if you experienced these situations (or others that hit your top line)?

Mitigate? Firstly; I avoid investing in areas or assets where scenarios might happen that you've presented. Secondly; I invest in Class A neighborhoods and buy median priced properties that families with good credit and stable jobs want to rent. I also have a PM that doesn't put up with any delays or excuses from a tenant such as promising to pay rent...followed by another promise.

In 10+ years of owning rental properties I've never experienced the scenarios you've highlighted. Granted, I'm not saying I'm immune to those problems, but I can offer this; if I faced these problems or recognized the potential for an area to "downgrade" as you wrote then I'd 1031 Exchange myself out that door and pivot into a better neighborhood or market or asset class.

1 Vote

Yes, "truly" passive. However, I buy newer and higher priced SFHs with minimal maintenance needs. And, if a maintenance issue is presented my PM does all the research and advises me what my options are in order to proceed. I merely advise them regarding my preference and they take care of everything. My PM contributes to my investments being truly passive.

0 Votes

Can you define or put a date on "upcoming"?

1 Vote

Originally posted by @Paul Flynn:

Anyone else feel like we are due for a little downside? It's inevitably going to happen again...history always repeats itself....just a matter of when???? Then it's buy buy buy

By how? And with what? You can't buy, buy, buy unless you have ALL cash, cash, cash.

4 Votes

Real Estate. I'd prefer $300,000-$400,000 in RE debt with cashflow vs student debt with zero flow. Notice I removed the word "cash" from student debt because a tenant isn't bringing any cash to the table to pay down that debt.

2 Votes

Originally posted by @Bjorik Mutize:

@James Boprie what are you bringing to the table to make him want to mentor you?

Ditto.

0 Votes

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All Forum Posts by: Matthew McNeil

Matthew McNeil has started 31 posts and replied 686 times.

Post: What would be your strategy to invest $80,000USD in real estate?

Post: Anyone building-installing Accessory Dwelling Units (ADUs)?

Post: Anyone building-installing Accessory Dwelling Units (ADUs)?

Post: Does having a property manager make RE investment truly passive?

Post: How do you mitigate rent related risks

Post: Does having a property manager make RE investment truly passive?

Post: Best/Safest place to park $$$ for upcoming recession/correction?

Post: Stocks and housing CRASH

Post: Graduate School? Or Real Estate?

Post: My first sit down with an experienced investor