All Forum Posts by: Drew Castleberry

@Jeremy Pace

No I'm not looking at this for my first deal, just hypotheticals. On normal deals I looke for $250+, for $0 down I'd be comfortable with $100 but like @Darryl Bass I'd get as many as I could get, but depending on the age of the property. If its an older home I might shy away from it to avoid the certain capex issues that will happen more often than not, unless it was already fully rehabed.

I got the calculations and I'm basing my cash flow after all expenses and reserve accounts. I'm not asking to see where I'm at, I've ran all my numbers and am comfortable what I'm coming up with. I'm asking because I'm curious to find out what other people are comfortable with and to see what their bottom dollar is.

Question for everyone. If you could purchase a property with $0 (not including appraisal, closing costs, etc), what is the minimum amount of cash flow a property would have to have to make the deal worth it for you?

I know there's the $100 a door target for MFH, but what about SFH? For $0 down and being able to get $100 a month cash flow, principal pay down and appreciation of the long term, I would go for it. Even though it's not much money in your pocket it's building wealth. Getting any lower than that I think would be dicey, making it more difficult to build up reserves for CapEx.

What's everyone else think, what are your minimum return requirements?

@George P.

I think that sums it up perfectly! LOL

For me, its when my income from my properties surpasses my income from my 9-5. It'll probably longer than I could realistically quit my 9-5 before that, but that's my goal on paper. It might get to the point before that where as George says, when it's time I'll know.

YES! Split units are awesome. I installed 2 in my basement last year and they work great. Very effecient and cost effective. They are very popular in Asia and the Middle East. The main project my company has in the Middle East we use literally thousands of them. They're still newer in the states and not many people know about them, but I highly suggest them. Mitsubishi units are really good but are one of the spendier units on the market. There are several brands that are just as good and aren't quite as expensive. Just be sure that whatever brand you go for, make sure that it's rated for the space you're putting it in. I actually put in a larger size unit that what was recommended.

Also, FYI do NOT use a pump for your drain system. These commonly fail and back up your unit. Use gravity flow for your drain line and you won't have any issues. If you try to pump, eventually it'll fail and it'll be a pain to fix.

Do it! House hacking is the best way to go! Unless you want to keep your first home paid off, I would suggest doing a cash out refi to and use that cash to purchase your next primary residence, or even a new primary residence and another rental or two. What you're thinking of doing is definitely a smart move, good luck!

Attend the school of hard knocks. There's no better way to learn than by doing. As long as you educate yourself and surround yourself with a good team and support system you should do well. However saying that, you can have all the education in the world and the best people around you, and you can still mess up.

At some point in time something will go wrong, and a project/property will fail. You can mitigate how badly things will go wrong.

THE MOST IMPORTANT THING IS NOT WHETHER OR NOT YOU FAIL, BUT IF/WHEN YOU DO FAIL, HOW DO YOU RESPOND?

Those that are successful get right back up, learn from their mistakes and move forward. Thomas Edison failed over 1,000 times trying to invent they light bulb, and yet he still succeeded. 

Those that aren't successful quit. They let one failure defeat them and many cases define them.

Have a goal. Have a plan to meet that goal. Educate yourself. Surround yourself with good people. Then just do it and don't give up.

Owner financing is a great way to go if you can find it. You won't have the loan origination costs that you would through a bank and everything is negotiable, interest rates, down payment, everything.

One thing to consider is will the cash flow from the investment properties cover your payments on your vehicles? I had this same debate with my wife a week ago and she insisted that we pay of my truck before investing even though the properties we are purchasing will cover the truck payment and then some. Depends on what your preference is and what you want to do, but sometimes you have to lose some arguments to win others!

If you're marketing it to investors, include the cash flow #'s in the listing.