All Forum Posts by: Thom H.

Jeff is accurate. I'm in that ballpark (i.e number of units) and work full time. I use a good property management company, and gladly pay for the service. It's hard to find a good pm company, but they do exist. For 8% I can't beat the service provided by my pm and would never be able to work full time to continue to grow extra capital for additional purchases without them. For those starting out, I'd recommend finding a mentor that's also owns a property management business. It can serve you two fold ( good advice and good support), but just beware there are a few unscrupulous pm companies out there too. You really need to ask around your area and find one that the more established REI's are using, and you'll probably find a good one. References from experienced REI's are invaluable because they've probably learned the hard way. As you gain experience, you can decide for yourself if you want to deal with the entire business full time and eliminate the pm company. My personal objective is to have enough free and clear to continue using my pm company long term, so I can enjoy the freedom to find and buy more properties and enjoy life. My philosophy is do what you do best and let other experts (property managers) deal with what they are good at (tenants, collections, and maintenance calls at 2am!) and you will grow your business. It's hard starting out to understand this and many younger investors, that I've met, seem to get bogged down in the more frustrating aspects of the business, and never achieve their potential of finding and making deals and gaining wealth. Understand your strengths (and your weaknesses) and focus on your strengths and supplement your weaknesses, and your RE business will get you to 30 units and maybe a lot more!

You will. The first few seem to take forever for us "conservative" types because we tend to be cautious and it takes a while to get the first few purchases working to pay for our next purchases. It also takes some time to build the confidence (otherwise known as equity!) to learn how to live with "good debt". But those first few eventually do gain momentum and will pay huge dividends down the road by compounding into many more units. Stay the course. It can be done, and I've yet to find a more rewarding investment/passion.

Ed, you're getting good advice. Don't let anyone convince you that being conservative or debt avoidance is a bad thing. As Billy says, you have to find what your comfort level is for this business. You have a pretty good plan, keep the bad debt down, purchase a house, build some equity. You will likely find the need to use some leverage at some point, but its really up to you how much let's you still sleep at night. Start out slow, if you're more comfortable with less debt. Get some cash flow going and let it do the work for you. That's my "conservative" approach, and I'm on number 27. It's a long race, set your own pace.

Yeah Rich, they were just too strong for us (UVA) today. Our defense got worn out in the first quarter today (3 TD's and 200 yards before we knew what hit us!) Good luck to BYU in a few weeks! Thanks for the great posts!

Thank goodness I'm better at picking rental properties than college football scores! Congrats to the Georgia Tech fans out there, my Wahoos are limping back to Charlottesville, but I still love them! Go Hoos!

Not knowing your entire situation makes it hard to answer that one Kurt. It's really about your personal comfort level and your objective. It'll also depend on the deals you can find. It sounds like you've taken a buy and hold stance with your duplex. Im assuming this based on the amount you've been able to pay down (great job by the way). Since you're new to this game, I would caution you to take it methodically. Get a good deal or two under your belt and build your portfolio with good properties that make money. It's a long term game if you're buying to hold and build cash flow. If you're flipping, it's a whole different game. Either way, be sure to setup a good rainy day reserve fund. Remember, the more units you have the more chances for things to break. I'd recommend setting aside 3-6 months of normal expenses for all of your units, until you have a few years of experience under your belt. That way if Murphy (Murphy's Law!) shows up, you're prepared. And Murphy eventually always shows up!

I've been at this for a few years now. I started the same way as you. I paid off my house and started buying rentals with my equity line. I am a pretty conservative guy, and a buy and hold kind of investor. This has been my approach and it's always served me well. I'm at twenty-seven units and counting, doing exactly what we're discussing.

Best of luck! You're well on your way! I congratulate you for what you've already accomplished.

University of Virginia Cavaliers! Go Wahoos!!!

Thank you Penn State fans for the gift of missed field goals last week!!! Even I felt bad for your kicker! Hope you guys win the rest of your games this season!

Look out Rambling Wreck!....you're next!!

Consider an equity line on your primary residence. Get you former mortgage company to open up as much credit as possible. They should be willing, given your credit history with them must be good, given your paid up position on your primary residence. You can stay in your home, and use that equity line to finance your next rental. The equity line should have a great rate at this time.

I'm curious what the experienced RE investors here think the potential rising inflation and subsequent potential drop in property values will do to rental prices? I'm a buy-and-hold type, and like everyone else here, I'm concerned with what I see developing with the economy. Assuming some level of increasing inflation occurs, what happens to rents and cash flow? Obviously, higher interest rates result with inflation, so adjustable loans even on good debt will be painful. Repairs and materials assumably get more expensive, owner provided utilities increase, so isn't it reasonable to expect rents to rise with inflation, especially with fewer home buyers given higher interest rates? Would love to hear the experienced predictions...

Dave, Good to see I'm not the only newbie in the Lynchburg area on BP. I've been following BP as a non-member for a few months now, and finally joined this week. Awesome site with a wealth of information. I've been a landlord for a while, but continue to learn every day! As others have said, absorb as much as you can from the site, and seek out others in the industry and learn as much as you can from other investors. It'll save you much time and stress with your first investments, and make you much more successful in the long run.