All Forum Posts by: Michael Shenouda

Quote from @Jeremy Taggart:

@Michael Shenouda you can take a 401k loan of up to $50,000. That's enough to do a flip or BRRRR in the Pittsburgh market if you are borrowing hard money for the rest. You pay the retirement account the interest so essentially are paying interest to yourself.

I have also used 0% interest for 12-14 month credit cards as well to pay for rehabs to limit the amount I had to bring out of pocket. Then pay the credit card off at the refi or sale of the flip. Pretty sure the first business card I got using that strategy the credit limit was like $50-$60k.

Other option is if you have any Roth accounts, you can pull the contributions out tax/penalty free.

Just some ways you might not have thought of that I know could be options without paying the penalty on the retirement accounts.

Outside of that I would focus on finding good deals. If you can find a really good deal it will make it much easier to get a partner/money on it. 

@Jeremy Taggart Thank you for your response... This is a point I didn't consider regarding loans. I will say for me at least, it would be comforting and a confidence boost to be able to find a mentor or partner for my first couple of deals, even if it means making less. Because I believe the experience would be far more valuable in the long run.

Hello All,

I’m just a regular W-2 guy with a family, based in the Pittsburgh area. Real estate investing has been on my radar for a while now (2022 judging by my post history, lol), and I’ve spent countless hours reading, analyzing deals, listening to podcasts. It’s gotten to the point of where I am definitely suffering from analysis paralysis.

I'm especially interested in Fix & Flip and BRRRR strategies (house hacking isn't an option, I'm not looking to uproot my family). I've crunched the numbers, studied the risks, and feel more than ready to take the next step… but here's the thing holding me back: the only way I could access the seed capital I need to get started would be by tapping into our retirement accounts. And I'm just not willing to do that unless I'm confident this path can work for me long-term.

That’s why I’m hoping to connect with a local partner or mentor — someone active in the Pittsburgh market (or surrounding suburbs) who might be open to teaming up on a deal or letting me contribute in any way I can: time, effort, deal analysis, boots on the ground, whatever’s needed. I’m available evenings and weekends and willing to hustle around my W-2 job to make it work.

If you’re open to connecting, I’d really appreciate the chance to chat. Thanks for reading!

Quote from @Chris Seveney:

Quote from @Michael Shenouda:

I have yet to jump in to Real Estate Properties... I'm a true victim of paralysis by analysis... But your comment about loans being available to first time buyers (i.e. someone like me) evaporating is concerning. That would kill a major source of entry newbie investors like myself.

This would be for fix and flip but DSCR will be around - its gonna come down to how much $ you have - and what will happen is those with money will be able to buy all the deals and get financed if it hits the fan...

That's the point though, if research is done even by a "newbie" fix the flip is a solid easy to get hands on experience in the buying process, identifying scope of work needed,  working with contractors, handing normal expenses as well as the unexpected, and then hopefully profiting in the sale. 

In your scenario new investors will be locked out. 

I have yet to jump in to Real Estate Properties... I'm a true victim of paralysis by analysis... But your comment about loans being available to first time buyers (i.e. someone like me) evaporating is concerning. That would kill a major source of entry newbie investors like myself.

@Chris Webb This is a good idea, I will definitely keep that in mind.

@Nathan Gesner This response is fantastic! Thank you so much for the detail! Like I said, still learning, this is alot to take into account, and invaluable advice

@Nicholas L. I'm still in the learning stage, Evaluating properties, etc. I am definitely more on the "stand-alone" side.

Thank you so much for this! I appreciate the detail you went into. Having numbers really helps paint a picture.

Hello All,

Still learning here so please bear with me!

Assume I have finally gotten to the point I have $30,000 saved up and feel ready to get my feet wet in this RE game. I obviously can't use the entire amount as a down payment; because then I'll have nothing in reserve for any initial repairs or issues.

So how do you decide ok X% of this will go towards down payment, and X% will go towards reserves?

Quote from @Cheryl Packham:

At first glance, it looks like you may be doubling the taxes and insurance.  

Purchase price = 109,900

Down payment = 27,475 

Total Loan = 82,425

30-year fixed at 8% is $605 per month for principal and interest.  (I hope you can get a better rate than that, just for figures here.

You have a mortgage payment listed at $744, which I am guessing you included the taxes and insurance into your mortgage payment as that is the amount you would pay to the bank for them to escrow those items. 

I hope that helps.  

@Cheryl Packham I think you are right, that definitely brings the number closer... Thank you!

Quote from @Nicholas L.:

@Michael Shenouda

What do you mean by "The listing is showing a cash flow of $1,050 / year"?  What listing?

If you calculated a negative cash flow...then it doesn't cash flow.

@Nicholas LThanks for your response... The listing on roof stock where I find the property...

Hi George,

The numbers I'm trying to match are from Roofstock. Most of the numbers on the spreadsheet are as well, I did adjust the PM expense, because from what I see the 8% roofstock uses is generally too low.