All Forum Posts by: Michael Pearse

@Marvin Sills

My recommendation is to write down your goals then focus on achieving them. You can only learn so much through reading and connecting with others. The next step is to take action. Best of luck

@Chris P.

In response to your question about overpaying based off of the ARV will depend on what you are looking for. Is your goal to achieve cash flowing properties and have a substantial amount of equity tied up in a property? If you continue to hold a lot of your money in a property (equity), your ability to purchase more properties will be slowed down. If you are able to refinance, get your money out AND cash flow, then you will be doing great. Just an idea, best of luck.

@Scott Lyons

Capital expenditures can be calculated into NOI. The extra percentage costed out for capital expenditures should be saved in case something does fail. Yes cap ex can be depreciated if you are buying equipment (fridges, ovens, sinks, ect). What is your end result cash flow?

The 2 ROI I look at are cash flow and cash on cash. NOI is calculated into your cash flow, so you will see the end result there with your numbers. Cash on cash will tell you how effective your return is for your dollar. Note that cash on cash will change (go down) monthly as you build equity if you are not raising rents/refinancing.

@Patrick Fraire

We need more details to make a fair assessment. How many units, current condition of property (any capex repairs, deferred maintenance, ect), estimated tax, are you using property management,  estimated vacancy, and the list goes on. After after all of those calculations, what is the cash flow, cash on cash, cap rate, ect.

@Quinten Sepe

Thanks for coordinating the events. See you out there!

@Dave Smith

Great to connect again! I have worked with mutual savings and citizens national bank. Depending on where you invest, you can narrow down the small banks unique to that area. 

Finding a bank can be a lot of work up front. Once you are familiar with what banks typically ask for, I'd recommend making a folder of all the needed documents. I spent countless times trying to get everything together that gave me more trouble than it should have been. As you progress you will learn how to make systems that will save you time. Invest in the extra effort to get those things situated. It will help in the long run, deal after deal. Best of luck!

@Julian Pilate-Hutcherson

I would recommend drafting a letter of intent that you can send to any real estate agent of interest. That way it will be very obvious for people to understand what you looking for. It will save you time as you won't have to draft a whole new email every time you want to reach out to someone new. Once you meet an agent/general contractor, ect, I would recommend explaining to them your goals and investment strategy. It helps tremendously to think about both sides of the relationship. Show them that you in real estate long term. Tell them that as you make great returns, the sooner you can work with them again to purchase another deal. A really good agent will find deals for you to help you grow, which will in return help them grow. This applies to all aspects of the business. The key is to build long term relationships that understand each other and are beneficial to both parties. Hope that helps!

@Dave Smith

Regarding your most recent question about what a bank looks at when looking to refinance. Typically banks are most interested in debt to income ratio and how leveraged out you are. If you have properties that are cash flowing, banks will normally recognize the extra income after you have owned the rental investment for two years. Depending on the bank, some will account for the cash flow within the first year if you can prove to them the length of your lease with a tenant and how much cash flow is obtained each month. Working with small banks gives you an advantage because you can build a relationship with the people there and you will have the opportunity to show them the strategy and intent of your investments. Once they are comfortable with your systems and have proven to them that you are credible, they typically will not reject a request for additional loans. Hope that helps.

@Jason V. Hi Jason! Books are a great way to keep yourself motivated and hungry in achieving your purpose. Here are books that I have read and would recommend spending time on: Rich Dad Poor Dad by Robert Kiyosaki, Think and Grow Rich by Napoleon Hill, Millionaire Fast Lane by MH Demarco, Never Split the Difference by Chris Voss, and Be Obsessed or Be Average by Grant Cardone. That should keep you busy for a while. I am current reading the 48 Laws of Power by Robert Greene, and the next book I am going to read is The 10 Pillars of Wealth by Alex Becker. 

Set a goal and write it down. Place the goal where you will see it everyday, so that you are constantly reminded of what you are trying to do. Don't forget to take some time and look back a couple of months, and think about what you have accomplished. Then use that energy to push yourself even further. Best of Luck! 

I will have to skip this one due to weather conditions. Keep me posted and I will be on the lookout for the next event!