All Forum Posts by: Brandon Crumpton
Brandon Crumpton has started 22 posts and replied 49 times.
Post: moving on to the next deal (investment)
- Real Estate Investor
- Los Angeles, CA
- Posts 50
- Votes 3
Well I'm the owner of a triplex building. Can anyone give me any advice on moving to the next deal? I want to purchase another rental building. I'm thinking more another triplex. So what should my first step be. And what should I consider when moving to the next deal? When is it to soon to move on to the next? Please give me some insight! Thanks!!
Post: real estate investors
- Real Estate Investor
- Los Angeles, CA
- Posts 50
- Votes 3
Hello everyone! I live in the Los Angeles area and I just invested in my first property. Does anyone know of any free investment classes or groups?
Post: leverage
- Real Estate Investor
- Los Angeles, CA
- Posts 50
- Votes 3
Thanks! Well unfortunately real estate is expensive here in the California. So there isn't any 100k houses around here. But I have a triplex in which I live in one and rent the other 2. But I want to expand and buy another property. So I'm trying to get as much advice and wisdom from successful investors as possible. But a lot are saying leverage is good long as your saving that cash for a rainy day. So I'm just trying to figure out should I use my own assets (cash) to buy my next or use my first as leverage. Do you know whether not I would be effected tax wise by using leverage? By using leverage am I affected different?
Post: leverage
- Real Estate Investor
- Los Angeles, CA
- Posts 50
- Votes 3
Originally posted by @Dominic Metzger:
@Brandon Crumpton To me it's no different than any other risk assessment. Identify the probability of a risk (such as vacancy) occurring and the mitigation steps required (cash reserves) to cover yourself. As long as you don't over leverage yourself by keeping not enough cash on hand then it's a great way to build wealth.
Personally I rather buy 3 100k houses by putting 30k down on each rather than buy 1 house at 100k. Triple the rent for the same money and it's unlikely you'll suffer some catastrophe on all your properties at the same time.
Post: leverage
- Real Estate Investor
- Los Angeles, CA
- Posts 50
- Votes 3
Thanks! From the way you guys are saying it. It seems it's just gamble. So basically do you think if my pocket cash after I collect rents from my first building is good. Then leverage is good that way if something happens I'll have enough of my own cash to cover it?
Post: leverage
- Real Estate Investor
- Los Angeles, CA
- Posts 50
- Votes 3
Originally posted by @Linval T.:
- Great question and @John Thedford summed it up nicely.
Yes, it's a double edged sword that enables you to take massive leaps forward and risks or can be utilized to the point where you overextend yourself and then being unable to sleep well at nights.
Use leverage wisely and you will benefit from it's advantages positively.
Post: leverage
- Real Estate Investor
- Los Angeles, CA
- Posts 50
- Votes 3
Thanks Drew! Just to begin to tell a lil bit about my situation. I just bought a triplex with a FHA loan in which I have to owner occupy for a year. And I want to purchase another triplex maybe something a lil bigger. I'm new to the property investment market and I want to get a lil insight from investors or someone who has some experience with investing in multi family properties. Also my building is section 8 which in my opinion is guaranteed money. I live in the Los Angeles area. So once again thanks for the advice. Hopefully we can converse more
Post: leverage
- Real Estate Investor
- Los Angeles, CA
- Posts 50
- Votes 3
Originally posted by @Drew Castleberry:
By doing a cash out refinance (assuming your 1st property will still cash flow) it provides you with the cash that you can utilize to use as the down payment for your 2nd property, rather than pull the money out of your bank account. So essentially the equity that was built from your renters in your first property paid for your 2nd property.
A con is that you lose equity in your 1st property and your cash flow is reduced as well. But you gain a 2nd property with no out of pocket expense.
Post: leverage
- Real Estate Investor
- Los Angeles, CA
- Posts 50
- Votes 3
I'm Branson nice to meet you Joe and thanks for the advice. So can you explain what you mean no cash at risk? Also if something really goes wrong can the bank or lender repo all the properties due to leverage?
Post: leverage
- Real Estate Investor
- Los Angeles, CA
- Posts 50
- Votes 3
Originally posted by @Joe Villeneuve:
The pro is you may never need any more cash again. You just refi out of the 1st, use the cash on the 2nd, refi out of that one to use that cash on the 3rd, and so on...never actually spending the cash...just using it over and over again.
The cons, you have no cash at risk once you refi each property, you are reducing your cash flow from each property by the amount of the debt service, but as long as you are still positive you are winning (as opposed to leaving all your cash in the deal, having a higher CF/month, but being behind from the beginning until your CF s l o o o w l y catches up and you break even), you have debt at risk (no wait, that's the bank/lender that is at risk there since it's their cash that you received from that debt). I guess all those cons are actually added pros.