All Forum Posts by: Nick Barlow

@Diana Dorantes what @Brandon Koster said-I’m buying if a deal makes sense. I think the government will backstop prices with continued low interest rates. Combined with lack of inventory, prices aren’t going down, in my opinion, for another year or so.

@Jacob D Adamczak I started with a CPA right away because I didn’t want to miss any deductions on the personal or business side-and in the (admittedly) unlikely event I get audited, I want a tax professional on my side that is already familiar with my situation. The price is it worth it to me.

It also helped me treat the business like a business.

@Steve K. You bring up a great point, but can one be an active trader at the same income one gets as an active agent? @Russell Brazil would go from an activity he’s excelling at to one he needs to learn and move up the learning curve at.

I’m not saying there is a right or wrong, but the immediate drop in income needs to be factored into the decision.

I’ve tried day trading and sold options in the past-I found the experience more harrowing than the toughest tenant/landlord conversations I’ve had-with substantially less funds invested than the down payments on rentals.

For me, I’m happy you’re getting great results in the market (a bit envious too :) lol) but see myself on the RE path and wouldn’t dream of engaging in the market as a trader until the RE has bought my financial freedom and I need a new mental challenge. You have a Great comment, thanks for posting!

@Harry Standafer Maybe you could install a natural gas heater in a common area? That introduces its own risks/responsibilities/liabilities as tenants would need to start/stop it.

Otherwise I don't have much of a recommendation for you: I have a triplex-originally a SFH but converted-it has a central heating system. I had the same problem and used a digital thermostat to keep a consistent temperature (we believe teenage tenant was changing thermostat rather than shutting windows/doors etc)

The cost to run a new heating/cooling system probably is more than a few years worth of Cashflow.

It doesn't sound like you're looking to rent out SFH style-to one tenant/group, to where the rooms aren't split and they would then be solely responsible for electric consumption. It's another option, once leases are up, if this situation ends up being so stressful/expensive you don't want to go through another winter this way. Good luck!

@Matthew Grisafe right before COVID, I was working with my local bank to do a cash-out Refi so I could free the funds for a triplex I had on contract, and they offered to cross-collateralize the equity I was trying to cash-out.

The net result was 0% of my cash down. Whether that meets the criteria of your question is an open point-I committed equity equivalent to a 25% down payment.

@Bobby Romadka this question has been debated tirelessly on these forums: there is more consensus on whether the chicken came before the egg.

All kidding aside, I have heard, and recommend, to outsource management while you scale, then consider “vertically integrating” (making your own pm company) once you’re done growing.

There are countless mistakes a professional, properly vetted management company won’t make that a newbie might.

I think @Nathan G said it best recently: “managing rentals is easy.....until it isn’t”.

Full disclosure, I self managed a duplex for about 15 months, then we acquired a 4 plex and outsourced to a PM company and never looked back. Good luck!

@Katie Greenman @Allen S. Is correct-you can pull out your Roth IRA contributions tax free.

I did that in the past, however, at current valuations my fear is that the market has way more to lose than it does to gain.

Your savings for a down payment in the short term could potentially suffer. Just make sure you know what you want, when you want it, and the risk associated with both short and long term time horizons.

Good luck!

@Felix Stone for me, trying to get a business line of credit is what helped. I had to find a local credit union/bank to break in to the commercial space.

At the time, To get the LOC we had to refinance a duplex in our personal name to the LLC, so the house could be held as collateral. During this process, we independently we found an off market 4 Plex deal, which we also got a commercial loan from the same lender.

25% of that recently opened LOC was used for the down payment, on the 4-plex.

6 months later, the equity in the 4 plex was used to cross collateralize a new purchase- a no money down Triplex.

Knowing a local lender has been great for me, and I recommend you find a local, commercial lender if you don’t have one.

Great post!

@Jamie Fankhauser

Richest man in Babylon-I found this at 28, I WISH I found it at 18 years of age

Set for Life (yes, the Scott Trench book)

401(K)Aos by Andy Tanner

Rich Dad Poor Dad

How to Win Friends and Influence People

@Dalton O'Rourke the right answer is the one you choose :)

All kidding aside, newer investors, stereotypically, are I’ll prepared dealing with professional tenants, and are not forceful enough with the provisions of the lease, which can haunt them in the long run.

I rely on a PM, and recommend the same. Good luck!