All Forum Posts by: Nick Elder

It might be best for you to handle the appliances. That’s how it typically is. whatever that maintenance cost is can be deductible on taxes to further offset rental income. Additionally, it might be in your best interest to purchase a washing machine and dryer for them. This is again a deduction and I believe you can also depreciate appliances in rental properties once they’re placed. They have a 5 year depreciation schedule. I try to think of tenants as my customers. At the end of the day, they are your customers. Keep them happy and maintain a good relationship with them and they’ll stay. That’s my two cents…

I think it’s unlikely there will be a crash anytime soon. People see the inflated homes prices and assume it’s going to be a repeat of ‘08. If interest rates go up, I think we’ll certainly see the market return to a state of equilibrium, but, not a crash. In which case, rather than the 20%+ appreciation we’re seeing in some markets such as Denver, we’ll see appreciation around 5-6%. I think the banks learned their lesson from ‘08 (at least I’m hopeful they did).

@Chris Levarek Thanks for your insight, Chris. That’s helpful and definitely gives me some additional things to think about

@Scott Wolf Thanks, Scott. I may be over complicating things. Agreed on your insight regarding the use of social media, but I can definitely see how that’s an important long term play for raising funds.

Hey Everyone,

I'm hoping to get some insight from those who are experienced and have been able to successfully fund their deals through private money from wealthy individuals. My partners and I know some wealthier people who have expressed interest in investing tand putting up their capital as a loan to us to buy a few STR in the Florida market that we are looking to close on soon. For those who have done this, I'd love to get your insight on what you've put together and what types of financial metrics you've presented to these people in preparation for securing their funding. Any advice and insight would be super helpful!! I've done several google searches and thought posting here would get us some results, as well.

Thank you so much

Nick

@Dave Foster very well said Dave

Makes sense to throw money into the 401k up to the employer match and no more. If your company wants to give you free money, absolutely take it. Hypothetically, if you switch To another company and roll that 401k into a traditional IRA, you can withdraw up to $10k for a first time home purchase without paying penalty (but still need to pay taxes). There's more flexibility with a 401k than I think people realize. You can also essentially act as your own lender and borrow out of your 401k and then pay yourself back the principal plus interest, however you lose out on any growth during that process. Certainly are pros and cons. I can tell you though, when I graduated and had access to a 401k, I was certainly happy I contributed as much as I did. It helped me buy my first house hack.

Good luck!

Congratulations, Jaston!

You'll realize this soon, if you haven't already. House hacking is one of the best ways to get started in RE investing. I've been house hacking a SFH in Denver for 1.5 years and moving on to my second house hack in a few months. Once you start feeling the momentum, it's hard to stop.

Good luck!

@Gervon Thompson

Hey Gervon,

My situation is near identical to yours. I took the route two years ago to start investing in real estate here in Denver while continuing to make the monthly payment on my student loans which is just shy of what you pay per month. At this point in time, I have the option to pay off the outstanding balance of my student loans with the money I’ve saved up in the last year, but chose again to proceed with a second house hack. I can tell you in my personal experience, I’m glad I did not choose to pay off my student loans first.

I think the question becomes.. if you paid off that $34,000 with the money you have saved up, how many more years will it take for you to save that money again to use as a downpayment? Hypothetically say it takes 3 years. That’s 3 more years of appreciation, debt pay down, and cash flow you’d be missing out on. Additionally, after those 3 years, home values likely would have increased even more than they are now, leaving you with even more money that you’ll need to come up with. If you used that as a downpayment now, then you could eliminate your largest expense (housing) altogether and then focus on paying down your student loans while building wealth at the same time.

Not sure what part of NY you’re looking to buy in, but in Denver, I’m finding that the time is now. The sooner I can buy and acquire the better.

Good luck to you!

Welcome to BP, Luke! I was in the same boat as you almost 2 years ago when I started my real estate journey. To echo, Jeff, house hacking is one of the best things you can do in the Denver metro market if you're starting out. Lowered my rent from $1,500 a month to $0 which completely changed my financial situation. Saved 50% of my annual salary and took most of that saved money and put a downpayment on another house which I'll be house hacking, as well. By house hacking, you really get a feel for the power and benefit of capitalizing on leverage in real estate. Lots of people on this forum with a breadth of knowledge. Good luck!