All Forum Posts by: Nick Elg

I was inspired today about WHY I want financial freedom.

"Whatever causes us to be dependent on someone else for decisions or resources we could provide for ourselves weakens us spiritually and retards our growth toward what the gospel plan intends us to be."

-Dallin H Oaks. "Repentance and Change", Ensign or liahona, Nov. 2003, 40

I will reach financial freedom or self reliance so I can continue to progress and become the person I can become!

I hope this encourages/uplifts you as it has me. 

Let's go get it!

@Nicholas Anderson

I would check out the book "Making big money in small apartments" by Lance Edwards. 

If you haven't used audible before, you can download the book for free at this link: http://a.co/5JlaM7p .

It helped me to really dial in what my goals are and come up with an actionable plan to get there. 

I think you are on the right track figuring out what works for you but it might adjust as you progress. Let me know if you have any more questions or if you need any more help. I am always available to bounce ideas off of. 

Best wishes, 

@Nick Murray

Awesome resource; thank you for sharing. Best wishes on your investing journey.

@Account Closed

I just got the BP 90 days of intention journal and they put you into mastermind groups. Should be very beneficial for having accountability partners and getting feedback on our goals and actions. 

You might consider doing the same? I am also available and willing to share my thoughts or feedback with you anytime. Just reach out. 

@Matthew Wright

Congrats and good luck!

I think the most important thing to get from the seller is trust... Kind of a funny answer but if you are able to build a relationship and get them talking about how they bought it and how they have felt owning it, then they will be more likely to tell you helpful information about the property and their situation.. i.e. that they got seller financing when they purchased(then you can ask them for it too), the property has never had the roof replaced, information about tenants, whether they have raised the rents in the past or not, etc. 

The P&L are important for valuing the property but trust is important for determining the value of the person which can give you more leverage in your negotiations. 

Then you would want to figure out what your local cap rate is in your market. Price/NOI=Cap rate and NOI/ Cap rate=price.

Good luck! I wish you the best! 

@Joshua D.

This is awesome. Great post. 

Have you bought each property from one continual BRRRR?

I just had a conversation with my uncle who is big time in the lending world and he had an interesting perspective I can share. He is very safe with his lending and leverage. 

Things he would recommend( I believe they are sound principles as well):

-Have 6 months of P&I payments in readily accessible capital

-Have $500,000 in cash ready within two years for the down turn

If you are close to having 6 months of reserve payments ready, I would consider doing the rental debt snowball strategy. That way you can pay off debt so you improve your debt to equity, increase your cash flow and or sell properties for capital so you are prepared for the down turn to pick up properties at distressed prices. 

Thanks for sharing! It is motivating to see what hard work can turn into.

Best wishes,

@Keith Manchester

Awesome, well you are doing the right things by analyzing deals and getting in the forums. 

Do you have audible? If you have never used audible, i can send you a free book to get you started. I would highly recommend "how to make big money in small apartments". If you haven't used audible before, send me your email and I'll send it to you for free. 

I recommend this book because the author gives solid advice on preparing yourself to act. He recommends starting at your end goal; plan what year you will retire and how much income you will retire with. Then work backwards so you know how many properties you need to buy each year and what actions you should take every week/day  so you reach your goal. 

I would also recommend studying up on the BRRRRR method. Search the forums on the topic and relisten to podcasts that talk about the BRRRR.

This strategy really is the only way to go for most people that want to accumulate a lot of property. If you buy a property and you cannot get your money back out, then your path to financial freedom will be halted. However, if you can put 66,000 in to the purchase and rehab of your property then refinance all of your money back out, then you can scale your accumulation of properties using the same money! 

This may well require you to invest out of state.. If that is the case, read @David Greene's "long distance real estate investing" it is a solid book on how to do it systematically, reducing risk, and how to make it passive!

Send me a message if you want to talk more. I'd be happy to help in any way I can. 

Kind regards,

@Marzieh Rostami

I am neither in Houston or done a SFR conversion.

I did want to recommend researching other conversations on BP . Here is the link to more conversations like the one you posted:

https://www.biggerpockets.com/search?utf8=✓&term=c...

Checking with your local city is important for requirements and regulations. Some properties cannot be zoned multifamily in a certain areas. 

Good luck! I hope you find the help you need. 

@Keith Manchester

Hi Keith, 

I checked out your analysis! Way to go on analyzing the deal! This is something I should do. 

I will share my thoughts with you in the form of questions(mostly). Don't feel like you need to answer any of the questions in response. I  just hope it helps you in some way to make your decision. My first thought is it really depends on your investment criteria and what you are trying to do

What are your longterm goals? Do you want lots of properties or only a few? Are you going for cash flow or for appreciation? How quick do you want to get to your goal? If you buy this property, will you be closer to your goals? 

If you put in $66,000 to buy the deal and rehab it, what will you be missing out on? Do you need the capital for anything else? Do you have enough reserves? 

Are you banking on appreciation? Are you fine with a 3.4 % return? 

OK. Now no more questions. Ha. That was a lot.

Personally I wouldn't buy the deal because the property doesn't align with MY goals. 

Buying it would freeze up too much of my capital so I couldn't progress like I would want. 

It makes me nervous that there wouldn't be any equity in the deal. 

It is a SFR and I want 5+ units so I have a little more control over value.

Anyways, with all of this being said. It really depends on what you want out of the deal and if it meets your criteria. This deal could be in LA in a great location and you could have a killer team that would make owning it super easy and it could appreciate like crazy. 

I hope it goes well for you !

P.S. Is there a reason your loan costs are so high? 

Hello @Stephen Ellis

Interesting situation but way to be creative to get some cash flow. How you act will depend a lot on where you want to go. I would first consider if you are truly cash flowing on the property or if your taxes, maintenance, management fees, and cap ex savings are going to push you into the red. 

If that is the case, then it might be best to try and sell and walk away with some of the equity in the home. If you had lived in the home for 2 of the last 5 years you could talk to a professional and they could help you pay no taxes which would be nice. Then you can look for value add properties where you could house hack, flip, live-in flip, etc. 

Another option would be renegotiating with your tenant to see if he wants to buy the property instead of just rent. You could seller finance to him and ask for a big down payment so you have some capital to invest somewhere else and then you can be confident that they will take better care of the property. 

Just depends on what you want to do and if you have some equity in the home. 

Good luck and keep us posted on how it goes! 

Kind regards,