All Forum Posts by: Nick Harris

Awesome job Rajm and thank you for sharing! Very excited for your continued success

Nicely done Raj! I knew this was going to be a good deal from the start and you guys made it a great one!

Quote from @Jeremy Browe:

Hello Everyone! Real estate newbie investor reporting in. I have been doing a ton of research on real estate investing outside of this website (books and podcasts mainly) and I'm ready to start to hit the ground running into finding my first property. 

My question to all of you is in relation to financing.  Right now, both me and my wife are house hunting for our next primary residence (as we are starting to grow out of our current starter home) but I also want to start getting into investing into real estate and purchase my first property.  Is this doable?  Will our options in terms of what we qualify for in terms of a mortgage for our primary residence be hindered by me trying to purchase my first property or (more importantly) owning an investment property? Is it better to wait until we close on our new primary residence before I go and search for my first investment property? I hope this question makes sense. Any and all advice you can pass along would be great.  Just want to get started ASAP and I don't want to wait.

 The best way to knock both out in one transaction would be to househack. I am not sure if this is something you guys have talked about but that would be my first recommendation as you get both your primary residence and investment property in one transaction. 

Outside of that, I would make sure to check with your lender on your current DTI situation and whether you have room within that to take on two new mortgages. They will better be able to help with the numbers and tell you whether or not you are able to do both and what the steps are that you need to take

Quote from @Mark Schneider:

I’m looking for a real estate agent that can help me, an out of state investor, find decent multifamily properties in the Detroit area. Must have good contractor connections

Thank you

 I would be happy to help! Check FIRE Realty Team out on FB, BP and Google. We work with new investors, seasoned investors and both in and out of state clients all over the US and have all the resources and knowledge to help you! 

Quote from @Kevin Lee:

 My wife and I currently owns a single family home that can sell for 80% above the price we bought it for. It is getting old and I feel renting it would cost to much money to repair. I wanted to buy a quadruplex and rent out each unit. I’m not sure where to start as far as if I should sell this house, invest in the multi family home and live there or should I just invest in one, rent out all rooms and move in to a new house? I am new at investing in real estate and currently do not have any rental properties. I only own a single family house. 

You have multiple options in this situations and all of them have pros and cons. The two primary options would be 
1. refinance your current property, put a tenant in it and purchase your new primary single family residence
2. refinance your current property, put a tenant in it and purchase a 2-4 unit property you can househack
3. sell the current property, purchase a new SF primary residence and possibly another rental property 

Feel free to reach out to me as I am an investor agent specialist in the Metro Detroit market 

Congratulations Michael! This is awesome. It was a pleasure working with you to getting this deal closed with you. I am looking forward to workin with you and helping you grow your portfolio in the future! 

There are five key benefits to investing in real estate and I am sure you have seen this acronym before and this will be review but if not, I find this helpful for myself and I love sharing it with you.

I = Income 

D = Depreciation

E = Equity 

A = Appreciation 

L = Leverage

Income: 

Income In real estate, income is known as "Cash Flow". Income is one of the core benefits of investing in real estate. One of the great things about investing in real estate is that you receive monthly income from your properties. The bigger the margin of rent to expenses, the more income. The more doors/units, the more income.

Depreciation:

Depreciation is just one of the tax benefits that come from investing in real estate. Depreciation occurs because the US government requires investors to spread out their depreciation over the span of 27.5 years which creates an annual depreciation expense. Let's take a look at a scenario when depreciation is used and not used
Scenario #1 (No depreciation used)$20,000 taxable income x 24% federal income tax rate = $4,800 taxes owed Scenario #2 (Depreciation is used) $20,000 taxable rental income - $7,000 depreciation expense x 24% federal income tax rate = $3,120 taxes owed

Equity:

Equity If you use a mortgage to purchase your rental properties and your rent covers all expenses, your tenant is technically buying your property for you. This is essentially using OPM (Other People's Money) to build wealth over time.

Appreciation:

Appreciation Over time, real estate properties tend to appreciate, or go up in value, at about the same rate as inflation (3-4%). This type of appreciation is known as "passive appreciation". There is also "active appreciation", which can come from buying a property under market value or by forced appreciation or adding value to the property.

Leverage:

Leverage allows you to use debt to purchase a property that is 75-80% higher in value than the capital you put down to purchase the property. This means that on a $100,000 property, you can pay $20,000 to own that asset worth $100,000. As long as your tenants are paying down the rest of that payment and interest, you are utilizing leverage.


Nick