All Forum Posts by: Josh E.

@Jason Butts

As mentioned before, goals matter. You said you don’t work due to a disability, how much would that affect your ability to do the day to day tasks of real estate? And how much free time do you have to dedicate to doing those real estate related activities?

You could jump right in with 2 feet, which would probably be the most in depth and time consuming, and find the core 4 relationships to do everything remotely - I.e. realtor/deal finder, property manager, contractor, and lender. It does take time and energy to vet all those different people to find the right ones, but the opportunity could be greater if you'd like to build that up to a large income through the BRRRR strategy.

You could take the very easiest route and invest the 200,000 with an advisor, which could generate between 650 and 700/month, and have everything automated to where you never have to think about it again.

Or you could do many things in between - buy and hold a few properties with cash, look at holding notes, private lending, etc.

Ultimately it depends on your goals and how much effort you’re willing to put in for a greater rate of return.

@Keith Gilbert

Dave Ramsey isn’t for everyone, but he’s good at marketing, that’s for sure.

Seems like you’re on the right track. I have clients in Arizona and California, I’m happy to chat sometime if you’d like.

Hey Brian!

I’d agree with Bob, you can get a pretty good estimate just by dropping down the bedroom count to the specific unit, and then multiplying that by how many units are in the multi family property. You may have to adjust it slightly depending on the situation... a 3 bed 2 bath single family will probably rent for a little bit more than a 3 bed 2 bath side of a duplex, but it’s definitely close enough to run basic numbers and decide whether it’s worth investigating further.

Hope you can find a good property soon!

Seems like a 5 bed 2 bath with no garage and ac units to cool that much sq footage would be less desirable than most other 5 bed 2 bath that you are competing with. 380/month for utilities also might seem steep to some. I’d recommend lowering your rent and just stating “tenant responsible for all utilities” and see if that helps get any more interest.

Originally posted by @Aaron K.:

@Josh E. not trying to start a massive debate, just curious how we are supposed to figure out whether a commission based financial advisor is ethical or not.  At least with a fiduciary there is some legal protection.

That is a great question, one which doesn’t have only one correct answer. 

My first thought is a good financial advisor will listen to what your financial goals are and then give you ideas on how you can reach those goals. Then, if they can assist in some way, they can explain how.

If you are sitting in front of a financial advisor who hears your goals and then tries to convince you that they aren’t the right financial goals to have, and then recommends that you do something different, especially something that only he/she can help you with, that would be a red flag. 

Ethical probably wasn’t the best word choice either on my part. An FA could be completely 100% ethical and stand by what they recommend, and truly believe in what they recommend, yet not have experience in or access to other investment vehicles like real estate that could potentially be better for the client.  

I guess the point I was trying to make was that many times when people speak about a financial advisor, they talk in terms of absolutes. “Commission advisors are always bad.”  “Fee only advisors are always what you want.” “Make sure to pay by the hour to get the advice you need.” But in my opinion an advisor that has personal experience in real estate investing and gets paid on a commission basis could be leaps and bounds a better resource than a fee only advisor that has never had more real estate experience than buying or selling their own personal residence.

It’s a great question though and definitely worthy of a discussion.

Just because a financial advisor is commission based doesn’t mean that they won’t have your best interest at heart, won’t help you meet your financial goals around real estate, or won’t understand real estate.

If a financial advisor is fee based and charges on an hourly rate, it doesn’t mean that they will be able to give you the best advice either, especially when real estate is involved.

With financial advice, people tend to be more comfortable with what they understand. Doctors feel more comfortable with stocks of companies in the medical field. Oil and gas engineers feel comfortable investing in energy companies. A typical financial advisor understands the stock market. Real estate investors understand real estate.

If you want to have a diversified portfolio that includes both paper assets (stocks/bonds/mutual funds) and real estate, and you’d like advice on what that looks like, make sure you find a financial advisor that has personal experience with that. If they have integrity, they will steer you in the right direction regardless of how they get paid and can teach you a lot about things you didn’t know that you needed to know, aka tax planning, estate planning, insurance, lending, asset protection, etc. Just make sure you do understand how they get paid and that their advice is worth it to you, and you can have a great relationship that will be profitable for both of you.

@Mike M. I believe your argument is flawed, as you are comparing apples to oranges. You put in 17 hours of work for your 76,000 gain. That is fantastic by all accounts, but you are describing a job, not an investment. The gain would not happen without you working those 17 hours or your prior experience in putting together similar deals. Putting money into the stock market takes all of 30 seconds to do. The market goes up and down, but you are not spending any more time or effort to create the growth. Real estate is a powerful tool, and many times can work out to be more advantageous than the stock market. But saying you have to work 6 months to even enter the market is obviously not correct, as you can buy an etf or mutual fund that owns the entire market for as little as 100 bucks, and without fees no less. In summary, your job working 17 hours to get 76,000 is a fantastic job. But it still is a job that requires time, energy, effort, and experience. You are therefore compensated for the specific skills that you possess. An investment into the market is not a job, takes no time or energy, and requires no skill other than knowing to buy a correctly diversified mutual fund or etf. Comparing them in this manner doesn’t make sense.

@Bradley Russell I like your analysis, you’ve pretty much done everything you can do from the outside, and it seems to check out. Next step would either be to walk the property with a contractor or skIlled property manager to get an idea of what repairs will cost you, and make an offer if that fits what your goals are. Or, just put in an offer and figure that part out during due diligence. Good luck! Hope it works out for you.

Yeah thanks everyone!  Great turn out.

@Matt Hendrickson How much rehab will you need to do on your current properties? I bought my first property in April of 2015, and knew I was going to need to replace the carpet in one of the units and paint. That went from a 5,000 budgeted rehab to 15,000 pretty quickly when we decided to do the whole property with LVP so as to last longer. Other things came up as well that were more than expected. At first I thought I would be fine with cash reserves of 12,000 or so and could cash flow the rest. Unfortunately, 2 other propertIes just happened to turn over at the exact same time, needed some work, and we were left in a bind. Luckily my wife and I also have good Income, so we were ok. Moral of the story is that things tend to hit you all at the same time, and tend to be more expensive than you budget. Just make sure you could weather the storm if it happened to hit next month. If you have a good enough deal, maybe teaming up with a partner could help?