All Forum Posts by: James Park

Bryan I agree. My three diversification areas are real estate, ecommerce, and currency hedge fund. I try divide my cash equally in these three sectors.

Do any you plan by what age you want to achieve a certain networth? $10 million networth and $20k/month income seemed to be the most common answer here. You guys plan to get there purely with real estate or other small businesses? It takes a 26% return for your money to double every 3 years.

When you reach this goal where do you plan to live and what do you plan to do? Charity, missions, donations... ?

For those of you who are already millionaires, at what age did you reach your first million networth with real estate?

Bryan,

That is a really nice proforma for small apartments. Do you know where i can find a pro forma like that for managing multiple single family homes? I am starting to put a business plan together for my SFR investment strategy for the next 8 years.

Is my RE investment plan for the next 8 years still a sound strategy? I know getting 90% financing for rentals 5-7 years wasn't very difficult with easy credit, but now the game is very different.

Albert, if you don't mind me asking. What type of rates were you able to get on your 8 loans and are they are all 30 year fixed conventional loans? In order to implement the plan you have i will need to invest $450,000 in equity and try to get conventional loan of up to $1,550,000 over the next 8 years.

Nathan, thanks for your post. I never thought about the option of the 15% note from the seller. This information is very helpful.

Nathan,
I'm sorry.. I also welcome advice from mult-family investors who own serveral mult-family units.

Nathan,
SFRs are just what i am comfortable with. It is the land that goes up in value not the house. I believe there is more appreciation potential on an SFR over the next 8-10 than multi-family. However, cash flow is probably much better on an multi-family. Also with muti-family units you are most likely dealing with a savvy investor like yourself whereas in SFRs you are probably dealing with non-investor sellers.

I think that SFR, generally speaking are easier to manage on your own with a full time job.

Right now i just have two investment properties that i bought before 2006, and haven't purchased any new investment properties except for my new primary residence I purchased last here.

My investment goal is to purchase one SFR rental every year for the next 8 years so that the income generated from my 10 SFRs would replace my annual salary by 2020. I was told by my mortgage broker that i can probably borrow for 2 more rental homes with conventional loans but will be required to put down 25%. In today's tight lending environment, is there any creative ways I can still finance with 10% down or are those days long gone and impossible to do? How do you go about getting financing for your 6th - 10th SFR rentals?

My idealistic 8 year business plan assumes that i can purchase a $250,000 SFR at a purchase price at a 10% discount of $225,000 with 80 - 90% leverage every year. For those of you investors who specialize in investing in SFRs and have loan balances between $1 million to $3 million. What strategies did you pursue to get to this level of financing? How difficult is it in today's environment to get a loan more than $1,000,000 for 3-4 SFR investments?

Thanks

Adam,

Good for you starting your own internet retail business right out of college. I started my internet retail business in 2005 and can relate.

I moved my business from Chicago to Atlanta 7 months ago due to a better business environment and to invest in SFRs locally. The Cook County property taxes rose so much in the past 5 years, it just doesn't make sense for me to own any real estate there.

I would advise to invest in your backyard if you can. I had a set back with one of my properties in Chicago with bad tenants, but now it is under control with new tenants coming in on Feb 1st, 2012. I learned a valuable lesson that i will only invest within a 30 - 45 drive radius. I would say that Atlanta, Houston, and Dallas are all good emerging markets to invest. If possible, while you are small and portable, it may not be a bad idea to move your internet retail business to one of those locations and invest locally, where the future is bright for building a portfolio of SFRs.

Bryan,

Can you explain what you mean by 10-20% of your long-term debt in cash and 2.5 D/E. Do you mean if your mortgage debt on all of your RE investments total $1,000,000 that you will only hold between $100,000 - $200,000 in cash?
Does D/E stand for Debt to Equity of 2.5?

What would you say are some good
benchmark ratios when are an investor in your 30s, 40s, or 50s?

Jon,

Do not underestimate your backyard with 7% appreciation a year. :)

Did you know the fastest growest metro city from 2000 - 2010 was Dallas with a population growth of 1,231,393? Houston came in second at 1,210,229. Los Angeles metro including Orange county only grew by 463,210. There are only 3 metro cities that can boast of a population growth of over a million from 2000 - 2010 and Texas has 2 of them.

I really do think we will see 7% year appreciation in desirable areas like Plano, TX.