All Forum Posts by: Paul Doty

It looks like this is the place to talk about Kalamazoo!

What's the contractor situation like? In my area, they're so busy that one in 20 will return a phone call. I'm looking for a GC to rehab rental properties. Does anyone out there have someone they can recommend?

 Sounds like a situation worth figuring out. You mention getting your credit fixed: have you discussed your current credit situation with a mortgage loan officer? I don't know any of your details, but I'm often surprised at what may and may not factor into things. I like to work with an MLO vs. individual banks because they're on your side and will find the lender who will understand your situation. If you've already gone down that road, I apologize for over-explaining. It's just what comes to mind first.

Now onto the property. If you can BRRRR a property with your current financial situation, I say go for it. I would think that having a cashflowing property with little (or hopefully zero) capital tied up would only help with fixing your credit (via extra cashflow to pay off debts) and get you in a better position for the next move.

Hi Collin,
I've had my eye on Kalamazoo for a while. Still figuring out what to do too. What are your goals?
I'm interested in buying rental properties with decent cashflow.

The house you live in now, would it make sense as a rental? Could you have positive cashflow with minimal equity left in? I ask, because where I live, to have positive monthly cashflow requires $200K of equity to be left behind. Who has that kind of money? Haha

Economists have predicted ten of the last five recessions. 

I'm putting my chips on May of 2020 for things to really start cooling off.
The first sign will be the rising cost of money.

Hi @Bernie Tobin,
I know this is an old post, but I'm interested to hear how things went. Did the normal LLC work for what you were doing? If you could go back and do things over, what would you change?

...and of course, how are your investments doing?

I agree with Erin's stance on savings vs. reserves. Having cash on hand in case life goes sideways is important, and that aggressive investing is what really gets you ahead. I'm often torn between the two. I'd like to have a lot more in reserves, but don't want to spend 3-4 years on the sidelines while I get there.

 My goal is to invest in deals where I get my cash back as quickly as possible. I also want to only buy deals with consistent positive cash flow. This way they will be able to sustain themselves in the event of me being unemployed or some other interruption of income. The idea is to get the money back into cash reserves as quickly as possible to minimize risk.

Truth be told, I know the number I should have in an emergency fund. I work towards building that, but have yet to get there or even close. Perhaps I should make this a goal for 2020.

May I ask how much you had set aside to begin with? What were the unexpected repairs you faced and how much were they? How many units in total is this property? 

I've been talking to people who suggest $10-$20K per $100K in property value. This seems excessive and unattainable. $3K per door should be easier to reach. I imagine the age of the property, general condition and repair history, the market and tenant class could all play into this calculation.

Hi @Dimitri Paspalaris, I'm interested to hear what you did and how things are going. I'm working on my own plan for cash reserves and looking for input. On one hand, I'd like to be prepared for anything comes my way. On the other hand, I don't want to spend the next four years saving and prepping for a 'worst-case scenario' which may never happen.

Was $10K as initial reserves enough? What curveballs and unexpected events happened and how did you deal with them?

That's an interesting situation. I don't have any worthy insights, but I'm interested to see where this thread goes. Posting this comment so I can track it easily. Best of luck.

I have not. I have been on the receiving end of a home warranty in lieu of credit though. In hindsight, I believe I'd get more value by watching a small pile of money burn. Perhaps a gift basket of fireworks and fine cheeses instead?