All Forum Posts by: Justin S.

I'm in a pinch right now because a person I made an offer to almost two months just called up and said I was right so now I've got three closings going on. A lot of times I like to make offers before people list with realtors. If I get word of someone trying to sell on their own, I'll sit down, say what I believe their house is worth, then tell them what they'll probably list it with a realtor for, then explain they'll have to negotiate, then pay a 7% realtor commission, all while dealing with getting the home ready to show. People don't like paying realtors, and they like to feel like you're offering them a hassle free solution. People are willing to pay realtors in order to make their headaches go away, why not pay us the same or more for making it even easier than using a realtor!

Well done! You're a beast!

Credit history is not as big of a deal as long as you're bringing some cash to the table. The first couple properties, I was required to bring quite a bit to the table, now I can buy them with little to no money out of pocket. I'm 28, and have 9 properties.

Thanks for the reply Bill Gulley. Obviously the goal is retirement, but retirement is easy if you have a great monthly income, management company handling the tenants/repairs, and a large amount of equity in the properties that you could sell if you need cash.

I am young. I am 28, and am attempting to create a lifetime of income. Yes, flipping makes you "faster" money, but if you buy, flip, and rent, the value of the property should grow, all while paying down the mortgage, and therefore, the same investment would give you a larger return on the investment. Obviously there's a ton of factors that play into this.

I have a couple of properties that are paid off, and are generating between 9 and 11% cash on cash ROI including management fees and a healthy repair budget. This is better than I could get almost anywhere in a normal type of investment. We all know the best ROIs come from leveraged money, but obviously makes it more risky as well.

I definitely agree that an entire book could be written on this subject alone. There's a LOT of different angles.

Hey BP. I currently own about 10 rentals, and am actively purchasing more. The goal is to get to a steady cash flow that pays all of my monthly bills and then some, and then benefit in the long term from mortgage pay down and rent increases. All of my loans are 5 year arms at decent rates, but I'm trying to decide what the best plan of action is long term. In the next five years, I'd like to start primarily living off of the cash flow of the properties, but my question is in regards to what the best way to benefit from the mortgage pay down is. I've heard of a number of people refinancing all the properties every five years, pulling out money, and using that money for major repairs, personal spending, etc. I've also heard of people taking the lower balances, and refinancing that over a longer period in order to lower mortgage payments and create higher cash flow. I've also considered refinancing them, pulling out the money, and buying a couple more properties with cash (paid off) to increase cash flow. My mortgage pay down is quite substantial, but as I grow older, I am certain my monthly expenses will continue to rise. I have not been in the business long enough to get to see steady rent increases, and given the slow recovery, believe it could be a long time before I really see these kinds of benefits. I'd love to hear from people who are using a buy and hold, or flip and hold strategy. How are you structuring your business to create a lifetime of wealth?

I do have one family member that does a lot of work on the properties, but we laid out a very clear $/hour and way to track it from day one, and I make sure to be careful about discussing profits with him.

I've had many friends, and family members ask to rent properties from me. I use a management company, so I just tell those closest to me that I signed an agreement with the management company and I have no control over who can rent the properties, or what they rent for.

Derek Johnson, I have really enjoyed the property managers. I interviewed a number of different ones, and went with the one I felt most comfortable. It definitely hurts the bottom line, but as long as you purchase the house at a good price, you can work in the property management fee into the figures. I have tried to stay away from student housing, because it can be seasonal, and the tenants can cause a little bit more damage, but you do get higher rents. If I was only doing one or two properties, I think I'd manage them myself, but given that I'm up to 14 tenants, it's much easier to pay someone to manage them. I even go do work at the properties sometimes, and just tell tenants I'm the maintenance guy.

Thanks Gary Clark. I wouldn't say things are going perfect, as I'm sure most people can agree with, there's always some kind of issue going on. Repairs, tenant issues, a vacancy, etc. All I can do is stay the course, and hopefully by continuing to build the portfolio, the law of averages will help bring more consistency.

Of all the things I've found when cleaning out properties I've purchased, I'm most proud of my battle axe!