All Forum Posts by: Ryan Howell

@Rhett Z Begley I use Tonsofrentals.com - Terri Vela.

A balance of both...Appreciation is where you build wealth AND what allowed me to quit my job - NOT cash flow.

Cash flow is your safety net.  It protects you if rents drop and yes gives some passive income, but if you want to truly build wealth, you want appreciation.  

My first units were all purchased in an appreciation market, not a cash flow market, but as you build wealth, appreciation shows up in your net worth on your balance sheet.  As they grow you can leverage those assets to continue buying and scaling and allow the compound effect to really work for you. If you only go after cash flow, you're missing out on the greatest benefits of real estate investing in my opinion.

My purchases were deals that were below market and were cash flow positive, but if I had bought better cash flowing deals in a market that didn't appreciate, I don't believe I would be as far along as I am today.  

Great information! I definitely think we do see overbidding, but I also would say that the cap rate doesn't show everything. Someone could buy at a below market cap rate, but see some large value add opportunity to boost NOI that the data doesn't capture.

Especially on the smaller multi-family, you are very dependent on the buyers situation.  In our area, non-investors will buy a duplex and house hack, just to afford to live here, driving up the prices beyond a traditional investor will pay, but it is still potentially a good investment for them.  Same could be said of a high income earner looking to diversify and buy something all cash, completely okay with a smaller unleveraged return.  Everyone values their investments differently.

You are the average of the 5 people you spend the most time with....Focus your time on finding people that are ahead of you and bring them value, even if that is working for free.  Read everything you can and continue educating and saving up.  You are on the right path - a house hack is a great way to start.  You are already ahead of everyone your age, great job!

I still think there are smart ways to get started...the smartest of which is a house hack followed by a live-in flip - you are still lower risk then the average home buyer.  

Anthony O'Brien at RealEstateLender.com - I'm looking to use him on my next deal.  He has some fixed rate options I don't see many other lenders offering.

That is an awesome opportunity to take advantage of, but also could be dangerous if you are not careful. I compare to the BRRRR strategy - If I am about to refinance and I know I can only get 75-80% LTV and I need my capital back for the next deal, the bank protects me from myself, forcing me to have equity in the deal when I'm done to get my money back.

With 100% LTV, you can easily get in trouble. I see two modes of "defense" in buying LTRs - cash flow and equity. cash flow keeps me safe if rents drop, equity keeps me safe if the market drops. I don't want to be upside down on either.

I would decide based on your risk tolerance how much equity you want to have and be firm on your criteria...otherwise, you can basically BRRRR without having to wait a seasoning period and really accelerate your investing!

That's crazy!  I'm sure that's painful, but I suspect that if that is their attitude that they probably aren't someone you would enjoy working for for any length of time anyway, so maybe a blessing in disguise?  Perhaps it will uncover some opportunity that you wouldn't have seen or done if you were still in the day job.  

I recently left an engineering job to be full time in real estate as an agent/investor.  There were basically two responses - those that understood and were even a bit jealous and those that thought I was absolutely nuts to leave such a stable "safe" career.  There are many that just don't understand why we do what we do.

@Dan Lapp - I'm a local investor doing the BRRRR strategy primarily and an agent in the Asheville area. Happy to connect and help however I can. Let me know if you have any questions. Also check out CREIA, our local investor group. You can meet a lot of seasoned investors in the area with a wealth of knowledge.

This will be highly dependent on the specifics of the property.  

What type of roof 12/12 pitch 4/12 gable, metal, shingles, etc?

Electric or gas hot water heater?

How big is the deck and driveway?

Driveway gravel, paved, concrete?

Happy to help with what I know if you want to send me a message.