All Forum Posts by: Ronald Morris

Hello everyone,

I have some great news finally. It looks like our adoption will be done in a few months meaning I can finally move forward with a few properties. I just wanted to run a few ideas and my current strategy by anyone reading this. I’m estimating the net cashflow goals with the assumption I’ll be refinancing to lower interest rates and that my goals will be met by the end of its time frame meaning 15k/mo at the end of 10 years.

Ill also mention here I’m starting with 100k and may put in more as things progress.

Knowledge: I've been researching/learning about 8 months or so. Most of my learning has been done on BP forums, BP books, BP podcast's, local REI meetups, analyzing properties and getting a job as a property manager.

Goals:

long term (10 year): 40 doors mostly MF 15k/mo net.

medium term (3-5years): 15-20 doors SFR/MF 3k-4k/mo net

short term (1-2 years): 2 SFR 2 Mf 800-1k.mo net and to work hard on finding the right people/working out as many bugs as possible.

Strategy:

I will be investing out of state as I live in southern California and my money ca go further elsewhere. My main concern is cashflow though I plan on BRRRRing most properties. My first two years actually buying I would like to buy two SFR then in year 2 buy two MF. Then in years 3-5 double that ideally to 4 units a year moving towards mostly MF. Going into years 5-10 I'd like to consolidate the SFR into an apartment depending on the markets I'm in. Also, between years 2 and 5 we will most likely be moving to Colorado when I have my computer science degree. There we will most likely move to a multifamily and take advantage of the 3.5% down FHA loan.

I am currently identifying markets to invest in but haven’t been sold on one yet. I am planning on partnering up on a few deals especially in the beginning but will most likely be at it solo for the majority of properties.

To me this is a fairly ambitious plan and I know it won’t happen perfectly or nicely at times, but I’ve always been able to go with the flow and adapt. I also realize how blessed and fortunate I am to have such a large sum to start with and can put in more. I also realize I could probably scale significantly faster with that much capital, but this is just a starting strategy till I get my feet wet and jump in. If anyone has any thoughts or suggestions by all means, ask me questions or challenge my though process it only help me clarify my ideas.

Thanks for taking the time to read my post if you'd like to message me privately feel free to!

Hey @Ishan Puri

I would recommend reading @David Greene's book on out of state investing. It offers a lot of clarity and has been a great resource for me. @Brandon Turner's book on real estate investing will help you build the foundation of your portfolio. This is a great start and they’re both on audible if you want to get a commuter's education.

There is also the free "Ultimate Beginners Guide" that is a very abridge version of both those books. Next, I would recommend learning the vocabulary by lurking the forums and asking questions. Most people here are super nice and don’t mind answering questions.

Don’t ask questions you might

Not want the answers to lol

Hey Jason,

What types of property are you looking for? I just looked at two properties and one looks like the 1% rule fits and the other is pretty close the properties are between 90k and 150k. 

One way to look at it is this.

25% of $138,000 = 32,500 (your DP) 

32,500/70(CF)= 464 months it will take to make a profit

464/12 months or one year = 39.5 years before you make a profit on your initial investment.

I understand this math is a little wonky and your loan is probably only 30 years but i think this illustrates the point.

Im assuming theres no value add component or a way for you to house hack?

Hey Troy, as @Jeff Stephens said wealth is built with long term investments. If you need starting cash why not give wholesaling a shot till you’ve got enough to get a rental. If you become good at both they’ll complement each other well and you’ll have more "tools" at your disposal.

As for getting more base knowledge BP has the free 'Ultimate beginners guide' that walks you through many aspects of REI. While going over that start listening to the back log of BP podcasts and @Brandon Turner's weekly webinar. If you want to continue with buy and hold (rentals) Brandon also has a great book "The book on rental property investing". This book really helped me solidify my goals and helped me develop a strategy.

Hey Lee,

Read and research till you feel comfortable enough to answer questions here on the forums. BP also has the ‘Ultimate beginners guide’ that really helps see different aspects of real estate. You can also jump on audible and get 1 free book just for signing up. My first book was @Brandon Turner's book on rental property investing. He covers a lot in it and helped me realize what my goals are. Last Brandon has webinars weekly and a bunch of podcasts to listen to. Like I said read and research! if you ever have any questions feel free to reach out and I’ll try to answer them.

Free REI meetup in Camarillo! This is not a sponsored event just a networking opportunity for anyone who would like to stop by.

Everyone is welcome whether you're brand new or a veteran we would love to hear from you. 

Feel free to sign up to the meetup group for more info.

Ideally the renter would pay it off while you get a few bucks extra, but wouldn’t paying down the mortgage give you more equity to work with in the future?

Hey Jorge, when it comes to debt, I’ve always gone with pay more and pay early. @David Greene mentions in his book 'Long Distance Real Estate Investing' that paying half the mortgage every two weeks works out to an extra payment every year. He also mentions every dollar spent on interest is a dollar wasted. Just 1 extra payment per year cuts the amount of payments down significantly and a considerable amount of money is saved. That along with simply rounding up to the nearest hundred could save tens of thousands in the long run.

I believe it’s called loan amortization. Basically, you have interest or how much the lender is charging you to borrow money and principal how much your being charged interest on or the loan amount. When you’re paying off the mortgage anything extra goes towards the principal lowering your overall interest.

I hope that makes sense if not I’m sure someone will correct me or you’re welcome to shoot me a message to clarify.