All Forum Posts by: Ryan Cheek

Hey, great to see you're helping your friend get started with real estate! I’d say a fantastic episode for her to check out would be Episode 381: “How a 22-Year-Old Newbie Bought 8 Properties in 2 Years With Just $20k.” It’s super relatable, especially since your friend is around the same age and also just getting started.

Also, as someone who works closely with newer investors, especially those with busy careers like your friend, I’d love to share some insight on how she can diversify her income while keeping it relatively hands-off. I’ve been helping investors, many of whom are new to real estate, get into cash-flowing new construction duplexes in Indianapolis. These types of properties can provide strong rental returns without a massive upfront investment or needing tons of experience.

If she’s curious to learn more or wants to explore some easy first steps, feel free to connect! Would be happy to share more resources and ideas to help her on her real estate journey.

Wow, what a tough situation! It’s always tricky navigating tenant disputes, especially when things get personal like this. It sounds like you’re doing the right thing by preparing for the possibility of eviction if the rent doesn’t show up on time. Hopefully, the protective order will help resolve things more smoothly.

Speaking of Indianapolis, I’ve been working with investors in the area on new construction duplexes that are designed to minimize tenant issues by attracting stable, long-term renters. One of the benefits of new builds is that they tend to attract tenants who are looking for a fresh start and a place to settle down, which can help reduce the kind of headaches you’re dealing with now.

If you’re ever considering expanding your portfolio or want to explore other opportunities in Indy, feel free to reach out. I’d be happy to share more about what I’m working on and how these properties could potentially bring in reliable, hassle-free tenants.

**"Hey there! It sounds like you’ve got a solid foundation with your duplex in Lehigh Valley, and it’s great to see you’re thinking long-term about your portfolio. High property taxes in NJ can definitely make cash flow a challenge, especially if you’re trying to avoid over-leveraging.

Given your goals, one strategy you might consider is diversifying into markets with lower entry costs and strong rental demand. I’ve been working with investors who are looking for just that, and one area that’s really stood out is Indianapolis. The city has a growing population, reasonable property taxes, and offers solid cash flow opportunities—especially with new construction duplexes.

These are off-market deals that are designed to attract long-term tenants, and they offer a balance of immediate cash flow and long-term appreciation potential. With your remote work flexibility and strong income, investing in a market like Indianapolis could help you expand your portfolio more sustainably without needing to save up a massive down payment for each new property.

If that sounds interesting, feel free to shoot me a message—I’d be happy to share more about what I’m working on in Indy and see if it might be a good fit for your goals."**

Hi Noah,

Great question! One of the main downsides of using a HELOC is that it typically comes with a variable interest rate, which means your payments could increase over time if interest rates rise. This could impact your cash flow, especially if your rental income margins are already tight.

Another thing to consider is that a HELOC often has an interest-only payment period for the first 5-10 years. After that, you'll need to start repaying both principal and interest, which could also affect your cash flow.

However, the flexibility of a HELOC can be beneficial, especially if you plan to make strategic investments that generate higher returns in the short term. It allows you to access funds as needed without the immediate commitment of a large lump sum, like with a cash-out refinance.

Given your focus on maintaining positive cash flow, carefully evaluating the terms of any HELOC offer is essential. You might also want to have a contingency plan for managing rate increases or fluctuations in your rental income.

If you'd like to discuss this further or explore other options that might fit your strategy better, feel free to reach out. I'm happy to help you navigate these decisions.

Best,
Ryan Cheek

Hi there,

It sounds like you've built an incredibly diverse and successful portfolio, balancing multiple streams of income and managing your own rentals, which is no small feat. Given your background, especially with your general contractor's license and hands-on experience with rehabs, transitioning more into real estate seems like a natural progression.

Here are a few thoughts:

1. Potential of Real Estate vs. IT Business:
   • With $250k in cash savings and significant untapped equity in your rentals, you’re in a strong position to leverage your existing real estate knowledge to grow your portfolio further.
   • The real estate market, particularly with your ability to do your own rehabs, might provide you with more immediate and scalable opportunities for wealth building, especially if you can find properties that need work and force appreciation through value-add strategies.
2. Balancing Both:
   • You don’t necessarily have to give up the IT business entirely. If it’s possible to scale back your involvement or bring in a partner/employee to manage the day-to-day, you could still benefit from the income while focusing more on real estate.
3. Cash Flow vs. Capital Gains:
   • If your current rentals are cash-flowing and covering your mortgage, adding more properties that you can rehab and rent out or sell could significantly boost both your cash flow and equity positions.
   • The decision might come down to whether you’re more interested in building long-term wealth through real estate or continuing to grow the IT business. Real estate offers tangible assets that can appreciate and cash flow, but your IT business could also have growth potential, especially if you find the right help.
4. Considering a Hybrid Approach:
   • Since you’ve got strong systems in place for your online store and rentals, perhaps a hybrid approach might work—slowly transitioning more time into real estate while maintaining a steady presence in your IT business. You could test the waters with one or two rehabs, see how they perform, and then decide if a full transition makes sense.
5. Leverage Your Skills:
   • With your contracting experience, you can save significantly on rehab costs and add value quickly, which might give you a better return on investment compared to the time and effort spent growing the IT business further.

Final Thoughts:

Ultimately, it might come down to where your passion lies. If real estate excites you and you see more potential for growth and flexibility there, it might be worth exploring further. However, if the IT business still holds potential and you can find the right help, balancing both could provide you with diversified income streams and security.

If you ever want to discuss more about scaling in real estate, particularly with multi-family or new construction opportunities, I’d be happy to connect. I specialize in helping investors grow their portfolios strategically, and your skill set would be a great asset in this space.

Best of luck with whichever path you choose!

Ryan Cheek

Hey there!

It sounds like you’re in a solid starting position with your first rental and a clear vision of where you want to go. Based on what you've shared, I can definitely relate to your goals, as I specialize in helping investors like you scale their portfolios with strategically selected properties.

Financing & Expansion Options:

Given your current financials, here are a few paths you could consider:

1. HELOC or Cash-Out Refinance: Tapping into the equity of your current property could give you the liquidity needed to acquire more rentals. A HELOC might offer more flexibility if you're planning to purchase multiple properties over time, while a cash-out refinance could provide a lump sum that you can deploy immediately.
2. 1031 Exchange: If you decide to sell your Corpus Christi property, you might explore a 1031 exchange to defer capital gains taxes. This could allow you to reinvest the proceeds directly into one or more properties in Houston, which seems to align with your goal of expanding locally.
3. Leverage New Construction Opportunities: I work with Neu Real Estate Group in Indianapolis, where we focus on high-quality duplex builds that are designed with strong rental returns in mind. These kinds of properties can be a great way to balance cash flow with long-term appreciation, especially if you're looking to diversify your portfolio geographically. Even if you’re focused on Houston, the same principles apply—finding areas with promising growth and strong rental demand.

Strategic Growth:

Since you’re considering building up to 10 properties in the next decade, you might want to look at markets that offer both affordability and growth potential. In your case, staying in Houston or exploring surrounding areas could be smart moves, but don't overlook other regions where new construction might be booming.

Consider a Mix of Strategies:

While your primary strategy is buy and hold, it could be worth looking into markets or property types that might give you better cash flow opportunities. For example, a mix of long-term rentals and perhaps a few duplexes or small multi-family properties could help stabilize and grow your cash flow while you build equity.

Selling Your Corpus Christi Property:

With a low interest rate like 3.375%, selling might not be the best move unless the equity can significantly jumpstart your portfolio in Houston. If the Corpus Christi market is still appreciating, holding onto it while acquiring new properties might provide you with a balanced mix of appreciation and cash flow.

Final Thoughts:

If you're interested in learning more about how to strategically grow your portfolio, especially with new builds, I’d be happy to connect and discuss further. I’ve been working with other investors to help them navigate similar challenges, and I believe there are some great opportunities out there for someone with your goals.

Feel free to reach out if you’d like to dive deeper into any of these ideas.

Best of luck on your journey!

Ryan Cheek

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Hi Jorge,

It sounds like you're at an exciting stage in your investment journey! Given your strategy of long-term appreciation with breakeven cash flow, here's my take:

Both options have their merits. The townhome from the 70s, with some rehab, could offer immediate equity if you can purchase and renovate it at a lower cost compared to the new development. Plus, older properties in established neighborhoods often have more stable appreciation over time.

On the other hand, the new development, though slightly more expensive, might offer modern amenities, energy efficiency, and potentially lower maintenance costs. If the area is up-and-coming, it could appreciate well, especially as more development occurs.

Ultimately, it depends on your risk tolerance and how hands-on you want to be. If you’re comfortable managing a rehab and want to build equity quickly, the older townhome might be a better fit. If you prefer something with less immediate work and are willing to pay a premium for a newer property, the new development could be the way to go.

Good luck with your decision! Both paths have great potential.

Best,
Ryan

Hi Dozar,

Great question! You can typically have one FHA loan at a time, as it's intended for primary residences. However, with a 5% down conventional loan, there isn't a strict limit on the number of properties you can acquire, as long as you meet the lender's criteria.

One strategy I've seen work well is using the FHA loan to buy your first multi-unit property, live in one unit, and rent out the others. After a year, you can move out, convert it to a rental property, and then use a conventional loan with a low down payment to purchase another multi-unit property as your new primary residence. This way, you can continue scaling your portfolio, leveraging the benefits of owner-occupied financing while building equity in each property.

It's a great way to grow your portfolio while taking advantage of favorable loan terms typically reserved for primary residences. Just make sure to stay in touch with your lender to ensure you're meeting all requirements and exploring the best options for your situation.

Happy investing!

Ryan Cheek

Hey there!

I'm with you on the buy-and-hold long-term rentals! There's something solid and reassuring about investing in properties that can provide steady income over time, even if they don't look like the biggest moneymakers on paper.

In my real estate career, I've explored various avenues, from fix-and-flips to working with multi-family units and even considering out-of-state investments. Currently, I'm focused on selling new construction duplexes in downtown Indianapolis, which offer great potential for long-term investment.

While I'm still relatively new to the industry, I've found that consistency and reliability often trump the allure of high-risk, high-reward strategies. Long-term holds may seem "boring" to some, but they provide a dependable way to build equity and generate passive income over time. Plus, you get the added benefit of appreciating property values in promising areas.

It's always great to connect with fellow investors who appreciate the value of tried-and-true methods. Looking forward to exchanging more ideas and strategies here!

Best,
Ryan