All Forum Posts by: Ryan Ness

Quote from @Ryan Ness:

If you use a Property Manager, there's no need to develop policies and procedures. However, you should have a general understanding on how to manage rentals and tenants so you can determine if your PM is doing it well or not. I see investors on these forums every day asking questions about how to handle particular problems, then we learn that they have a Property Manager! If you have a Property Manager, why come to a bunch of strangers for advice???

Quote from @Oren Peleg:

It's important to learn the law, preferably before you need it.

Do yourself a favor: buy "Every Landlord's Legal Guide" by NOLO. Written by attorney investors, it's full of practical advice pertaining to management of investment property, has sample forms that can be edited, and - most importantly - they tell you what your primary state laws are and where you can read them. It's updated every year and is the best $40 you'll spend as a Landlord. There is one book for 49 states and a separate book for California.

You have an eviction pending. Once the lease is terminated, your clock starts ticking for return of the deposit. You can apply the deposit towards unpaid rent, cleaning, and repairs. If your lease does not allow for a forfeiture of the deposit then you cannot automatically keep it.

I recommend you work with an attorney to change your lease and include a forfeiture clause, if legally allowed.

Quote from @Ryan Ness:

I am 22 years old and a licensed Realtor in Lafayette, IN. I am currently looking for my next investment opportunity while also working to help new clients who are focused on building generational wealth through Real Estate. 

With the market being scarce at least on the listing side of things, what are some daily practices you have taken on to ensure that you are still moving forward even when it may feel as though you are just spinning your wheels?

Right now I have had a lot of time available to read many books on finance/investment/real estate, but am having a hard time deciding where the most impactful area would be to take action. I am living in one half of a duplex, which would cashflow at a minimum of $800 once I move out, so I am eager to find the next opportunity to be able to take advantage of this cash flow. I have received $7,000 so far that is set aside for expenses in high-yield savings as the property will likely need an HVAC and Roof Replacement in the future. HVAC is budgeted as a $16-18k expense to entirely replace both units (worst case scenario) and then the roof is budgeted for $12k. I have cash liquid beyond the income from the property I can draw from if necessary but I like to keep it separate and just let the CapEx account build.

The real estate sales that I have done so far have been all from family relationships and family friends and I am looking to expand my reach to help more people in the real estate industry. With the slow market, I am having a hard time finding balance between committing to either RE sales, or my Full-time job that requires about 85hrs/week, and looking for investment opportunities. Does anyone have any advice from a similar experience?

 @Ryan Ness I think you are doing all the right things and are doing a lot! I'm sure you'll see great results in a few years.
I think Bigger Pockets is a good place to find clients when you first get started.  I've heard about many successful stories.

@Ryan Ness That fact you own a cash-flowing duplex at 22 y/o is crazy! I wouldn't sell. Affordable multiple-family is dried up and hard to find. You'll struggle to find a deal that replaces the benefits you're getting today (taxes, cash-flow, reserves piling up, location, etc.). 

I've been investing for a few years (distressed SFH) and haven't made much money. Everything cash-flows but it's lunch money compared to market appreciation and forced equity via rehabs. We did the cash-out refinances but that $$$ went right back into the next deal or paid off bad debts. If and when we selling our current primary will I experience actual money. 

If you're trying to time the market... don't waste your time. Keep working, grinding, and selling properties in your spare time. Real estate agents take on the least amount of risk! 

Quote from @Ryan Ness:

Quote from @Dominick Johnson:

Anything not netting a negative cashflow is profitable, but only you can determine how much profit is worth your time and investment. I personally set a minimum of $300/month cashflow for me to consider purchasing a property.

Same factors will help you determine whether to do a flip or LTR. Flip will take you probably 6 months of hell and you have a huge learning curve being your first REI, which is high risk for minimal (if any) profit. Rentals can be renovated in a few weeks and if renting doesn't work out you can likely sell it quickly in this housing market with lack of inventory.

Best of luck!

 Thanks for your reply Dominick. By this are you meaning $300/mo per unit?

Correct. People who say cashflow doesn't matter and focus on CoCR on your investments aren't trying to retire early through REI. They are focusing on REI being their source of income in retirement. I want to have time freedom now, not when I only have 15 years of quality life left. The way to do that is by replacing your income now with passive income, aka cashflow.

I really love what @Brandon Gale mentioned. We're in a similar situation with buy/hold SF rentals in Indy. 

We struggle (1st world problems) to find properties that pencil out. We only have a few doors (all BRRRR-ish deals) and I want to scale. I'm in the camp of holding for life (bias on Indiana) but we decided to sell our primary and buy another. I think capitalizing on the heavy lifting completed when I bought the property makes MORE SENSE than renting it out watching it get torn up as a rental. It's a bit over renovated. The equity and tax savings (2/5 years primary exclusion) justifies selling and hunting for the next property.

Hey @Ryan Ness - that is life, it has its ups and downs. I'm only a few years ahead of you and can relate to what you've mentioned. 

You may not like to hear this, but nothing comes super fast or easy. The opinion I have is whether you've figured out what your actual long term goals are, and it's ok if you haven't, you're 22. 

I only say that because when I was in a similar position, I couldn't devote my time to everything I wanted to do, and realized that only when I started cutting things out I could really go deep into what was for me. I quit my job and got my real estate license because I knew I wanted to be in real estate long term as an investor and real estate player. Doing it full time has led me to connect with other moves & shakers that I wouldn't have been able to had I still had a fulltime job and invested on the side. 

I'm not saying this is what you have to do, but it will help you to get some more clarity about your long term goals and work backwards from there. I've yet to meet someone with a W2 that also has a real estate empire. Nothing wrong with a good job and salary, but it just took time away from what really excited me :) 

Hi Ryan,

Stay ready! Even in this market, there are deals to be found every day that can offer strong CF returns. In a sellers market like this, you may have to work to find deals in less conventional ways, and this all starts with networking. 

If you're very busy, and already staring at about $30k in CapEx, you could consider selling your house hack and 1031'ing it into something with larger CFs.

Was in a very similar place about a year ago. House hacked a 3 family that cash flowed about $1k/month when I moved out. Was super eager for the next move but felt I was spinning my tires looking for it. Was searching everywhere for another multifamily to house hack but the market had gotten crazy in my area. Had already done a cash out refi so couldn't pull anymore money out. Thought about flipping, tried for off market deals, but wasn't working. I finally broke through when I decided to consider something I never thought I would, I started considering selling the house I hacked. 

It was a great investment with easy cash flow so I never thought I would want to sell it, but I decided to entertain the idea and really think about ALL my options. I realized that the equity I had in the property was enough to put 20% down on a short term rental that would 2x or even 3x my cash flow, and have additional cash leftover.

So I sold the multi I thought I would be holding for years and the last 6 months have been great. Hard work, but great. I'm doing something new in the REI world and making much more money with my new property than the multifamily (for more effort but still worth it).

Not telling you that you should sell your property, everyone's scenario is different. But if you hadn't considered whether you could get a better return on equity in another market, or another investing method, it may be worth looking into and it may get your REI journey moving again.