All Forum Posts by: Scott Kaczmarek

@Benita Matheson - I'll echo those that said that it's okay to take a breath between properties! Like the others on here, I built my portfolio over a period of years and I don't regret my approach. First, slow and steady allowed me to get my arms around each property and make sure it performed as expected. The banks like to see this too! Second, it allowed me to not only save up for the next down payment but I also made sure my reserve account was fully funded too. One of the biggest REI dream killers is an unexpected expense (vacancy, repair or both) that wipes out your available cash. I don't think reserves are something that get enough attention on the BP forums. Finally, my portfolio would look very different (not in a good way) if I had the means or pushed to buy everything in a short period. The houses I buy now are a better class of property than my first couple. I just found my sweet spot but it took awhile and some experience to find out what I really wanted.

BTW, I love you can add another unit to an existing property as your near term play. Always maximize what you have first! Then go buy your next one as a house hack next year. My best to you.

@Nathan Leger - The fear is normal, but with education it lessens. The big thing is you have to act on that knowledge. The first deal will likely not be a home run, but that’s okay. The first deal helps you leverage your knowledge but it also shows you areas to improve on the next deal. I found I was able to buy my first property after I did the math. The math showed me the property fit my financial criteria for a rental, based on my education, so I bought it. I also had reserves already set aside which also increased my confidence. As the saying goes, do the math and the math will tell you what to do.

@Silas Barker- I too am an out of state investor. You shouldn’t have to provide landscaping and you should definitely hire a property manager. Regarding the $75k, I would urge you to look at a higher price point. I was buying $100k+ homes 4 years ago and I’m now looking at at least $140k today. The numbers pencil well on $75k homes but those are best left to the local investors who live and breath the market. In my opinion if you’re out of state you need to protect yourself with a more stable tenant and reduce your risk with less frequent turnover.

@David Levesque - As many have already stated, not all debt is created equally. Real estate debt works if you can responsibly outsource the debt payments to a qualified tenant. Even then you need reserves to get you through those rough spots of vacancy, maintenance, cap ex expenditures, and the recent inability to evict. I think the reserves aspect gets glossed over on a lot of posts, but it can mean the difference between sleeping well and a fire sale of properties when things get tough. I’m not in any hurry to pay down my mortgages, and that’s a personal decision, as I like my tenants pay my debt off. Good luck.

@Bryan Danger - I started my career 27 years ago with the first 23 years focused on saving for retirement in traditional retirement accounts. Until 5 years ago I had no concept of building streams of income instead of a pile of money. 4 years in we have a portfolio of 5 SFRs with the intention of adding another 1-3 units. We never wanted a big portfolio, but the eventual 6-8 units will cover about 1/2 our monthly expenses. My plan is to step back from my career (lots of stress and not as much fun) and get a job that I would be more passionate about even if I’m making a lot less money. The rentals will fill the income gap and bridge the time gap until we can tap into the pile..ha ha!

@Paul E Romero - I’m an out of state investor (“turnkey” is such a misused word) and YES! If you’re going to spend $40-$45k in down payment, closing costs and a reserve, spend the $1k and meet the team and see the product! Those that don’t are the ones who can get ripped off.

The SCOTUS decision was just the first step. The real question is how long will it take the courts to wade through a years worth of evictions? Then how long will it take local sheriffs to put out tenants? I’m happy step 1 was done, but steps 2 and 3 may take awhile. Those cash reserves still have a ways to go!

@Zoie Holley - I think in most instances it’s either lack of funds (savings when starting out) or an inability to take effective action after you’ve educated yourself over a period of time.

While there are options to enter REI with little money, you have to make up for it in hustle and grinding. Most, including myself, just don't want to do it. Instead we work hard at our 9-5 jobs to earn an income and be disciplined to set aside dollars each month to invest in our next investment. As I said, there are other ways but I'm going to guess the vast majority do as I describe.

Education is essential and having ‘A Why’ is important but at some point you have to put the phone or book down and execute. Realize you won’t know it all and you’ll likely learn more once you start. I took six months to learn everything I could, build my cash fund, develop my strategy but by the end I leapt and invested. I knew enough to not be a danger to myself but I learned the most on the journey.

Best to you.

@Karla Castro - I use REI Nation (formerly Memphis Invest) and have had success. They do a nice job and their properties, property management and customer service are top notch.

@Ruben Cuevas - I did fly out to meet the teams I was potentially going to work with. That’s really where you kick the tires before putting money down. I would absolutely recommend spending the $1k to meet them prior to plunking down $35k-$45k on a down payment/closing costs. Once comfortable with the team, I never felt the need to see the properties. I already knew what I was basically getting.