All Forum Posts by: Scott Johnson

Owner occupied government backed loans don't let you buy in a LLC. Don't waste your money on the seminar, book, LLC filing fees for your first time buyer deal.

Go hunt for down payment assistance. Get your FICO score up. MAximize your income and liquid assets... instead

Hi everyone!

I am new to real estate investment, but currently have two properties that I would like to turn into assets and start growing my portfolio. I am seeking feedback on what someone more experienced would do in my situation.

Property 1: Condo

• Rented for 10 years
• Negative cash flow of $300 (HOA fees)
• Loan balance: $30,000 / 5.25% APR
• Estimated equity: Approximately $100,000 based on recent property sales

Property 2: Single-family (Primary residence)

• Purchased in 2017 / 2.5% APR
• Loan balance: $230,000
• Estimated equity: Around $250,000 based on recent property sales

A little about my "wealth", my credit score is in the 800s, I currently have $50,000 in stocks/crypto and your typical Roth, 401k. My goal is to purchase an apartment building or a few multifamily properties for long-term or short-term rentals. I also have connected with another investor that is willing to invest 50k if the re-payment is favorable. 

Now, this is where I need some guidance: I am contemplating whether I should use my stocks to pay down the condo. Once it's paid off, I would have a positive cash flow of approximately $300-$400/month, (after taxes, insurance, hoa, water utility)

On the other hand, I could withdraw money from my stocks or take a HELOC against either or both properties and use the funds to purchase a multifamily property or as a down payment for an apartment building. I also have a couple of credit cards that have plenty of credit with zero interest.
In a perfect scenario I would use the condo as a collateral, no down payment. Has anyone done this before??

I am looking to learn!! assemble a team, lender, real estate agent, CPA, and build a network or find a mentor. Finally, I want to focus in multi-families in Texas, North Carolina, Colorado and Tennessee.

I appreciate any advice or suggestions you can provide. Thank you in advance.

Hi. Unfortunately, 9 days before closing my lender tells me that I cannot close a conventional loan in an LLC. To transfer the house back in my name in 7k. Is there anything I can do to decrease this amount? Of course the conventional loan rate is much more feasible than the DSCR loan. Thank you.

Hello all. I have recently joined BP as a next small step toward my goal of replacing my 9-5 income with a more passive income. My primary interest is in buy and hold strategies. I am hoping to connect with successful local investors and offer my help in some form in managing day to day tasks (unpaid) in order to learn the real estate business inside and out. My goal is to ultimately add value and learn simultaneously. For context, I currently work as a Mechanical Engineer at a Consulting Engineering firm here in Austin. I welcome any and all advice for any willing to share it with me. Please feel free to reach out and discuss if you feel I could be of some value to you.

Hey Everyone,

I am Donovan Young I am 19 years old I sell cars at Gresham Ford I really have always had a dream to build wealth! For Me and my family but I do not know a ton. I want to learn I would like to buy a property in the next year. I have credit but I am 19 never had a loan before I wanted to know if you guys know of any options or opinions I can do I really want to do this and grow into my full potential as a young person aspiring to build wealth to give back and help people but I need to learn as much as I can about Real Estate Investing before I get a property so I know what I'm doing because I would be renting it out and still living at home because It would be just me and I work all the time so I would never be home so I might as well live with my parents and rent it out! so If any one has any advice let me know!!  

Hey everyone, what do you think is the best way to find deals when you are just starting out? So far I have used Zillow and LoopNet but would love to get advice on what works for you. 

Is anyone doing cost segregation studies on single family rentals and if so what are you paying? and anyone you would recommend to preform the study? TIA!

“Cash flow is king” is a mantra to many.

It’s repeated over and over in forums and conferences. 

I am not a “cash flow is king” investor

Pending one’s stage in life and career, I submit growing equity and increasing net worth should be the goal of most investors in their 30s and 40s and perhaps even in their 50s - as they enter and are in their prime income years. Presumably someone who has cash to buy investment real estate has a W2 income sufficient to cover their total monthly cost of living - their “job” pays for their lifestyle. So they don’t need cash flow to live off of. From folks in that position, I submit it’s better to invest for capital growth. Properties should pay for themselves with some cash flow left over to cover unexpected expenses. But the focus in my should opinion should be on long term capital growth.

Question: Who will be able to generate more cash flow when they want and need it?

Investor A with $1M of investible assets

Or

Investor B with $3M if investible assets

The answer is obvious, it’s investor B.

I see countless investors talking about buying a cash flow property.

I see countless brokers and owners trying to sell property by indicating “it’s a cash flow property”.

If I may offer my perspective on:

Does the property cash flow?

It’s an incomplete question with no answer.
I believe an additional layer of detail and sophistication is required.

I submit:

Every property will cash flow if you buy with all cash. Right?

So the better question the more informative question is:

What size cash down payment do I need to make so that the property cash flows?

Does an investor need to put 20% down or 30% or 50% down to cash flow?

That’s the better question.

Any question or statement about cash flow only has meaning when connected to the amount of cash required to buy it.

And yes in todays market with todays debt costs, I suspect most SFRs will require 30% to 40% down to cash flow. In my opinion you won’t find cash flow with 20% down unless the property and location are horrible. Even MF assets require 30% to 35% down to provide some cash flow. 

The “popular” opinion isn’t always the best opinion. 

One should tailor their investment approach to their assets - education income capital knowledge experience etc etc - and their goals. 

I’d submit investing for capital growth is by far the better option for many. 

Aim to hit line drive base hits not grand slams.