All Forum Posts by: Spencer Hilligoss

@Dale Rast - no problem. i'll DM you

@Ken D. - 100% supportive of getting the "base hit." 

Example: Our first deal was an excellent one for us (my partner/wife and I).Its a duplex. It cashflows. It's may even appreciate well, based on the market... but that would be a bonus.

The CoC and ROI ain't anything to write home about. It has been the perfect 'learning deal.' Most folks on BP would categorize it as a 'base hit.'

I ain't sharing the financials on here because I've seen how, on occasion, some investors start high-roadin' newbie with their epic tales of deals-to-end-all-deals and miss the point. The point is: other investors don't need to agree with your strategy, because it is uniquely your strategy. If it works for you, it really doesn't matter what any other investor on the planet happens to think about it. Building that confidence in your own competence and gut is a critical part of getting started. 

If you want to hear more about ours first deal, happy to connect if you send over DM. 

Since that 'learning deal'.. we've closed homeruns. These homers likely wouldn't have happened if we never entered the game and built the competence/confidence to charge forward. 

My advice: Set your criteria with a 'learning deal' discount. I'm not advocating to rationalize and flex on your criteria, I'm  advocating for deliberately discounting it because it's your first, acknowledging the context of your situation and setting a strategy that aligns to the amount of hustle, education and proaction you are prepared to take. If you truly can't find a 15%+er... step back, reevaluate, make a new plan and move forward. You've got this!

Creditors tend to look at well-managed mortgages as a positive. I have 8 mortgages open currently and my score is around the same as when I had no mortgages. Still in excellent range. If you pay them on time, it helps you develop your track record... in their eyes.

Folks tend to spend significant time and worry to build up their scores, only to wear them like a trophy... as if they have some kind of inherent value (earlier in my life/career, that's the kind of nerdy thing I did, at least!). 

Personally, I think the best thing you can do now is put your excellent credit to good use, intelligently. Credit scores have no value unless you put them to work!

@Domenick Cava - the answers that have been provided on this thread are solid. Kudos to @Michael Plaks @Ashish Acharya @Peter M. @Caleb Heimsoth.

*Disclaimer - I am not a CPA or tax/financial advisors. Please speak to one before making decisions around topics like these. Here is some tips i've accumulated from research, my CPA and my experience:

• Travel writeoffs and out-of-state entity structures are not inherently related. Meaning...
  • ... if you have a business anywhere... 
  • ... and you have a valid reason to travel for that business, in like with what your business does....
  • ... and you have a documented, simple business itinerary for that trip drafted and timestamped before that trip...
  • ... and you have a basic system to track expenses, mileage, etc. (e.g. receipt capture apps)...
  • ... and you take note of things like 1) attendees at meals/meetings 2) purpose of meeting and topics discussed..
  • ... and you have documentation to corroborate your 4 hours-per-day of business-related activities (such as documented/scanned copies of collateral related to an investment property you're touring...

Well, my friend... then it sounds like you may have a solid business expense write-off for that trip! Then again, what do I know? Ask your CPA!

@Abimael Rodriguez - a couple years ago, I asked for 1 thing from my wife for my birthday: "please read Rich Dad, Poor Dad... cover-to-cover."

Long story short: She read it. Flash forward a couple years and we now have a real estate portfolio together, and we are 50/50 partners in a thriving business. 

•  Set goals together, for your life together - once RD,PD gets you both on the same mental wavelength... setup a nice lunch/dinner together and open a conversation about goals for your life together. And keep this conversation going over the course of time. Set your "big why" together... and THEN worry about the tactics.

• Other books (in audiobook or paperback)
  
  • The Book on Rental Property Investing - Brandon Turner (of BP!) @Brandon Turner
  • The ABC's of Real Estate Investing - KenMcElroy
    
• Podcasts - listen to them. a lot of them. And then pickout the best ones that you think will resonate with her. Occasionally share them (not every day, and probably not every week, even... send them over occasionally. Be thoughtful of timing and don't overwhelm). 
• Be Patient - she will get there on her own timetable, but it's important to let her drive it. If you push, you'll probably push her away from it instead of igniting the spark of REI interest
• Be available, on her timetable - there will be moments when she's ready and interested to talk... but those moments might come when you're at the end of a long day and don't want to talk shop. It's in those moments that you've gotta think about her, not yourself, and get interested in the conversation. She's ready to rock, so make it happen!

The "rich dad, poor dad strategy" was mentioned by @Rebecca Zemek on this thread already, as well. It is simply the best starting point for starting the mindset shift into real estate investing (and entrepreneurship, in general... i'd argue). The power of this book can not be overstated.

@Account Closed - goal #1 is paying off the high-interest credit card bill. Sounds like you have some time before the 0% promo runs out, but my advice would be to crush that debt before your next real estate investment.

It's likely that interest rate that kicks in on the Home Depot card at the end of 2 years will be in the double-digits. If that's the case, the only (theoretical) scenario where you'd want to carry the credit card debt while paying interest, is if you found a cash-flowing deal so outstanding that it covered the interest you're paying on the credit card and provided returns north of the added expense. I do not support this theoretical, alternative plan... but wanted to play it out here, to help you think through it. 

congrats on making the jump into real estate so early in your career. Sounds like you're in a great position to pay down debt, save up capital and make your next investment in the coming year or two!

@Brandon Handel - it's a good call to put this question out there before biting the bullet on the pro account. here's my experience with the calculators...

• SFR deals = BP calculators are great
• small multifamily deals (2-4 units) = BP calculators are great
• large multifamily deals (5+ units) = BP calculators can get the job done until you get north of 10+ units, but not beyond

If you're looking to analyze larger deals, strongly rec'd Michael Blank's Syndicated Deal analyzer (the "SDA). It's worth the price tag. That said, i've run dozens of analyses with the BP calculators and recommend paying for the Pro membership.  You're getting value out of the membership and supporting the growth of this awesome platform and community

@Evan Parker - below, I shared a relevant thread on this topic. 

In answer to your question: Yes, it is absolutely reasonable to request financial statements... if your intent is legitimate. If you are a serious buyer and are poised to close, it's worth asking for a T12

https://www.biggerpockets.com/forums/432/topics/403474-are-owners-willing-to-show-their-t12

@Bhaskar Pandey I went through this process last year and did two lengthy posts on he process. Here’s the second one. 

In summary: it helps to work with investor friendly lenders up front, but if you have a convention bank lender: ask for permission and jump through their hoops https://www.biggerpockets.com/forums/48/topics/518873-llc-transfer-approval-from-a-large-conventional-lender-part-2

I think second blurb you drafted here is spot on (starting with "the financial protections.."). There is a legitimate learning curve to these private placement investments. Even if an investor climbs the curve, it doesn't mean they have the financial wherewithal to handle a complete capital loss if a deal goes south. I've come to appreciate some aspects of the current Reg D 506[c/b] structures because they drive the right qualifying conversations with prospective investors.