All Forum Posts by: Simcha Davidman

Welcome @Jeremy Bourgeois and thank you for your service.

If I could do it all over again, I'd buy a small multi-family (2-4) units with a FHA loan and house hack right from the start. And as soon as I could afford another down payment (after 12 months), I'd move and do it again, keeping the first one. You might have other, better financing options as a veteran.

When you analyze a deal, include property management expense, so it can be relatively hands off if you want. And if you have time and the inclination, you could self-manage to "enhance" your experience and pay yourself the extra.

Sounds like you're on the right track. Good luck!

Did you post a link to a video? I don't see any link or video.

I like investing in the stock market (that could get me shot around here), but yes, there is definitely risk involved. How badly and how quickly do you need the money? I think that should really determine how you proceed.

If you expect to save up enough money over the next 6 months, so the returns you may get from the stock market may not be worth the risk. But on the other hand, maybe you're saving at a fast enough clip that you could take a hit in the stock market and only be delayed a couple of months.

If you think it will take you 6 years to save up enough, you can weather a market correction much better over that longer horizon. But again, on the other hand, if it takes that long to save up the money, should you put it in a "risky" investment?

Good luck with your decision!

If you are self-managing your own units, you're building a track record. Work with that. Do you have systems in place for marketing, screening and placing tenants, collecting rent, dealing with tenants who don't pay, and turnover? If not, build out those systems for what you have already, and then go market yourself to your target audience. Cheaper is not necessarily better, and I think most people searching for a pm will recognize that.

Good luck with the endeavor!

@Matt Ten my pleasure, hope it helps. @Joe Jor has some pretty good points. The insurance just slipped past me - on a property this expensive, he's definitely right

On thing to consider is that 3% appreciation on a property is not all bad. If you're putting down only 25%, it's really like a return of 12% (3% / 25%) (not including the reno costs for simplicity), plus loan paydown - so it's not really bad at all. Just bear in mind that as your equity takes up a larger part of the asset, you will get less of a boost from the leverage.

Have you used this broker for anything before? He's the broker trying to sell you this property? Is he yours or the seller's? Do you know with certainty that he regularly lists and rents out houses? Have you seen his list of available rentals, or recently rented out properties? Generally assume that brokers projections are on the high end. If you cut the rent by 10%, what happens to your returns?

I think you're right - having that $1k cash flow every month will make things that come up fairly easy to absorb. You need to bring a plumber or electrician in for something stupid and it costs $200, it's way higher than your $42.50 budgeted, but you're also not going to pull money out of your savings to make the mortgage payment.

On the other hand, if you're sinking $191k into this, is it really the best use of all that money to earn 3-5% cash returns. You may determine that it is. I'm not saying it's not a good move. I don't know your financial situation (I'm not asking :) ) or what your short and long term goals are. Just in terms of safety, assuming the rents are really that high, I would think you should have a pretty nice margin of safety. Other than that, it becomes a lot more subjective.

I think the exercise of going through the math and putting the offer in is beneficial in and of themselves, whether or not you proceed and whether or not you get the deal.

Good luck!

@Account Closed in that getting educated is huge and will give you a boost when you are able to move forward.

But I don't think it's necessary, in a formal sense. Bear with me for a minute - wholesaling is a way to get into real estate because you don't need money. You "simply" find a deal, lock it up, and then find a buyer. So you need 1) hustle and/or systems and/or network to find a "deal," however you define that (based on education and networking within your market), 2) knowledge and the ability to sell yourself as a buyer to the seller to lock it up, and then 3) hustle and/or systems and/or network to find a buyer.

In essence, you will have to bust your butt to find a good deal and bring it to an investor who is reliable to close, otherwise you will may be out of your deposit and can tarnish a relationship and potentially your reputation (granted, likely on a limited scale). You will be doing all the things that successful wholesalers do, as well as successful investors in every other niche out there.

So bust your butt in whatever niche you want. If you want to get into buy and hold, find other investors who range from owning a property or two to a whole load of them and start providing value - likely your time and hustle in finding "deals" (learning to provide value to those more experienced is a whole thing in and of itself) - and you will in turn 1) learn, 2) gain experience, 3) gain wealth, and 4) grow your network.

Brandon Turner is just one of a ton of stories on the podcasts (not even sure his story is ever told in completion in one podcast) in which people get into a variety of niches because they partner with others. You may not make it big within a couple of months or couple of years. But I think you can do it. Real estate investing can be very successfully implemented as a team sport.

One thing I learned from my career in general is that, unless there is a very specific skill set/experience you are seeking, it is best to get into the "field of your dreams" as quickly as possible.

Good luck!

@Peter Brisette welcome to BP! I don't know what 1031 fees may cost, but @Yonah Weiss might.

Also, note that if you already have $77k in income and add $100k plus depreciation recapture onto that, you'd likely be in a higher tax bracket.

Lastly, don't let the tax tail wag the investment dog. If you find a good investment, why not defer taxes (I assume it's worth the fees because a lot of people do it, but you know what happens when you assume). And if you do not find a good investment within the limited time frame, then it should be no question to pay the cap gains tax and reinvest into an appropriate investment when an opportunity comes.

Good luck!

@Jim K. I didn't realize we had such a literalist in the forums. But you're right - I should've been clearer that I meant within the real estate field, since that is solely what the op was talking about. Next time, I will limit my encouragement to only realistic scenarios.

Thank you for the feedback, sincerely!

I will close by saying that in 2005, none of us knew that you actually may have been able to compete in the women's olympics in 2020...

Thanks, that's what I'm here for :).

Just for clarification, I did not mean split it 50/50 - but whatever works for you. I'm a huge proponent of being comfortable enough to sleep at night. Very few investments will be worth the crippling feeling of worry and discomfort that we may feel in certain risk situations, and that's for each individual to determine.

@Kristi Kandel congrats! Looks like a great deal, great picture! And great job adding value to this house!

Hi @Account Closed welcome to BP! You've come to the right place.

First, you definitely can do it. You can do whatever you want. But just know that you need to focus and be persistent. And know that to be a successful wholesaler takes a lot of networking/connecting and a lot of time to really set up. Once you have your systems in place, things can be more automated and less time intensive on your part. But you gotta get to that place first.

And yes, since you're in Tampa now, it would probably be easiest to start there. Try to meet with some actual people doing it down in that market and get to know them - and help them and provide real value.

But you do not have to limit yourself to wholesaling. Spend some time figuring out what you may want to do, what you think is most interesting, and then attack it like a pit bull.

Why do you think wholesaling is the best thing for you? Why do you think it's the only thing for you? I'm not implying that you're wrong - I'm curious to know why you think that, and also want to make sure that you've thought about all the alternatives.