All Forum Posts by: Steve K.

@Jay Hinrichs  Thanks Jay; I stand corrected....you have better symantics

@Account Closed , while your ambition/goal is commendable,  don't expect banks and investors to trust you with their money when you're a 20-yr old amateur with no experience.

I know of a success: a family friend didn't want to go to college. Instead went to a trade school....learned to be a carpenter, electrician and plumber. Became a general contractor....in the beginning on small remodels. Started fix/flipping on his own investments. At about year 15 or 20 years experience he became a successful developer in Reno NV, building luxury homes in his own 20-lot subdivision.

Personally, I get excited reading about young people who start out small with the BRRRR method, like Austin and William here:

https://www.biggerpockets.com/forums/48/topics/429980-officially-financially-free-at-32----exciting-day

https://www.biggerpockets.com/forums/223/topics/445367-full-time-employee-multiple-brrrr-side-hustle-2875-to-goal

At 2.5 years' into investing, couldn't either of them buy a vacant lot and finance construction of a "speculative" home for sale? They'd then be a small developer. The next step could be to buy 5 lots, then 20????

@Scott H.

Congrats, if you're 7 years from paying off a mortgage. I've changed my mind on this in the last few years. I'd be in the camp that is comfortable with using "leverage" to invest in real estate. You might find similar discussions here, helpful:

https://www.biggerpockets.com/forums/52/topics/448886-should-i-pay-off-my-home-or-buy-more-rentals

https://www.biggerpockets.com/forums/48/topics/448603-paying-off-debt-first-or-start-real-estate-investing

https://www.biggerpockets.com/forums/48/topics/445005-invest-in-real-estate-or-pay-down-mortgage

@Jordan Decuir

I read up on this 17 yrs ago at the old Y2K. A wide variety of folks are emphatic about their gold. In increasing complexity:

• Lots of opportunities to invest in gold mining companies (most eschew this "paper gold"; it won't be there if there's a financial collapse)
• You can buy a Canadian ETF that has gold bullion in a bank vault and you own a few ounces or a lot of ounces. You don't have it, if they go bust.
• If you buy gold coins, keep em in your personal safe
• Keep em in a banks' safe deposit box (fails if there's a banking collapse)
• If you're worried thieves are coming looking for your safe, there were elaborate schemes to hide your stash behind the drywall inside walls, that won't be easy targets.
• If you're worried thieves are coming with a metal detector looking for your gold, you bury it in the back yard (or it might be a compound in the woods, because you need food, guns and ammo for the apocalypse); bury 50 pieces of junk metal car parts 2' deep in 50 locations. Only one of them has the real stash at 4' deep below one random one  junk car part....a home made PVC pipe/sealed container. Dare the thief to have the patience to not give up when they find 50 false shows.
• :)

@Jeffery Waicak

....you seem to be wanting to justify that "healthy eating and devotion to exercise" is a key.

I'm overweight and out of shape.....I procrastinate those two areas, but I work hard at my primary and my 2nd job (REI) to meet my financial goals.

I've spent my adult life believing one of the keys is "delayed gratification". I don't need the expensive car today for status/bragging. I drive older cars. Save and invest, instead of consume it.  Live below my means (except housing).

I'm more aware everyday that there's a younger generation that wants "quality of life" from the day they get out of college. They seek a job that is only 30 hrs a week. Claim to dislike materialism. Don't know if they are going to be happier in the long run.

I believe habits of the poor are a "victim mentality"....and words like "I can't get a break", "everyone else gets all the luck", "can't wait until Friday".

@Patrick M.

I used to have the goal of paying off my mortgage (early). My wife latched on to the idea too, when we had a 12.25% loan in the 80's. Then an 8% loan. Prepaying the mortgage wasn't that far off from stock market mutual fund returns....so there wasn't that dramatic of a lost opportunity....paying down debt felt safer. Owning the debt free house brought comfort/security.

Recently, I chose to take a large refi on my primary mortgage, a new 30yr loan at 3.625% last fall. I have my home equity working for me on two REI projects, that will return way higher than 3.625%. I'm starting to think I might even head into retirement with the mortgage payment.

Patrick1 has part of his capital working in REI at xx% return.

Patrick2 has part of his capital working to save 3% interest on the primary residence.

Patrick1 seems to have goals of catching up to college and retirement funding, and looking to make xx% a bigger return/yield.... but his friend thinks he likes the risk/reward of the safe 3%.

Only you can decide your risk/reward tolerance, but a beautiful thing happens when you have your mortgage fixed and rent on REI grows with inflation.....your margin/returns grow.

good luck

@Alexander Parada , .....@William Collins here in this example:

https://www.biggerpockets.com/forums/223/topics/445367-full-time-employee-multiple-brrrr-side-hustle-2875-to-goal

...shows how he used $150,000 down payment to acquire 9 houses in 2.5 years. He now has about $500,000 equity in $1.3 million of real estate, and has $200,000 cash in hand back to do more deals. The 9 houses cash flow $5700 per month net, after expenses. Compare that to buying a single house for $150,000 and having debt-free rental income on just the one house (or in your case, wanting two for $300,000)

@Jeff White

I see your question. I peeked and see a property that smells like yours.

At Denvergov.org, property records, it says "property type: residential duplex".

There might be some comfort, as on my MLS system, the REALLIST system for us agents says:

I wonder if your title companies search can clear that up, or a trip to City Hall, zoning department or assessor's department?

@Jeff White

Can't tell from what you're saying. In Denver, the current zoning isn't the final answer. You could have been a lawful quad at the time it was built, and the City subsequently changed the zoning. In that case you're "grandfathered".

Separately, there no doubt are properties built as a duplex, in lawful duplex or townhome zoning at the time, but to convert to a more dense quad would require the City to issue a waiver. Your property could be "grandfathered" on that account.

However, there are also lawful duplexes, wherein the owner illegally converts the basements into 2 more units. If that's the case, you arent' covered.

It's supposed to be to get a building permit to put in an extra kitchen, (i.e. to make more rentable units) the permit would only be authorized if zoning at the time allowed the quad....or the waiver was granted.

Does your seller warrant that all modifications were done to code with legal building permits?

@Alexander Parada , I recommend you buy 8 new rentals w/ 20% down each, as @Sharon Tzib says.

It's aggressive, using more leverage/debt, but the risk/reward is attractive to many investors, me included. I think you're attracted to having no mortgage so that you can afford the unexpected surprise (vacancy or major capital repairs; for example a new roof required). These can be managed by keeping a "reserve" for such items.

If Alexander1 has 2 homes paid off with $300k invested, you have maximum cash flow in the short run.

If Alexander2 has 8 homes with 8 mortgages, 8 tenants are paying them off for you over the next 30 years, you'll end up with $1.2 million (not $300k) in properties. And, what if your market experiences a little appreciation.....that percentage applies to $1.2Million of property, vs $300k (of course, admittedly, if properties depreciate in the future, that applies to 4x bigger basis)