All Forum Posts by: Tucker Cummings

 Steve said it all. Cut your expenses as much as possible, sell your cars to drive more fuel efficient ones or ones that you can get some cash through an exchange. (I had an '04 Toyota Tacoma that I LOVED. I sold it so I could get a little sedan. That saved me $200/month in gas. Maybe one day I'll be wealthy enough for a truck again lol). Think about downsizing your home for lower payments, house hacking and/or moving closer to your job so you can save time and gas. These are painful, but they help save some household operating costs. Lastly, comb through your bills and see if there's anything you can cut. 

Once expense are out, think about increasing your income. Maybe look at getting into a sales job in an industry you like or pick up a side hustle. Also, don't be afraid to put some money in the stock market. I like dividend stocks, index funds and mutual funds  (I like AT&T, Verizon, Pfizer & TQQQ) because they're less volatile and they cash flow. You may not get a huge return, but at least your money isn't in the bank losing value. You can accumulate some appreciation (hopefully) in the stock market and then cash out for your down payment.

Lastly, as Steve said, start networking ASAP. If you want to go far in Real Estate, it's a team sport. Network with property managers, other investors, wholesalers, agents, contractors, etc. You never know who might have a deal for you.

@Patrick Flanagan there are lots of great markets and everybody has an opinion on every market. You just have to do your own DD to decide if it's a good market. I would first look at if the target market is within 30 minutes of a major metropolitan area with lots of diverse jobs. Large military bases and colleges are also good areas to take a look at too. This will help you identify that there is money in the area and stability. Past that, I would just look at purchase to rent ratios.

There are so many metrics people look into, but really I would advise just not to overcomplicate it.

Nice! Love hearing stories of people pull off great deals. Can't wait to hear about the next one!

In a nutshell, single families can have longer staying tenants and possibly stronger appreciation. I say possibly very cautiously. For example, I had properties appreciate 15% last year just because other properties sold for more. I didn't do anything, it's just increasing prices, so that's kind of nice. From a competition standpoint, you're going to be competing against every investor and homebuyer, so competition is higher. It's also more liquid and you can convert into cash more easily by selling or refinancing.

Multifamily usually has stronger cash flow, but you control the appreciation rate through increasing NOI. From a competition standpoint, you'll be competing against few buyers, but the buyers might be more savvy. The seller is also probably more savvy too. The downside is that the tenants might not stay for long, and you might have more problem tenants. Again, "might," not definitely. If you need cash, it might be difficult to convert the asset to cash though.

I invest in single family right now, but I'm actively trying to get into multifamily more quickly. The opportunities there just seem to be more stable and make more sense. Though I think it's good to have a healthy mix of both.

I’m looking at property that would probably be best torn down and I’m wondering what the financing process looks like for a new build.

Let's say I want to tear down a SFR then build a small Multifamily on it. Are their bank or credit union options typically available for something like that? If so, what are they?

Am I even asking the right question? How do others go about financing something like this?

@Ryan DiCanio several ways you can find off market deals. Connect with other wholesalers and investors, you can drive for dollars, send direct mail, make cold calls, build a website and drive traffic through SEO and paid advertising, etc. The only marketing forms I advise against are bandit signs, ringless voicemail (rvm) and text blasting (sms). It just comes off as super spammy and can build a bad brand name, plus bandit signs are basically advertising by littering. 

Good luck!

In the word's of Ron Burgundy, @J Scott is "kind of a big deal" so let's all pay attention when we see him in the forum!

I can personally attest to his post and linked forum.

- Provide Information

- Build Trust

- Build Rapport

Last year I was getting a home appraised and I met the appraiser at the house. We spent the first 20 minutes talking about his kids and grandkids, how he was getting out of a messy divorce, but met the love of his life at the age of 62 and, as a matter of fact, he started crying just talking to me about how joyful he was with his fiance. We talked about a handful of other things, but this was some strong rapport we we're building... it's not every day a stranger cries in my house!

I let him do his thing around the house, walked it with him, answered questions honestly, asked about how he got into the appraisal business, etc. Throughout this just "being a good dude" and welcoming to him, it seemed like we had built up a level of trust. I felt like he could tell I cared about this house and what it meant to me.

Lastly, as we we're wrapping up, we convened in the driveway and I just asked him, "So what do you think this house should appraise for?" He said, "Well, just first glimpse, I think it's around 260k based on the comps and what you've done with the place." My response was, "Man... that's disappointing, I was really hoping for about 275k. You know, I really appreciate you coming here and doing this. I don't want to tell you how to do your job, but if you have a chance to look it over I put together this packet of the comps in the neighborhood, before pictures of my house and a list of all the repairs we've done to it since we got it. I thought it might make things a little easier for you." (Provide information"

He said, "I appreciate that and I'm not too proud to take a look at what you've got."

Appraisal came in a few days later for 277k!! Was it totally based on the conversation we had and the information I provided? I like to think so, but I can't be certain. What I do know is if I hadn't met him and talked with him, provided information, etc. and the appraisal still came in at 277k, I'd be sitting here thinking, "geez... maybe if I had done the extra credit work, I could have got 285k!"

Hope this helps and Good luck! 

My advice:

1) Acknowledge the seller's market, know that it's going to be tough to get good deals on the MLS. So open your funnel to off market deals.

2) People will always tell you its a good time to get in, a good time to get out, a good time to buy, a good time to sell, a good time to wait, a good time to act. Do what you want, just be smart and calculated about it.

3) Get educated. Ditch music, listen to podcasts. Ditch news feeds & social media (unless marketing) and start reading books and blogs about investing.

4) Try house hacking your first one. That's my biggest financial regret, that I didn't do this.

5) Acknowledge that you're going to mess up. It's part of the process and its the cost of your education by doing.

6) Just do it. Don't overthink stuff. You'll learn the most by doing.

I'm in a similar situation... made just over 150k last year so I didn't make the cut. But your response brings about another question - you mentioned the depreciation is suspended. Let's say I leave my W2 job in 2 years and my depreciation from my properties has been suspended for 3 years. Does that mean I can take the depreciation all at once for the cumulative 3 prior years? So if I have a property worth 275k, at the end of the 3 years I could take a loss for 30k, after leaving my W2. Am I reading that right?

I also hold my properties in an LLC.

Just looking at several indicators, we're seeing low inventory across the board, inflation around the corner, interest rates staying low, people going back to work... I'm sure there are other factors at play but it looks like everything is pointing towards further increasing home prices with no real reason for it to come down. If I had to take a stab at it, I'd predict the middle class is going to get priced out of homeownership. Not totally... but if you're a first time home buyer, moving because of a job, etc. you're going to have a tough time. 

My sister, who is already a homeowner, is going through this right now. Have to relocate because of a job change, nothing for sale on the traditional market, pretty much getting forced into a rental where her equity is going to get quickly leached off. 

As investors we can find the off market deals, get some cheaper prices, get creative for deals, use the equity/cash flow/private lenders we already have to get more deals... so I'm not really feeling bad for investors, I'll keep finding and buyer off market deals. I just wonder how this is going to affect the middle class.

What do ya'll think? (please no political comments)