All Forum Posts by: Tucker Cummings

You've got a couple different options and it sounds like the best thing to do will be measure you're ROI for each scenario:

1) Put $3,500 in for touch ups and continue renting. Can you raise rent a little? What's you're ROI if you do that?

2) Don't put $3,500 in, just rent as is. What's you're annual NOI?

3) Put $3,500 in for touch ups and sell. How much could you sell for? What's the proceeds?

4) Don't put $3,500 in and sell. How much could you sell for? What's the proceeds?

5) Put $3,500 in for touch ups and refinance on 15 year loan at lower interest, continue renting. Considering closing costs and the touch up costs and lower cash flow, it doesn't sound like this will yield a good ROI.

6) Mentioned by @Jody Sperling, put in $3,500 for touch ups and put a HELOC on it. Lots of times with HELOCs there are no closing costs and keep in mind that you will only owe on the HELOC if you actually draw down money. Same way you only owe on a credit card when you use the credit card. You can also now draw down from HELOC, purchase a property (ideally in a short term loan fashion such as a BRRRR or wholetail), then refinance that second property pay off your HELOC. With this scenario, you get the best of both worlds - liquify your equity without incurring debt so you can leverage it for more investments and increase cash flow.

Partner with someone and exchange your time for equity in the deal. If you don’t have money, leverage your time.

Start knocking on doors of preforeclosures, make cold calls to distressed owners, send direct mail (can be costly), drive to find distressed property, etc.

Get a good deal, money will find you.

Pretty much anywhere in the South East is a solid bet. Especially NC, FL, TX, AL - good jobs and good laws for owners.

If you’re just doing single family homes, you almost have to TRY to lose money in buy and hold. Don’t overthink it.

Summary of my situation:

Wife and I live off just her income. Tithing, Investing, Saving comes from my income and after our tithing, 401k/IRA contributions, our W2s put about $2,000-$4000/month toward saving/investing. I'm in sales so commissions makes it fluctuate.

5 Single Family Homes:

• 2 Stabilized cash flowing, 1 owned free and clear

• 3 In middle of renovating for BRRRR using OPM. I'll end up leaving about 5-10% in each of these deals after I refinance/stabilize.

• Current Cash Flow is $1350, once 5 total stabilized I’ll be around $2,550 cash flow.

Cash: $35,000

• $10,000 - personal 3 months emergency

• $5,000/door

HELOC: $99,200

• Held In first Position at 4.75% on my rental owned free and clear. $0 drawn down.

Stocks: ~$15,000

My question is "am too liquid?" I'm using that HELOC as a way to come up with the 5-10% gaps at the BRRRR refinance and show lenders I have reserves. But I keep thinking about it more and more and realizing I'm nearly $150k liquid.

Would you invest more aggressively? If so, how? I’m 28 now, Goal is to “retire” from my W2 by the time I’m 30. 23 months to go!

@Blake Jennings Thanks for the post, I’m not only not great at Social Media, I actively hate it lol

But you’re 100% right, it’s an awesome tool to promote what you’re doing. To get started, I really don’t think you need a book. Here’s a few things to get started:

1) Start following people you look up to.

2) Like and comment on their posts. This gets you exposure. Don’t just post for the sake of posting. Ask a thoughtful question or answer someone else’s question in the thread.

3) Share what you’re doing. I struggled with this. I thought nobody would care what I’m doing or that I would come off as bragging. Turns out people love seeing what you’re doing and will DM you with questions.

4) Send DMs to people you think would be awesome to talk to. You never know who will respond!

5) Comment on BP everyday. I started a rule of making 2 forum contributions per day. It’s exploded my network.

Completely agree with @Blaine Alger.

Get a job in real estate, whether that’s an agent or something else. Think about your skills and what you want to do long term and start going down the route that makes sense.

If you want to be a great deal finder, get your license and start representing people as their agent. You can also start looking for off market deals as a wholesaler.

If you want to own your own property management company, start working for a local PM that’s got their ish together. This is your education, and you’re getting paid to learn.

Simultaneously, ditch the music and start listening to podcasts, read books, etc and learn more. You’ll be absorbing knowledge by doing RE in your job and by how others have gone before you and written it down in their books.

1. Join Groups on Facebook, tell everyone you're interested in getting into Real Estate
2. Start networking and setting up meetings with people. You'd be surprised at how giving the REI community is
3. Listen to podcasts and ditch music
4. Start reading books, lots of books. The BiggerPockets books are a good place to start, but branch out and look up other books on specific topics you're interested in
5. Education is the most important piece of this, but the best education is by doing. Get in the game as soon as you can, without being dumb. Dumb means you take on properties that have the potential to take you out of the game

Market is hot, this isn't anything new, it's probably going to keep going up. If you do a Cash Out Refi, put it in another investment, don't be the consumer that does a cash out refi or a heloc, increases their housing payment, then buys a boat or car with the additional payments for that. Peel off the equity, put it in another investment, then use the cash flow to increase your lifestyle... if you so choose. I'm in a growth stage so even cash flow just gets compounded back into investments and reserves. 

Just seems like one of the silliest things people can do is sell their house for a bigger one, but their income hasn't increased. I fully believe in the thought that your house is the biggest liability you have. It's a monthly payment that's locking up unusable equity. Sure its appreciating, but you can't do anything until you sell or refinance.

Sounds like you have a pretty sweet situation on your hands!

My biggest financial regret is not house hacking. Subsidizing your biggest expense to someone else is an amazing way to get yourself on the fast track to financial independence. Definitely get the house hack + BRRRR if possible.

Generally it’s one month rent. I’ve 1.5x rent, that way they if/when you go to court, there is a clear distinction between the rent and the security deposit.