All Forum Posts by: Tucker Cummings

I'm not far into it, but I came from a poor family. Parents were divorced, Mom was a teacher making 22k/year, raising 2 kids as the primary parent. Dad was starting his own business, which only took off and boomed after I got out of college (funny how that works right?). Prior to that time, he didn't make too much either. 

I couldn't do the things other kids did, play the sports other kids did, go on vacation, etc. because we didn't have the money. But I had a very math and finance oriented mind from a young age. One day it hit me, I think I was in middle school, when I realized "Every dollar I save makes me a dollar more rich for the rest of my life." Of course that's evolved into every dollar invested.

At this point, I'm 27 years old, coming up on cracking the $1M net worth mark made up of cash, 3 houses (primary + 2 investments), growing stock and retirement accounts, and more. I'm not nearly as big as many of the other people here, but maybe that makes me a bit more relatable here. 

I just started my RE journey in December 2019, and my goal is that by the end of 2021, I'll have cracked that $1M threshold.

Unpopular Opinion: But paying all cash can serve as a huge opportunity for an alternative type of BRRRR.

Here's what I did on a recent property - I purchased all cash for 77k, put 8k of work into it, 1.5k in closing costs. So I'm all in at 86.5k. I did all this in cash, nothing borrowed, so it gave me the opportunity to put a HELOC on it. It appraised for 124k, and I could get an 80% Credit Line to Value at 4.75% interest, which got me to 99.2k ready to use at anytime. So not only do I recoup all my initial funds, plus 12.5k BUT when I'm not using it, it's a cash flow BEAST. And finally, I always still have the option to do a traditional 30 year mortgage later down the line. 

The alternative could've been putting 20% down on properties, but then I wouldn't have enough equity to recycle the money in a BRRRR-ish type deal. Another alternative is a traditional BRRRR, but I don't see the point in obligating myself to a 30 year mortgage if I don't have to, since my initial funds weren't borrowed.

In my opinion, the purpose of a BRRRR strategy is to recoup your funds. 9.5/10, its advertised as a traditional refinance. But putting a HELOC on the property might be a powerful alternative to help recoup funds while maintaining cash flow.
 

I’ve got a few cash reserve places. I keep 10k (3 months expenses) in a personal savings account at Ally. I have a separate real estate savings (just to keep personal and RE funds separate) that I keep 5k per property in cash, also at Ally. I only have 2 doors so it’s 10k.

Everything above that goes into the stock market. If you buy your stocks the way you buy you’re real estate, meaning you buy good deals (such as when the 10 day moving average bounces off or breaks below a 50 or 180 day moving average, but it’s still a good company with a great balance sheet), then you’ll realize better and quicker gains in the market.

Make your money you buy.

@Sean T. That’s very informative, thank you for the very clear and concise answer.

For margin accounts, when you borrow as a line of credit, I assume that means the funds invested stay in the account and stay invested, correct?

So let’s say I have 100k in the stock market. I borrow 50k on margin. I would still have 100k in the market. Am I hearing that correctly?

All things considered, it sounds like these would/should be short term deal funding sources used sparingly, and probably not borrow the full 50% allowable to give yourself cushion.

I'm looking into different ways to fund deals and am curious about using my 401k, IRA, and/or stock accounts on margin to help fund my deals.

I’m looking for answers to questions like:

• How much can I borrow?

• Am I removing the investments from the market as a funding source, or is it like a line of credit where the cash stays in my investments, but I am borrowing against them?

• When I Pay the interest, am I paying myself or the brokerage the interest? Is it different for the 401k, IRA or margin account?

Would love to talk to someone with experience in this arena! Thank you!

I’m looking for seller financing and lease option contracts for getting more deals done. Anybody know where I could find those or does anybody have simple contracts that I can use?

I’m in NC and I am doing direct to seller marketing if that makes a difference. Thanks BP community!

With as many wholesalers that there are out there, is it worth it for me to start doing direct to seller marketing and internet marketing?

I don’t have any intentions of doing full time wholesaling, but I see the benefit of having a flow of deals that either I take down myself or assign if it came to it. I guess the dilemma I’m seeing is “am I just going to sink a ton of marketing dollars to do the marketing/work that someone else is already doing?”

Anybody else running into this dilemma? Just trying to bounce ideas before I pull the trigger.

Just got done listening to the latest BP episode, which discussed buying bigger commercial assets. This is something I'd really like to get into, as I'm quickly realizing buying dozens of single family homes is going to be long and intensive. 

Are there any recommendations for resources on how I can learn more about commercial assets, multifamily residential, etc. Also, any tips on how I can meet other experienced investors that might be interested in partnering? Being new to that class, it would be great to do this alongside someone with experience.

Thanks for the help BP Community!

In the heart of Halloween, does anybody have any good "haunted house" stories they've picked up over the years from their real estate?

Renters saying the house is haunted, picking up probates with "whispers" in the halls, etc. Anything out there?

P.S. Let's not get into the debate of believing if ghosts and ghouls are real or not. Just some light hearted fun.

@Bud Gaffney my thoughts exactly on why investment properties are considered 'higher risk' so they require more down payment and higher interest rates. So the bank is telling me that my income, plus all the income from my other properties, plus the income from the subject property all make it higher risk? Doesn't make any sense