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All Forum Posts by: Thomas J. Clifford

Thomas J. Clifford has started 6 posts and replied 73 times.

Post: I Finally Made an Account!

Thomas J. CliffordPosted
  • Gainesville, FL
  • Posts 73
  • Votes 50

Welcome to the site! There is a TON of info on here and it might get a little overwhelming. I definitely recommend getting into the podcasts to start learning the terminology. That's where I'm at now and it has been a GREAT resource. Look forward to seeing you around the site!

Post: LEVERAGING TARGET: What should my downpayment be?

Thomas J. CliffordPosted
  • Gainesville, FL
  • Posts 73
  • Votes 50

All great advice. That note about the LTV is what I was thinking, and your tip is reassuring. The note about 25-30k in reserves was communicated poorly, as it was meant to include rehab of the property as well as reserves.

The remark that buying out full is just cashing in to "purchase" a higher cashflow value was helpful - It makes more sense in those terms, and losing the "debt paydown" aspect of money generation seems silly to miss out on.

Appreciate the help, team!

T.

Post: LEVERAGING TARGET: What should my downpayment be?

Thomas J. CliffordPosted
  • Gainesville, FL
  • Posts 73
  • Votes 50

I'm leaving the newbie RE investor phase of education and gearing up to look for my first purchase/purchases. I plan to do another 30 year refi on my primary residence and walk away with slightly smaller monthly payment, but using the cash-out of $168k as purchase capital.

I know there is a debate regarding buying an investment property in full vs buying properties with leverage, but I'm having trouble pinpointing a good place to work out pros/cons on which avenue to pursue.

A) What pros/cons do you know of to buying one property in full to obtain a higher monthly cash flow?
B) If I opt for buying more properties under conventional loans - would you recommend higher down-payments and fewer properties or go all out and snatch up as many deals as I can?

I'm leaning toward B unless there is something about A that I didn't consider, and I'm thinking of leaving about 25-30k for each leveraged property for repairs/reserves. Does that sound reasonable, or is that still too ? What recommendations do you have? Maybe not handle these purchases each at the same time, but stagger them out?

I appreciate any insights. Thanks in advance!

T.

Post: try to get spouse on board to invest in real estate

Thomas J. CliffordPosted
  • Gainesville, FL
  • Posts 73
  • Votes 50

I'm in the same boat @Jerry Guzman. This is a pretty big topic on the forum too, so take a look at some of the other threads that have mentioned it - The majority of the advice tends to to land in the area of: You can't be in a sprint if your spouse is at a crawl....Recommend some of the basic books out there like Millionaire Next Door or Rich Dad Poor Dad, and get her to read them. When she reads them, ask her to poke holes in the argument (This is the phase I'm in right now - super fun!) This is your chance to get the conversation started and show that you know more than the average investor (Assuming you are familiar with this lingo).

As far as that personal debt that you carry, you might need to draft a monthly budget, paying down those loans when you can. Maybe by demonstrating some command of the finances (not control, but more of an understanding of fiscal planning and budgeting) this will help set you up as being more driven that most of the folks who just talk about getting started.

Just some of my thoughts - gotta find what works for you.

T.

Post: Dropping out of High School.

Thomas J. CliffordPosted
  • Gainesville, FL
  • Posts 73
  • Votes 50

OMG dude, with a thread title like this you're about to have this entire online community dust off their keyboards and tell you exactly why this is not a good idea - and they're right! At 15/16 years old, 2 more years is over 10% of the lifespan that you've lived, SO OF COURSE IT FEELS LIKE FOREVER!

You're not wasting your time - you're doing what needs to be done, whether that's working in RE, for a GC, or becoming a firefighter. I work in public safety - THEY WILL NOT HIRE YOU WITHOUT A DIPLOMA. Period. The end.

Stay the course and finish school. Get some more life experience. Part of experiencing life is graduating high school - There are some folks who don't get that luxury- don't be the guy who willfully closes the doors of opportunity because he thought it was beneath him.

Alright, I'm done with my turn on this soap box - whose turn is it next?

When I was in college, our next door neighbor was a cop, and he was living there with a reduced rent and was the on-call law enforcement officer in case anything ever went down.

We the neighbors were all underage - He would come over off duty and grab some beers...He would also call us and let us know that "Party Patrol," was on its way, so we could tell everyone to clear out before the on duty units could arrive on scene. This might make it sound like he was a bad guy, but I think he was just trying to be an okay neighbor....He was kind of straddling that line of not doing what his agreement with the complex was asking him to do...

Jon Taffer of Bar Rescue always says that people get comfortable with a discount because they come to expect it, and then get pissed when it gets taken away. Is there something else that you might offer to a first responder or other public safety personnel that isnt a rent reduction that can still be a benefit? Just a thought.

T.

Great topic - I was reading that installing panels on the roof also reduces the amount of heat that the property absorbs through direct sunlight. This could be a great thing down in a coastal spot like Melbourne! Lower costs on electric, cooling, and offering a greener option all sound like great things to me!

That being said, I get the impression that this is one of those things that as an investor, the squeeze might not yield that much juice (electricity pun?) for you as the landlord...Maybe a nice benefit that you can use to raise the rent, but if a renter has a choice between two units that are equal in every way, but one is $150 more a month because of the solar panels, I bet they'll go for the less expensive property...They'll think they're comparing apples to apples, when in fact you're offering apple plus a little extra.....I know that in theory they'll save more on utilities, but it's a variable saving and it might not translate well when they are looking at rent only.

This also might have to raise your percentage when considering cap ex when trying to determine if its a good deal or not. Just another point to consider.

Still, I LOVE the idea, but I am a little bit of a hippie when it comes to the environment. Maybe try it on your primary residence, see what kind of savings you experience, and decide from there.

T.

Post: Is David Greene wrong?

Thomas J. CliffordPosted
  • Gainesville, FL
  • Posts 73
  • Votes 50

A newbie here, but my two cents spend like everyone else's, so here goes:

If that were true, the agent would own ALL of the properties. A decent deal that you have your eye on might not be the property type your RE agent likes or the area that a RE agent likes to work in. Or maybe they're over extended and don't have the capital to spend.

They might snag a deal that you like, but there are tons of properties available - and there are tons of agents available if the agent you're working with tries to steer you away from purchasing a property that they want for themselves (I actually think this might bite them in the butt, though, since they aren't working in their client's interest - word travels fast in the internet age). And if the property isn't available now doesn't mean it wont come up for sale soon.

If you find an agent who LIKES working with RE Investors who throw low-ball offers and put them through tons of work, I'm inclined to congratulate them for scoring something for themselves!

T.

@Jake S.: I have a traditional IRA that is tax deferred that I take annual distributions from. If I remove the entire amount, it'll take a pretty substantial hit, and has performed well enough over the last two years that it replenishes the required minimum distribution so I haven't concerned myself with it too much.

Hello BP!

I was listening to the podcast last night (Show 92 - No (and Low) Money Down Real Estate Investing with Brandon Turner), and in it Josh and Brandon discussed creating separate LLCs for each property partnership grouping that Brandon has with his partners like his wife, his father, and so on and so forth. I understand that this is so the numbers don't get muddied, tying up funds from one partnership up into another partnership. Makes total sense. I also recall them talking about setting up a completely separate checking/savings account for all transactions related to property investing so it is easier to track and keep your books.... I am considering a cashout refi on my home for capital to purchase an investment. Its a substantial amount that would get me a modest home bought outright to either fix/flip or BRRRR...

My questions is, as a newbie with no properties yet: What recommendations do you have regarding separating accounts? I can start accounts for checking/savings with this refi which seems pretty basic. What about a self-directed IRA? What might the pros/cons of that kind of account be? Are there other structures out there that are less common that might be beneficial?

Just looking for some thoughts/recommendations on how to best manage this.

Thanks all!

T.