All Forum Posts by: Tim Delaney

I think it depends on your personal situation and your goals. If you are not starting from a very strong financial position and you do not have the ability to quickly stockpile cash quickly from other means then I definitely agree with that statement from the book. One mistake or big unexpected expense could ruin you if you only have one or two rentals that are not cash flowing.

That said, especially in the current environment, if you are coming from a very strong financial position then there may be times where it may fit your goals to invest in a highly appreciating area with no or negative cash flow. That’s personally not my strategy because that is more speculative than I like, but I know there are people out there that can make a strong case for this.

It’s in the expense section. You enter it as a monthly expense. 

Just don’t fall into a trap of spending money unnecessarily to try to reduce taxes. I’ve seen this with small business owners that all the sudden end up in a cash crunch a few months into the next year.

What are you basing that 5% return on? Your initial cash in the deal? The total equity? Full market value? And what are you factoring as your return - free cash flow after all expenses? Annual appreciation? Loan paydown by tenants? Tax savings from depreciation?

Before you make any moves I would be sure you are fully analyzing the return you are getting.

As others have said, house hacking a multi unit is probably the safest way to grow your wealth overtime. If you want to be more aggressive though with much more risk you could consider a flip or BRRRR. Especially if you or someone you can work with has solid rehab experience. One other thing you could consider, if you have great sales skills and decent knowledge of your RE market, would be investing in some off market leads to try to wholesale - I personally don't love that option, but there are some people out there that have the right skill set for this.

You will probably be better off just doing them separately. I was working with a DSCR lender on comparing options on a seven property portfolio purchase a couple years ago and the difference between bundling them and doing them all separately was negligible.

 Sometimes lenders will allow their portfolio loans to be assumed as well, but usually not if they can get a better rate with a new loan.

Did they issue a refund that aunt hasn’t shown up on your card yet?

If you are using an FHA you should be able to use 70% of the potential rent from the other units in the building to count towards your income. If that is still not enough you may need to figure out a way to get rid of the car payment.

 That's up to your goals and long term strategy. I have both. I like the SFHs because they are easier to manage from the perspective that the tenants are in charge of snow removal and lawn maintenance. Many of them treat the home as their own and stay long term.

Multi's are nice because they generally produce more cash flow, but do require some extra attention.