All Forum Posts by: Tom Amon

Quote from @Katie Smith:

Hi Josiah! Is there a reason you're taking your investment property to a conventional loan? Wouldn't you prefer to put your investments in an LLC for further protection?

Aside from the protection, does that change any part of the cost of the loan? Are you saying that it would be a non-conventional loan by putting it through an LLC? If you could help me understand, I am in the process of figuring out the best way to structure all of this.

We have excellent credit and we have the cash. We are trying to understand the best way to structure the purchase of an investment property, get the lowest interest rate, and the lowest cost of the loan, due to the fact that we would put 25% down. We have close to 800 credit scores.

Quote from @Samuel Diouf:

Hey Tom, I would start with buying one property that's in a good neighborhood that won't have any expected up-coming big-ticket expenses. Properties like this will be the most passive and least stressful to own. 

Amen! I've had rental properties in the past, and I am well aware of the misnomer of passive income. Starting off by paying a little bit of a premium for updated furnaces, water heaters, kitchen appliances, and roofs relieves some of that stress. Thanks for the insight. Sincerely.

Hello all. New to the BP group. 

I'm reviewing rental calculations and cash-on-cash returns, and I have a question about a rental property in the Cleveland area. Looking at a prospective property with the assumption of a positive and conservative rental income potential compared to the property's cost, I am showing an 8% cash-on-cash return. (Appreciation not included) 

I see just under an 8% cash-on-cash return with a 25% down payment, and I am considering how the cash-on-cash return would look with a larger down payment of 50%, for example (showing a little over 8%). I have the cash, and my question is as follows: if the property is producing a very good cash-on-cash return, I think that continuing to have a cash-on-cash return with a higher down payment improves the returns on my money compared to keeping it in CDs or the stock market.

I am 62 years old and need to play a conservative investment game with the stock market, focusing on CDs and dividend stocks. I understand that I could buy additional properties and aim for an 8% to 10% cash-on-cash return with another property. However, it seems it would be much less work to have it all in one property where it is easier to manage.

I get the BRRRR method—rinse and repeat, etc.—but let's set that aside for now and look at buying one property with a 50% down payment with 8% returns versus two properties with 8% returns with 25% down on each property.