All Forum Posts by: Zachary Dorff

@Noah Chappell hey that sounds like really smart advice thanks!

@Twana Rasoul No kidding, that is really interesting. Just looking and playing with the calculator on a multi-family on Realtor.com I can't imagine I'd get approved for that high of a Mortgage.  Can I reach out to you?

Thanks @Carlos Villalobos

Starting with the end in mind is good advice, it's got me thinking.  I appreciate it!

Thanks for the reply @Account Closed

That's some good stuff to think about. Ultimately I love the idea of REI replacing my W2. I'm not planning on it replacing my job in the near future but I'd like to think I can build towards that, so I definitely would like to be more active. I guess I'm not over eager to manage properties, I suppose the analyzing and trying to find a value buy excites me and I think that's a skill I can develop into a strength.

Hello all! I wanted to introduce myself and see if anyone had any insight if you were in my shoes what you might do.

My name is Zach Dorff and I live in North County San Diego.  I've been listening to BP pods for a few years but finally decided to get off the sidelines and take control of my future.  I read Brandon's Rental Property Investing and David's Long Distance Real Estate Investing and feel more confident and ready to start investing.

I've had a good, steady job for 7 years here now and I don't own my residence and have a company car which helps keep the bills down.  I've always tried living below my means (despite CA cost of living) and have saved around $100,000 between brokerage and personal savings.  I also could take a $50,000 loan from my 401k if I was in a pinch.  Although it would have been great if I'd gotten started years ago, I figure there's an advantage to having this much money liquid when starting.  I'm guessing ability to scale/buy a 2nd or 3rd rental quicker perhaps?

I got pre-approved for $200,000 in AZ and spoke to a realtor in Phoenix who started sending me SFR but nothing was close to meeting the 1% rule and when I ran them through the Rental Calculator most of them barely broke even.  So I started looking at cash-flow markets like Indiana and I'm liking what I'm seeing from that perspective.

In terms of my goals, I would really like to increase my cash flow. My W2 handles my bills with some leftover for savings, any cash flow I can create from RE Investing I'd plan on reinvesting in the next property. I am a little intimidated with the idea of forcing appreciation - Obviously the benefits sound great but as a new and out of state investor, my initial inclination is to buy something at market value with limited problems and somewhat rent ready and start cash flowing asap. I am single with no kids, so house hacking sounds great but not so much in San Diego. I have put in for an out of state transfer, but my family is near and I don't know if the job will be as flexible and able to commit time to RE in another area with another boss.

Think that about it sums up!  I thought that some people with experience would look at my situation maybe as a unique opportunity because of the job and financial position and maybe I'd get some good input or advice.  Any advice or input is appreciated!

I'm kind of in the same boat.  I do what's called Tail Hedging, you can google it but it's basically buying insurance against a big drop in the market.  I buy a Put option with the Strike Price 20% below the current price a few months out with 0.5% of my invested money.  If the market doesn't tank, you will lose the premium you paid like an insurance premium.  If the market gets hit hard, your option shoots up in value so it functions similar to insurance.  

Realistically, it's probably smart for both of us to just start selling a small percentage every week until you have the cash position you want at the time you expect to need it.