How do I leavarge 950k index funds brokerage account for rentals/RE buys?
NJ · Member since 2019 · 57 posts · 19 votes
How do I leavarge 950k index funds brokerage account for rentals/RE buys?
Most Popular Reply
Travis TimmonsPro Member
Rental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votesI'll echo what @Nicholas L. said - VTSAX will likely outperform a first time real estate investor buying out of state. I've done it and had success, but it's hard and most people do not do as well as strangers on the internet make it seem.
You don't get cash flow from leveraged long term rentals in the current market. It just doesn't exist...even the cheap, on paper cash flow properties like will not make any money on end of year, after all expenses, actual returns.
The only real path to cash flow to live off of right now is either a paid off property or a well executed higher effort strategy like short term, mid term, or rent by the room. Even those don't provide much in the current market. Pretty much every STR market has normalized to an 8-15% return...it's a lot of hassle, expense, and risk for the incremental increase vs. VTSAX long term average. And MTR/rent by the room isn't really enough cash flow to make a serious income if that's what you are looking for.
I think that it's a "What can you do that is really hard?" market right now. Answer that question, and you have a strategy that could work. I still think house hacking is your best bet. Leverage + appreciation + time in a high appreciation market is and probably always has been the best investment in real estate. You just have to figure out how to stop the month to month bleeding in year 1-2-3.
Lastly, be careful with leverage against your investments. I think it's a Charlie Mungor quote that I remind myself of regularly - "Leverage is how smart people go broke." You have $1M. Be opportunistic and paranoid at the same time.
37 Replies
- 1yGreg ScottPro MemberRental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
What is your aversion to selling off some of the VTSAX and using it to invest in real estate? That is the easiest and simplest way to get going. If you are willing to buy out of state, you should only need to liquidate a small portion.
I'm not afraid of debt, and have tons of mortgage debt. Taking out a margin loan on a brokerage account is not what I would consider to be prudent debt, because in a down market, the brokerage can force you to liquidate at the worst possible time.
- NJ · Member since 2019 · 57 posts · 19 votes1yTo be honest right now, I don't wanna sell just because I rather hold onto it because with my current strategy. I'm seeing large games of course. Because the economy the mark has been doing well over the past few years. But I would like to diversify without sacrificing any of my holdings to purchase real estate. However, I do have a rough iray with enough capital for a downpayment with a Max purchase price for 50 considering dcsr loan 80% LTV
Quote from @Greg Scott:
What is your aversion to selling off some of the VTSAX and using it to invest in real estate? That is the easiest and simplest way to get going. If you are willing to buy out of state, you should only need to liquidate a small portion.
I'm not afraid of debt, and have tons of mortgage debt. Taking out a margin loan on a brokerage account is not what I would consider to be prudent debt, because in a down market, the brokerage can force you to liquidate at the worst possible time.
- 1yGreg ScottPro MemberRental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
Tough love. I'm not a fan of your strategy. Take some money out and do it right.
BTW, please don't focus on a $50K house. You will probably have bought in the worst part of town and your experience will be a nightmare.
- NJ · Member since 2019 · 57 posts · 19 votes1y
Quote from @Greg Scott:
Tough love. I'm not a fan of your strategy. Take some money out and do it right.
BTW, please don't focus on a $50K house. You will probably have bought in the worst part of town and your experience will be a nightmare.
Yeah sorry was using voice to text
the max PP I'm okay with starting is under 450k
2 units or a single with a ADU or a lot buy and build new construction maybe? But seems I gotta sell to get capital to start
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Greg Scott:
Tough love. I'm not a fan of your strategy. Take some money out and do it right.
BTW, please don't focus on a $50K house. You will probably have bought in the worst part of town and your experience will be a nightmare.
Greg i think some of the brokerage accounts will give loans against it at very low rates and they are not like a margin call ??? I have had some of my high net worth folks use those loans in the past..
- 1yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
why not start with a house hack?
it's going to be very tough to get good returns in the short term on standard LTRs. the market is just difficult.
- Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes1y
@Mario Gonzalez I started with house hack in PA, and told that story in Bigger Pockets Podcast #82. I bought a 3 br ranch house that was 17 years old at an auction from the state. I rented out 1 or 2 bedrooms largely to people who worked at the same place as me. Most of the time both extra bedrooms were rented and that covered my entire mortgage as well as 2/3 of the utilities. They were rented on verbal leases with no long term commitment, but there was always a demand for rooms. Some of the people stayed long term more than a couple of years.
Then the second property I bought was a 3 unit apartment building which also led to buying the 2 unit next door.
One other strategy you might use is to buy real estate within your Roth IRA or your Roth 401K and then all profit from rents and capital gains would be tax free.
- NJ · Member since 2019 · 57 posts · 19 votes1yHey love to hear that. Yeah I have around 100k plus in my roth ira right now and 525k in brokerage and rest in 401k
Quote from @David Krulac:
@Mario Gonzalez I started with house hack in PA, and told that story in Bigger Pockets Podcast #82. I bought a 3 br ranch house that was 17 years old at an auction from the state. I rented out 1 or 2 bedrooms largely to people who worked at the same place as me. Most of the time both extra bedrooms were rented and that covered my entire mortgage as well as 2/3 of the utilities. They were rented on verbal leases with no long term commitment, but there was always a demand for rooms. Some of the people stayed long term more than a couple of years.
Then the second property I bought was a 3 unit apartment building which also led to buying the 2 unit next door.
One other strategy you might use is to buy real estate within your Roth IRA or your Roth 401K and then all profit from rents and capital gains would be tax free.
I would be only comfortable selling max 200k to 250k for a down payment. Working with numbers now to see if it's worth it since it has to be a out of state rental - New to Real Estate · Los Angeles, CA · Member since 2023 · 83 posts · 64 votes1yMario you can self direct your IRA to buy rentals. My wife and I have use her IRA to invest in home flips, 10% return, however the profits have to go back into the IRA
Quote from @Mario Gonzalez:
Hey love to hear that. Yeah I have around 100k plus in my roth ira right now and 525k in brokerage and rest in 401kQuote from @David Krulac:
@Mario Gonzalez I started with house hack in PA, and told that story in Bigger Pockets Podcast #82. I bought a 3 br ranch house that was 17 years old at an auction from the state. I rented out 1 or 2 bedrooms largely to people who worked at the same place as me. Most of the time both extra bedrooms were rented and that covered my entire mortgage as well as 2/3 of the utilities. They were rented on verbal leases with no long term commitment, but there was always a demand for rooms. Some of the people stayed long term more than a couple of years.
Then the second property I bought was a 3 unit apartment building which also led to buying the 2 unit next door.
One other strategy you might use is to buy real estate within your Roth IRA or your Roth 401K and then all profit from rents and capital gains would be tax free.
I would be only comfortable selling max 200k to 250k for a down payment. Working with numbers now to see if it's worth it since it has to be a out of state rental - NJ · Member since 2019 · 57 posts · 19 votes1y
Quote from @Carlos Quiros:
Mario you can self direct your IRA to buy rentals. My wife and I have use her IRA to invest in home flips, 10% return, however the profits have to go back into the IRAQuote from @Mario Gonzalez:
Hey love to hear that. Yeah I have around 100k plus in my roth ira right now and 525k in brokerage and rest in 401kQuote from @David Krulac:
@Mario Gonzalez I started with house hack in PA, and told that story in Bigger Pockets Podcast #82. I bought a 3 br ranch house that was 17 years old at an auction from the state. I rented out 1 or 2 bedrooms largely to people who worked at the same place as me. Most of the time both extra bedrooms were rented and that covered my entire mortgage as well as 2/3 of the utilities. They were rented on verbal leases with no long term commitment, but there was always a demand for rooms. Some of the people stayed long term more than a couple of years.
Then the second property I bought was a 3 unit apartment building which also led to buying the 2 unit next door.
One other strategy you might use is to buy real estate within your Roth IRA or your Roth 401K and then all profit from rents and capital gains would be tax free.
I would be only comfortable selling max 200k to 250k for a down payment. Working with numbers now to see if it's worth it since it has to be a out of state rentalYeah comparing the expected returns vs vstax returns. To see what's worth it
- 1yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
just to chime in again and then i'll stop... selling off hundreds of thousands in stock to buy a random OOS rental that you would most likely just lose money on makes zero sense.
good luck
- NJ · Member since 2019 · 57 posts · 19 votes1yWhat should my strategy be if my main goal is cash flow?
Quote from @Nicholas L.:
just to chime in again and then i'll stop... selling off hundreds of thousands in stock to buy a random OOS rental that you would most likely just lose money on makes zero sense.
good luck
Should I buy a 2 fam and house hack but won't ever cash flow even moving out since I live in North jersey and property taxes are 13.5k and up.
Trying to see what's the best path forward
- 1yJeremy TaggartBusiness MemberReal Estate Agent · Pittsburgh, PA · Member since 2014 · 850 posts · 646 votes
Quote from @Mario Gonzalez:
I'm 32 years old, earning an $85K salary, and currently living at home. My net worth is $955K, with all but $3.5K invested in VTSAX across both retirement and non-retirement accounts. I'm close to reaching my $1M goal and maxing out my 401(k). Right now, I'm focused on increasing my emergency fund and cash reserves.
I'm exploring ways to leverage my index fund investments at Vanguard to acquire rental properties. My target is an 8–10% cash-on-cash return, and I'm considering marginal loans and DCR loans. Are there viable strategies for purchasing rental properties without having to liquidate my holdings
I hit 1mm one month ago at the highest of the market.
I don't mind staying the course I'm currently in. It's working however I do want some exposure to real estate. And that could mean a primary residence of a duplex house, hacking or even a rental property in the nearby state of Pennsylvania. I live in an expensive state, New Jersey, which I'm not sure if it's worth acquiring any properties in this state. would like to plan now to acquire in the future.
I'm always a huge fan of house hacking if you can find something that makes sense in your market the overall risk adjusted CoC ROI on a house hack is tough to beat. Almost $1M NW at age 32 puts you pretty far ahead of most as well so have to factor that in too.
I'm not sure what your long term net worth or cash flow goals are, but given your head start I would focus on higher quality areas/properties at lower leverage if you want to go the OOS REI route. I wouldn't mess with C class unless you were say trying to get out of your w2 job asap and were willing to be more involved with the properties.
If you want to use the money to put as a down payment into something, I would probably just sell the stocks. If you want to use the money to say do the BRRRR model then I think the loan route on the stocks could work since you would be paying that off in less than a year. I don't like the concept of borrowing against another asset to put into a long term investment. Makes the cash flow tougher as well when you essentially have two loans on the place.
I do like the idea of getting some exposure to RE though. I like to view RE as sort of a bond to help offset the ebbs and flows of the stock market for folks that have most of their wealth in stocks.
DHRE- The Jeremy Taggart Team590 Reviews - 1yKerlous TadresBusiness MemberRealtor · Columbus, OH · Member since 2023 · 1k+ posts · 1k+ votes
Quote from @Mario Gonzalez:
I'm 32 years old, earning an $85K salary, and currently living at home. My net worth is $955K, with all but $3.5K invested in VTSAX across both retirement and non-retirement accounts. I'm close to reaching my $1M goal and maxing out my 401(k). Right now, I'm focused on increasing my emergency fund and cash reserves.
I'm exploring ways to leverage my index fund investments at Vanguard to acquire rental properties. My target is an 8–10% cash-on-cash return, and I'm considering marginal loans and DCR loans. Are there viable strategies for purchasing rental properties without having to liquidate my holdings
I hit 1mm one month ago at the highest of the market.
I don't mind staying the course I'm currently in. It's working however I do want some exposure to real estate. And that could mean a primary residence of a duplex house, hacking or even a rental property in the nearby state of Pennsylvania. I live in an expensive state, New Jersey, which I'm not sure if it's worth acquiring any properties in this state. would like to plan now to acquire in the future.
Ohio could be a great option for you if you're looking to enter real estate without stretching your finances too thin. Compared to New Jersey and even parts of Pennsylvania, Ohio offers lower property prices, strong rental demand, and solid cash flow opportunities.
With your financial position, you could easily leverage DSCR loans or conventional financing to acquire rental properties without needing to sell off your Vanguard holdings. Cities like Columbus, Cleveland, and Cincinnati have strong job markets, growing populations, and affordable multi-family properties that can generate 8–10%+ cash-on-cash returns.
Since you're open to out-of-state investing, Ohio’s landlord-friendly laws and experienced property management companies make it easier to own rentals remotely. It could be a great way to start diversifying into real estate while keeping your long-term investment strategy intact. Have you looked into any specific Ohio markets yet?
Kerlous Tadres | Reafco Real Estate541 Reviews - Rental Property Investor · Philadelphia, PA · Member since 2021 · 780 posts · 504 votes1y
@Mario Gonzalez - If part of your requirements is to not to tap into your funds, are you able to take out a loan against the equity in your after tax portfolio? I know some other brokerage firms allow that, but not sure about Vanguard. If you're able to get a loan against your account then you can use the funds to make a purchase/down payment on real estate, but you should have a solid plan to increase value and secure long-term funding on the property afterwards in order to pay the loan back. The other consideration is whether you find a partner who is looking for an equity partner and you are on the loan with them because you have net worth for them to tap into. Obviously that requires you to network and find the right person as it involves you setting up a relationship with someone that you know and trust.
- 1ySam McCormackBusiness MemberReal Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 833 votes
Quote from @Mario Gonzalez:
I'm 32 years old, earning an $85K salary, and currently living at home. My net worth is $955K, with all but $3.5K invested in VTSAX across both retirement and non-retirement accounts. I'm close to reaching my $1M goal and maxing out my 401(k). Right now, I'm focused on increasing my emergency fund and cash reserves.
I'm exploring ways to leverage my index fund investments at Vanguard to acquire rental properties. My target is an 8–10% cash-on-cash return, and I'm considering marginal loans and DCR loans. Are there viable strategies for purchasing rental properties without having to liquidate my holdings
I hit 1mm one month ago at the highest of the market.
I don't mind staying the course I'm currently in. It's working however I do want some exposure to real estate. And that could mean a primary residence of a duplex house, hacking or even a rental property in the nearby state of Pennsylvania. I live in an expensive state, New Jersey, which I'm not sure if it's worth acquiring any properties in this state. would like to plan now to acquire in the future.
With cash flow being your focus, would love to see if I can help. It is a bit farther away, but if you are open minded to talking about REI in Greater Cincinnati, would love to talk about it. Shoot me a message if so!
Sam McCormack Realtor- NJ · Member since 2019 · 57 posts · 19 votes1yThanks but only sticking to PA or NJ
Quote from @Sam McCormack:
Quote from @Mario Gonzalez:
I'm 32 years old, earning an $85K salary, and currently living at home. My net worth is $955K, with all but $3.5K invested in VTSAX across both retirement and non-retirement accounts. I'm close to reaching my $1M goal and maxing out my 401(k). Right now, I'm focused on increasing my emergency fund and cash reserves.
I'm exploring ways to leverage my index fund investments at Vanguard to acquire rental properties. My target is an 8–10% cash-on-cash return, and I'm considering marginal loans and DCR loans. Are there viable strategies for purchasing rental properties without having to liquidate my holdings
I hit 1mm one month ago at the highest of the market.
I don't mind staying the course I'm currently in. It's working however I do want some exposure to real estate. And that could mean a primary residence of a duplex house, hacking or even a rental property in the nearby state of Pennsylvania. I live in an expensive state, New Jersey, which I'm not sure if it's worth acquiring any properties in this state. would like to plan now to acquire in the future.
With cash flow being your focus, would love to see if I can help. It is a bit farther away, but if you are open minded to talking about REI in Greater Cincinnati, would love to talk about it. Shoot me a message if so!
- 1ySam McCormackBusiness MemberReal Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 833 votes
Quote from @Mario Gonzalez:
Thanks but only sticking to PA or NJQuote from @Sam McCormack:
Quote from @Mario Gonzalez:
I'm 32 years old, earning an $85K salary, and currently living at home. My net worth is $955K, with all but $3.5K invested in VTSAX across both retirement and non-retirement accounts. I'm close to reaching my $1M goal and maxing out my 401(k). Right now, I'm focused on increasing my emergency fund and cash reserves.
I'm exploring ways to leverage my index fund investments at Vanguard to acquire rental properties. My target is an 8–10% cash-on-cash return, and I'm considering marginal loans and DCR loans. Are there viable strategies for purchasing rental properties without having to liquidate my holdings
I hit 1mm one month ago at the highest of the market.
I don't mind staying the course I'm currently in. It's working however I do want some exposure to real estate. And that could mean a primary residence of a duplex house, hacking or even a rental property in the nearby state of Pennsylvania. I live in an expensive state, New Jersey, which I'm not sure if it's worth acquiring any properties in this state. would like to plan now to acquire in the future.
With cash flow being your focus, would love to see if I can help. It is a bit farther away, but if you are open minded to talking about REI in Greater Cincinnati, would love to talk about it. Shoot me a message if so!
Got it, if that changes, you know where to find me!
Sam McCormack Realtor
- 401K loan
- Pay penalties and taxes (I've done this before)
- Pause contributions above employer match and save for RE
- If it's outside retirement accounts then sell and pay the LTCG. I know some folks that do this to lock in the gains. Especially if they're rebalancing or considering other investments
- 1yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
@Mario Gonzalez how much of a monthly house payment do you want to budget for?
Best idea is to buy a 1 or 2 family property to live in.
You could put as little as 3% down with an FHA mortgage.
Rent out rooms to roommates or try your hand at MTR or STR Guests for higher cashflow.
Logical Property Management4.9465 Reviews Why not keep saving in your 401k and Roth IRa, but take the savings you are currently putting in your brokerage and let it accumulate for a down payment. It might be a little slower than selling something. But you could use the time while you are saving to study and learn a ton.
You need to talk with your broker. What you are looking for is a pledged asset line of credit. Rates are relatively competitive you will likely be looking at 8-8.5%
Here’s the rub though, with 100% financing, you will likely being looking at negative cash flow in todays market. Potentially severely so. I think in a good deal in a good cash flow market you can cover your mortgage payment plus interest on your brokerage loan.
So you need to be prepared to cover repairs and turnover costs out of pocket as well as have cash to cover a margin call if your equities decline 10% or more.
I am not saying don’t do it as the rewards are potentially higher. Just realize there is significantly more risk associated with this path vs selling some of your equities
- 1yTravis TimmonsPro MemberRental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votes
I'll echo what @Nicholas L. said - VTSAX will likely outperform a first time real estate investor buying out of state. I've done it and had success, but it's hard and most people do not do as well as strangers on the internet make it seem.
You don't get cash flow from leveraged long term rentals in the current market. It just doesn't exist...even the cheap, on paper cash flow properties like will not make any money on end of year, after all expenses, actual returns.
The only real path to cash flow to live off of right now is either a paid off property or a well executed higher effort strategy like short term, mid term, or rent by the room. Even those don't provide much in the current market. Pretty much every STR market has normalized to an 8-15% return...it's a lot of hassle, expense, and risk for the incremental increase vs. VTSAX long term average. And MTR/rent by the room isn't really enough cash flow to make a serious income if that's what you are looking for.
I think that it's a "What can you do that is really hard?" market right now. Answer that question, and you have a strategy that could work. I still think house hacking is your best bet. Leverage + appreciation + time in a high appreciation market is and probably always has been the best investment in real estate. You just have to figure out how to stop the month to month bleeding in year 1-2-3.
Lastly, be careful with leverage against your investments. I think it's a Charlie Mungor quote that I remind myself of regularly - "Leverage is how smart people go broke." You have $1M. Be opportunistic and paranoid at the same time.
- NJ · Member since 2019 · 57 posts · 19 votes1yYes, I told you agree with you. Here I think how's hack is my best bet right now. However, I don't like New Jersey. Mortgage is because of how expensive it is and I don't see how cash flow in the future can work here. I could be wrong and I hope I'm wrong. Cuz I mayn't want to focus on cash flow. Appreciation to me is just icing on the cake. It's like speculation hoping for that I don't want to buy solid base off of that.
Quote from @Travis Timmons:
I'll echo what @Nicholas L. said - VTSAX will likely outperform a first time real estate investor buying out of state. I've done it and had success, but it's hard and most people do not do as well as strangers on the internet make it seem.
You don't get cash flow from leveraged long term rentals in the current market. It just doesn't exist...even the cheap, on paper cash flow properties like will not make any money on end of year, after all expenses, actual returns.
The only real path to cash flow to live off of right now is either a paid off property or a well executed higher effort strategy like short term, mid term, or rent by the room. Even those don't provide much in the current market. Pretty much every STR market has normalized to an 8-15% return...it's a lot of hassle, expense, and risk for the incremental increase vs. VTSAX long term average. And MTR/rent by the room isn't really enough cash flow to make a serious income if that's what you are looking for.
I think that it's a "What can you do that is really hard?" market right now. Answer that question, and you have a strategy that could work. I still think house hacking is your best bet. Leverage + appreciation + time in a high appreciation market is and probably always has been the best investment in real estate. You just have to figure out how to stop the month to month bleeding in year 1-2-3.
Lastly, be careful with leverage against your investments. I think it's a Charlie Mungor quote that I remind myself of regularly - "Leverage is how smart people go broke." You have $1M. Be opportunistic and paranoid at the same time.
- 1yJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
Quote from @Mario Gonzalez:
I'm 32 years old, earning an $85K salary, and currently living at home. My net worth is $955K, with all but $3.5K invested in VTSAX across both retirement and non-retirement accounts. I'm close to reaching my $1M goal and maxing out my 401(k). Right now, I'm focused on increasing my emergency fund and cash reserves.
I'm exploring ways to leverage my index fund investments at Vanguard to acquire rental properties. My target is an 8–10% cash-on-cash return, and I'm considering marginal loans and DCR loans. Are there viable strategies for purchasing rental properties without having to liquidate my holdings
I hit 1mm one month ago at the highest of the market.
I don't mind staying the course I'm currently in. It's working however I do want some exposure to real estate. And that could mean a primary residence of a duplex house, hacking or even a rental property in the nearby state of Pennsylvania. I live in an expensive state, New Jersey, which I'm not sure if it's worth acquiring any properties in this state. would like to plan now to acquire in the future.
Hi Mario, I would look into house hacking in a cheaper real estate market like Columbus Ohio which you can still find tons of positive cash flow (aka the 1% rule) and get a lot of appreciation potential. I moved from my hometown of Portland Oregon to Columbus Ohio and started off by house hacking myself - best decision I've ever made! If you do your house hack right, you can definitely live rent-free or have a very low cost of living!
Columbus is a super affordable real estate market where you can still find deals that hit the 1% rule anywhere from $120-180k purchase price. It's one of the hottest markets in the US right now with so much population growth, job growth, and companies moving/developing here (26B Intel headquarters being built here, 68K+ enrollment in Ohio State University, Amazon, FB, Google, Honda, Microsoft, LG, Nationwide, Anduril, etc.). Happy to connect and answer any questions you have.
Jimmy Lieu, Red 1 Realty4.9121 Reviews - Property Manager · Nashville TN · Member since 2021 · 12 posts · 6 votes1y
Mario, I personally would start with a house hack. I know there is a lot of confusion with the market right now... but I would not sell a large chunk for something you do not know.
I would start with self education first. (Michael Zuber with one rental at a time, Dion Mcneely, and coach Chad Carson are all great ones to help.)
I also think joining a mastermind can help you a ton at this point as well. You want to make sure you are in the right group, but it can be a powerful tool. I would be a lot further along had I joined the right mastermind. I am on my 3rd one and this one has been the most impactful. (Ryan and Cory with the Wealth Juice Podcast)
I would consider looking into any of these guys. They are experience investors and can help you bypass a lot of the learning curves if this is something you truly want to pursue.
There is a TON of free content from all of these guys so do not feel the need to pay for any courses unless you are wanting to actually pursue real estate and level up. If you want to know any of my experiences with real estate, I would love to chat. I can give you the breakdown of the past 5 years for my portfolio.
- NJ · Member since 2019 · 57 posts · 19 votes1y
Quote from @David Bull:
Mario, I personally would start with a house hack. I know there is a lot of confusion with the market right now... but I would not sell a large chunk for something you do not know.
I would start with self education first. (Michael Zuber with one rental at a time, Dion Mcneely, and coach Chad Carson are all great ones to help.)
I also think joining a mastermind can help you a ton at this point as well. You want to make sure you are in the right group, but it can be a powerful tool. I would be a lot further along had I joined the right mastermind. I am on my 3rd one and this one has been the most impactful. (Ryan and Cory with the Wealth Juice Podcast)
I would consider looking into any of these guys. They are experience investors and can help you bypass a lot of the learning curves if this is something you truly want to pursue.
There is a TON of free content from all of these guys so do not feel the need to pay for any courses unless you are wanting to actually pursue real estate and level up. If you want to know any of my experiences with real estate, I would love to chat. I can give you the breakdown of the past 5 years for my portfolio.
I read everything About real estate investing during to 18 to 22 and Put offers but got beat.
At this point I think my best option is just to build my cash. Reserves into house Hackett 2 unit. Which won't probably never cash flow with the current rates. Now. Until somwthing big happens.
yeah tell me your experience
- 1yShawn McenteerBusiness MemberRealtor · Boonton Township, NJ · Member since 2013 · 2k+ posts · 1k+ votes
Hi @Mario Gonzalez I will let you know cash flow is for sure achievable in New Jersey if you are open to looking at different strategies particularly those related to creative rentals. Numbers do not look the best but tend to be around break even for traditional LTR if done right. On the other hand my self along with multiple clients of mine are consistently cash flowing even todays market becuase we leverage creative strategies. Combine these strategies with house hacking and I am not kidding you, there are ways of living for free in your asset. I was in a property last week that easily next owner will leave for free in leveraging the property strategy.
House Hacking New Jersey563 Reviews - 1yRyan RomingerBusiness MemberReal Estate Broker · Indianapolis, IN · Member since 2018 · 340 posts · 144 votes
Congrats on hitting the $1M mark—that's an awesome accomplishment! Given your solid financial position, leveraging your investments to acquire rental properties without liquidating could be a smart move. You might want to consider using a margin loan or a home equity line of credit (HELOC) against your index fund holdings, but make sure you're comfortable with the risks and interest rates associated with these options.
As for real estate, New Jersey can be pricey, but house hacking or a duplex could still make sense depending on the area’s rental demand and your long-term goals. If you’re looking for more affordable options, exploring nearby states like Pennsylvania could offer better cash flow potential. Just make sure to research local markets thoroughly and connect with an agent familiar with those areas to maximize your return on investment. It sounds like you’re in a good position to make strategic moves when the time is right!
Intrigue Real Estate & Property Management4.6285 Reviews - Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes1y
I had a client buy a 14 unit in Rogers Park chicago for 1.6 million using his SBLOC it's like a HELOC on a brokerage account and has set rules for equity so don't need to worry about changes to parameters for a margin call, I would still be very conservative on the % of account you withdraw. This was back in 2019 and that building is now worth around 2.6 million so worked out well for him!
@Travis Timmons I don't believe this is true. Take my market for example north side Chicago. A 4 unit goes $800-1m that rents for $7500-8800 this is with class A tenants that run under 3% vacancy over time (you do need boost rents to market value after acquisition). At 25% down you are most definitely cashflowing positive, it won't be the crazy high 0% down returns of years ago but they cashflow a stable nice income that goes up each year. Most people self manage these as they are class A tenants, even doable for out of state owners with a leasing agent. I own a 4 there myself.
- 1yTravis TimmonsPro MemberRental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votes
@Henry Lazerow I agree that out of state investors need to focus on quality with class A-B tenants. That's the strategy that I have employed and a big reason why it has worked and makes self managing from a distance realistic.
What seems to be the norm, however, is wanting to buy an old $100k house that cash flows on paper in a questionable location. They buy a $80k property in Dayton that is going to appreciate well below the rate of inflation and attract a tough tenant pool rather than trying to house hack a $500-750k property in a high appreciation market that will double in value over the next 10-15 years - resulting in a $500k+ gain on a 25k-50k down payment...just can't get past year 1 "cash flow"
- Developer · New York City, NY · Member since 2015 · 812 posts · 718 votes1y
Quote from @Mario Gonzalez:
I'm 32 years old, earning an $85K salary, and currently living at home. My net worth is $955K, with all but $3.5K invested in VTSAX across both retirement and non-retirement accounts. I'm close to reaching my $1M goal and maxing out my 401(k). Right now, I'm focused on increasing my emergency fund and cash reserves.
I'm exploring ways to leverage my index fund investments at Vanguard to acquire rental properties. My target is an 8–10% cash-on-cash return, and I'm considering marginal loans and DCR loans. Are there viable strategies for purchasing rental properties without having to liquidate my holdings
I hit 1mm one month ago at the highest of the market.
I don't mind staying the course I'm currently in. It's working however I do want some exposure to real estate. And that could mean a primary residence of a duplex house, hacking or even a rental property in the nearby state of Pennsylvania. I live in an expensive state, New Jersey, which I'm not sure if it's worth acquiring any properties in this state. would like to plan now to acquire in the future.
Depending on your appetite for risk, you can play with margin. I will stress, this is risky and is not recommended; however, I've done it in the past. The key is to find a brokerage who has low margin rates. Interactive Brokers seems to be the lowest (https://www.interactivebrokers.com/en/trading/margin-rates.p...) You are looking at around 5.4% as the blended rate.
You can then make cash offers in certain markets and avoid a mortage. If you purchased a duplex in Columbus, OH for around $100k. You'd be looking at margin costs of around $5400.00 a year or $450 a month. You can then learn and get your feet wet without having to worry about the mortgage payment. Hire Jimbo the blue (https://www.biggerpockets.com/users/jameswise) to manage and earn your strips.
You should be able to borrow via margin 80% with IB, however, I'd caution you on margin calls. They are quick to sell positions to cover margin. The margin interest, check with your CPA, may be tax deductible as well.
- 1yMatthew CrivelliBusiness MemberLender · MA · Member since 2021 · 1k+ posts · 1k+ votes
**How to leverage 850k in index funds. I would hold tight and see how this shakes out with the tariffs. The market is taking a dive, if you take a loan against your portfolio if will only make it worse as you're now paying interest on top of falling stock prices.
Freedom Capital Funding, LLC523 Reviews- NJ · Member since 2019 · 57 posts · 19 votes1y896k now but I agree
Quote from @Matthew Crivelli:
**How to leverage 850k in index funds. I would hold tight and see how this shakes out with the tariffs. The market is taking a dive, if you take a loan against your portfolio if will only make it worse as you're now paying interest on top of falling stock prices.
- Property Manager · Nashville TN · Member since 2021 · 12 posts · 6 votes1y
I agree with @Matthew Crivelli on this one as well.
Funny running into you on here, @Matthew Crivelli. It has been awhile!
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