Hello from Socal - Some observations

[Abe Osman]

Hello All! 

Glad to have found this forum. Ive built my life based on things I've learned from the internet, and looking forward to the next chapter in RE. Ill give a little background and then I have some questions that have been on my mind. Any help would be appreciated! 

My wife and I have built multiple businesses together, we currently own a used car dealership here in the Los Angeles area and are doing well. Although the business is doing very well, I know that it is a matter of time until I burn out of the business as it is a 8 day a week type of job, but the returns are certainly nothing to complain about. Basically .. I see it as a means to an end, and that end is certainly in RE. 

We own 3 houses locally, we started just like many others here, buying, rehabbing, renting out and moving on to bigger and better. The 2 rentals have great tenants and our current home just finished a massive reno and we will be here a while. So the owner-occupied investment tactic has come to an end (for now). I have a good deal of experience with renovations, loans, use of hard money, access to MLS, knowledge of my local market, etc

That being said, I am excited to begin investing in RE but here are my challenges.. 

1) I am a HUGE believer in 15 year mortgages. A 30 year note basically has you paying for the house 1.75x and paying that kind of interest over the term just doesnt sit well with me. Our 2 investment properties are cash flow neutral AND on a 15 year note which no longer seems possible in todays market (they were bought in 2011 and 2013). The only way to be cash flow positive is to go 30 years and that just burns me up. Is that what you all are doing to be positive, 30 year terms? I see a lot of posts about being cash flow positive, but no details were given on the deal structure. For example, its easy to be CF+ if you are putting 50% down and doing 30 years, but that isnt always the best idea...

2) I read many many posts about some of you guys buying 12-15 (or more!) properties a year. How the heck do you come up with the down payments for all these? Even if they were an average of $100k each, at 20% down plus closing and reno, you're looking at $300k+ in cash outlay for that one year alone, and thats assuming the properties are 'only' 100k. Is there some secret magic I am missing or have yet to learn? Like I said, our other business does well, but not that well! I am assuming it is through the use of private capital or pooled funds but even solo investors are posting about buying 1 house a month and I not only see how that is difficult from a cash outlay perspective, but how does one get that many properties on a mortgage, by having a portfolio loan setup with a local CU? This is perhaps my most important lesson I have yet to learn. 

I have many other questions but this post is long enough, so I will end it here! Thanks again and looking forward to learning from you all. 

All the best!
Abe from Los Angeles