All Forum Posts by: Alain Perez-Majul

 Where did I say, "bypass the down payment"?

This is such an interesting conversation because it sort of relates to my other hobbies - Tabletop Board Games.

In some styles of games, you build an "engine" - something that generates a resource for you so that you can go and build your engine bigger so you can create even more resources. However, at some point in the game, in order to win, you have to stop focusing on your "engine" and start thinking about the game winning criteria - "victory points". However, other players or just the game itself can "attack" you and if you can't withstand the "attack", then you can lose your engine that you have worked so hard to build.

In the Real Estate Investing World:

Engine = Cash flowing rentals that allow you to generate capital and equity

Victory Points = Cash that can be used however you wish

Attack = Any expenses, whether seen or unforeseen

It's a bit of an oversimplification, but it helps me understand how I should function. I want be prepared for unforeseen expenses and circumstances so that I can mitigate risk, but I should do what I can do build my portfolio, so that when the day comes when I just want to use my cash, I can :)

It's all a balancing act.

You're using the BRRRR method...which sounds good, but has limits to it, and you really aren't using your equity when you refi. Your equity is still in the original property and is being used as collateral for the refi loan. If it was the same money, you wouldn't have to pay for it again. There's a better way.

 It's just a system...with a plan laid out with numbers with "$" in front of them that define criteria during the specific timeline in that plan.  Then you just execute specific strategies in specific micro markets that will deliver the number$ you require.

Simple.

There are no individual properties, just a series of them connected by this plan, where every decision you make is based on how the exit (your cash) from one property leads specifically to the entrance of the next...and so on. Each step (property/deal) you execute will most likely involve different markets and strategies, because the criteria from the plan's timeline will be different...an REI isn't a one size fits all system.

Keep your cash moving forward (verb), and only keep it locked up (equity) long enough for it to make "friends", and move forward again.  Each time it moves forward, it grows exponentially.  When it remains a "noun" (lazy money), it loses money for you, and will eat away at what you think you've already made.  I bet you thought "cash" was a noun.  If it becomes one, you lose.

@Bjorn Ahlblad age definitely plays a part in this. I, too, have acquired all the properties I want. And I own most of them outright. But they do keep me busy.

I wish more was written on this topic...best way to escape the hampster wheel after scaling up and owning all the RE you want to a more passive income.

@Joe Villeneuve

What if properties do not gain value over time? That happened in hot markets due to grown inventory. Add a bit of recession and have the rental pushed to lower, or vacancy growing...

Thats not just math.

Risk tolerance is key. And peace of mind has some value.

Personally I have 7 properties in The Woodlands, Tx area. All paid off. Now i am starting to put some leverage, starting by getting some mortgage on my own house. I wanna add 20% loan/80% cash. Will increase slowly. My goal is to have equity and in 15 years no debt, being able to have 25k/month of free cash flow and live well

Those numbers are based on actual properties...I didn't just pull them out of the air to make a point.  If the property cash flowed $50-100/month I would touch them.