All Forum Posts by: Ali Boone

The good news is (or the bad news, depending on how you look at it) is you're far from the only one overwhelmed trying to get started. It's such a big thing and I talk to so many people in the exact same shoes that I'm now calling it The Overwhelm Epidemic. It's what it feels like it is. So, you're in good company! (again possibly bad news because it sucks it's such a thing)

As far as what niche to jump into and what to do... what are you ultimately wanting to accomplish with investing in something? And then after that, how much time/energy/resources/etc do you have to put towards an investment? Ranging from hands-off to full hands-on... that answer will help narrow down the best options. Let me know and I'm happy to give you my thoughts!

Not all properties, and not all markets, cash flow. Yes, those investors would be betting on appreciation. For cash flow-

Dallas' cash flow shrunk yearrrrs ago. If you bought there before 2014, give or take, you'd have gotten lots of cash flow and eventually some massive appreciation. But since the appreciation boom back in those days, there's little, if anything, left for cash flow there.

The other thing that very rarely cash flows is $600k properties, regardless of the market. Typical sweet spots for cash flow, depending on the market, would be more like $250k and below.

Back to the 'not all properties, and not all markets, cash flow' thing--you have to find a market and property price range that cash flows. They aren't everywhere! I'd venture out of Texas if I were you and head for the Midwest.

What kind of digital marketing do you do or offer? I'm always on the lookout for some help in that arena. Maybe we could trade digital marketing help for help with your first property! Depending on where you want to buy it and in what condition, I might have some contacts for you, and I can help with any general questions you have about doing it. At a minimum, things to look for, etc.

It's getting tight, that's for sure. The only one I know of... and this answer is limited by the fact that I don't work with or have relationships with all of the possible turnkey providers you could work with, so I'm only answering with ones I have direct current experience with... is the Illinois side of St. Louis and Baltimore. There's some others that do squeak by with some cash flow, but those two are the front-runners I know of. Both are hitting the 1% rule still and come with tenants and full rehabs. A lot of turnkey providers now are selling with the properties still vacant- the tenants get placed after closing at the investor's expense- and a lot aren't coming with 100% full rehab. CapEx and such are still done, but a lot are coming with some level of value-add ability to help with the numbers.

You have to invest for appreciation around here (I'm in LA, same situation). The appreciation can come in two forms: property value, and in the rents. Eventually rents should increase enough to start switching the cash flow dynamic, and hopefully you end up with enough equity in the property to warrant a solid return. But both of those are speculative, so you need to exercise caution in what you buy. Never mind you'll have to cover the negative cash flow for some numbers of years waiting on it, so be conservative there too.

The alternative a lot of SoCal folks do is invest out-of-state if they aren't comfortable banking on appreciation.

I love this post so much. It definitely is usually the zero to heroes that tend to voice up. Brandon is an exception to this, but so many of them have this air about them that feels like not only do they go on and on about how they got there, but they somehow look down on the people who can't also go zero to hero at some fast speed, which really isn't fair at all. Everyone's in different situations, and it's just flat-out not that easy. Even starting with a $100k is tough. Start with $1M? Now that's a different story. But how many of us are doing that? (not many, is my guess)

So, the place to start is by focusing on coming up with something that will be feasible from you. You can listen to all the other guys, but just pull anything from their experiences that might be useful for you. 5 years isn't a lot of time. If you can't come up with a 5-year plan, don't feel bad. I'd call that an overnight success and there aren't many of those in this industry. While you look around and come up with ideas that fit you, more actively be sure to think about smaller baby success steps. For some people, just getting that first rental property is a big step. If you only ever focus on FI, and especially FI in 5 years, you're likely going to stay so overwhelmed and discouraged that you don't actually start on anything.

No question, the thing that's going to bring every single person the most success that it can is going to be the thing that's best suited for them. The thing you're best at, most natural at, derive some amount of joy from (or grace, at least, maybe not full-on joy), and feel drawn towards... that's what's going to bring you the most success. And that answer is different for everyone, and it's not always an answer that makes sense on paper.

I realize I'm giving what probably sounds like a hippity dippity world peace kind of answer, and it's certainly not a technical answer or anything about next steps, but I assume most everyone else will respond with that stuff and I can be different and throw in an injection of mindset. Hopefully it's at least a little helpful!

You aren't going to get something positive cash flow here unless she puts enough down to make it positive, which will take a lot. Even inland you're going to be in the hole (just not as much as on the west side).

The only way I can think of to make it work is if she switches into a long-term asset mentality and can take on the negative cash flow for a while waiting on rents to go up and appreciation to kick in (as well as inflation benefits, etc.). The only other way would be to find a total shacker and rehab it, but not sure that's necessarily of interest either, and even that may not pencil out well.

I would always get a property inspected, no question. Without doing that, you can't know if there's any looming unforeseen expenses that will be hitting you in the forehead (i.e. wallet) and killing your returns.

My short answer, and since I do rental properties-- a property that's located in an area that will only attract low-quality tenants. Tenants have been my absolute biggest headache over the years (well, in my case indirectly behind bad property managers), and cost me the most. I'm very much in the camp now of taking a little hit on cash flow to invest in a property that will attract better tenants. I didn't get into investing to increase my number of headaches.

It's definitely not known that the housing markets are going to collapse. Recession, probably, but recession and housing markets collapsing don't actually go together... 2008-2009 was an exception. In the other 4 major recessions, housing prices/values went up, not down.

What's your plan for that balloon payment? Do you have the cash to cover it? Seems like grabbing that $150k would be perfect to pay that off so you don't have to stress about the balloon, which is right around the corner, and then reset. Then you can pull a normal refi out on the B class, what you paid it off with, and use that money to invest in other properties you feel better about than those Cs.