All Forum Posts by: Ben S

Hi,

Just wanted to chime in and say that I love this topic - It seems to be one of the questions new investors like myself would come to bring up.

I'd be a little nervous myself to reject a tenant if they didn't appear to be responsible; so I always wondered how first-time investors would deal with being able to filter their tenants responsibly.

Myself, I'd have to learn not to be overly picky though and risk passing up someone who will become a long-term tenant!

Rich Weese - Forgot to mention - PM Sent for address - Thanks again!

Rich Weese - Thanks for the response - I love that I'm getting some good feedback from one of the pros on this forum! :)

1. My gut feeling was telling me to stick to the newer properties - even my wife told me that she'd prefer being able to own properties that looked nicer/newer (And this is coming from a non-investor type, but I value her opinion as my future involves having her work with my investments - so that's definitely a plus.)

2. Unfortunately - yes I've been paying roughly $3500 a year in taxes, leaving me with about $500-1k (give or take) as a 'refund'.. I read on your site and previous posts about your viewpoints on the gov't and taxes.. I have to agree with you there too. It'd be nice to get to the perspective of investing to avoid taxes. I'm just not there yet since I have to get the ball rolling on starting up the investments!

I took the hit on my small 401k and cashed out of it because I knew if I waited until later to do so that I'd be taxed on a much higher amount. So now I have this cash sitting in the bank at the disposal of the next property to invest (or move into, that is if I rent my townhome out). Given I could've rolled these small funds into an IRA, I just felt a little more comfortable to have this cushion in the bank at my disposal.

My current job though I've opted to stay with their company match @ 4% for the time being - free money imo!

Skipping to 5: I can see that too - based on the previous posts from other investors here, it's mentioned that unless you're really good at managing your properties up front, that cash flow gains can be potentially lost to repairs and maintenance on older houses.

Just to start out it just feels like it makes more sense to go with something newer..

6. Yeah doing more research from this site has opted me to avoid the HOA communities more and more and get into the SFR field.. and as a result I've developed a proper exit for my townhome in the event that I am prepared to sell it. It's in perfect rental-market material now, so I will take as much advantage of renting it out to get the experience (this is if I take the moving into a newer SFR route) and will eventually liquidate that into a better asset given 5-10 years from now, pending the market)..

Thanks again Rich for your advice and input - I consider your knowledge to be priceless as you're one of the living proof of success from scratch!

Rich Weese - Thanks for your input - I had the same thoughts because I want to take advantage of the low rates on multiple rentals in the future.

My goal is indeed to get out of the HOA type communities to favor the residential housing to better my investments..

To answer your questions:

1. Do you want to do more than one investment?
Yes - I plan to play monopoly in the sense of acquiring a decent number of rentals that I can eventually pay off, just like the typical buy/hold investor to live comfortably. Seems like putting more of my focus on the mid to higher end rentals would be much safer than investing in what's already 20-40 years old...

2. Is your job/income fairly safe? In this economy, I would like to say my job/income is safe. I have no other debt other than my mortgage of roughly $600 a month (which is a ton cheaper than rent in the area) - I'd eventually sell my townhome in the next 10-ish years or so - or when the market favors selling, so I can dump the capital into more SFRs...

3. Are you willing to take the risk and young enough if it fails?
I'm currently 27 and will turn 28 in the next few weeks myself - I feel like if I don't take advantage of higher risk now that I'll be kicking myself in the future for not being more risk-averse and thus improving my chances at wealth!

4. Do you have a long term strategy and plans?
Long-term strategy is very modest for today's timeframe of thought; wanting to self-manage about 10 or so F&C houses and live off a modest income (I'm very conservative and don't need much income to make a happy living) - although that's not to say my frame of thought will change as I continue to invest. But that's where I stand for now, I hope that's a good decision to say the least.

5. Do you NEED the cash flow to live on? To answer based off my conservative viewpoints, I do not currently need cashflow from real estate to live on - my current income is sustaining enough. I did question though on whether it's worth investing in the lesser properties that do have some cashflow now to better my chances of seeding future investments - but not sure on that since expenses may eat up that cashflow given those properties are older (as aforementioned 70-80k properties built in 1970's type, or cinderblock housing)... any thoughts for this one?

6. Don't buy another condo-imo. You're correct on that - I want to avoid the condos although 'technically' my townhome I own the land under it - but nontheless the townhome I'm living in now - they sell like hotcakes - last house that was on the market was only on the MLS for 4 days before being contracted - it's because the specific location I'm in is close (walking distance) to literally everything you need - but it's a bit quaint in size (1200sq ft - I'd like more space in the next home I move in, and more driveway space!)

Hi @David Beard - Sorry if my post wasn't clarified - The townhome was built in 2003, but I purchased in 2011 for that price, as townhomes in the area range from 85-100k for the same model/size as mine. :)

So far all the properties I intend to rent out would be properties I wouldn't mind living in myself - for the opportunity standpoint (gives me more options and keeps a type of 'standard of living' to match the tennant base I hope to acquire - less maintenance!)

Some good insight - I guess my general question would be on whether or not to invest in the more cashflowing, but older properties to start - or to go the higher end route of getting the nicer homes under my belt that may not cashflow as nice (but because these are newer, nicer homes they would require less maintenance than the older cashflowing homes, and tennant pool would be a little more desirable) - if that makes sense?

I could go both routes, but just to get the jump start on things I purchased my townhome with intent to rent later on, so my decision is just a matter of the type of SFR is best to start with.

I'd imagine refi on a newer, higher priced SFR (100-120k as opposed to 70-80k) would yield more cash to invest in more properties, and better appreciation forecast.

More input is highly valued - keep 'em coming! Thanks!!

I think I may have posted this response in a different category and didn't want it to get swept away, especially if it may be in the wrong thread! :)

As a newbie, I've finally obtained the funds to safely invest in my first buy & hold - So this month I've been doing nothing but debating over myself on two decisions - talk about feeling like a slacker compared to you veterans out there!

Just debating two directions, which I would aim to do by the end of the year (give or take depending on when a good deal happens in my area!):

1) Based off experiences with the type of SFR to invest; I'm thinking of moving my wife and I into a nicer suburb (housing ranges from 120k+, rents in the $1.2k-1.8k range) - but won't make the jump until I find something around 100-120k so I can rent it out in the future if I chose to move.

If I did this, I would rent out my current townhome (purchased for $75k & built in 2003, rents for about 950-1100 in very desirable location in Jacksonville)...

Option 2 would be based on trying to leverage more cashflow to help feed future investments:

2) stay in my townhome, and drop 25% on a SFR around the 70-80k range that would rent for around $800-1k a month, but the homes in these areas would be ones built in the 1970s concrete block style.

I feel like former option would best my investments for building wealth as I do not currently depend on real estate cash flow as a source of income.

On the other hand it feels like having a starter investment that yields more cashflow would help seed future investments.

Thoughts are always welcomed!

Hi Rich. Happy birthday from a newbie who enjoys reading your posts!!

Have fun in the Trump Tower - that's awesome!

Hello and welcome!

As a fellow newcomer myself - my suggestion is to stay planted on the computer and read more on these forums. The topics that come up in the 'Starting Out' section will help a lot. It's free and you don't need to spend gas money driving around the meet ups until you feel you are well-versed as to what these forums have to offer.

Just my USD $0.02

As a newbie, I've finally obtained the funds to safely invest in my first buy & hold - So this month I've been doing nothing but debating over myself on two decisions - talk about feeling like a slacker compared to you veterans out there!

Just debating two directions, which I would aim to do by the end of the year (give or take depending on when a good deal happens in my area!):

1) Based off experiences with the type of SFR to invest; I'm thinking of moving my wife and I into a nicer suburb (housing ranges from 120k+, rents in the $1.2k-1.8k range) - but won't make the jump until I find something around 100-120k so I can rent it out in the future if I chose to move.

If I did this, I would rent out my current townhome (purchased for $75k & built in 2003, rents for about 950-1100 in very desirable location in Jacksonville)...

Option 2 would be based on trying to leverage more cashflow to help feed future investments:

2) stay in my townhome, and drop 25% on a SFR around the 70-80k range that would rent for around $800-1k a month, but the homes in these areas would be ones built in the 1970s concrete block style.

I feel like former option would best my investments for building wealth as I do not currently depend on real estate cash flow as a source of income.

On the other hand it feels like having a starter investment that yields more cashflow would help seed future investments.

Thoughts are always welcomed!

Although I peruse the BP forums daily while at work, I felt obligated to be one of the first to respond to this thread in regards to attempting to be more active in posting on the forums.. as you can see from my posts I don't do so very often!

I'm currently in the market to snag my first investment (which I may just rent out my current townhome and move into a SFR capable of renting out later on - unless I refi my townhome and go from there.)

Anyways! I do enjoy your guys' posts, and learn a lot from them. Just a matter of time (perhaps by year-end) that I obtain my first rental SFR (unless I turn my primary residence into a rental, which is a townhome).

Anyone else care to join me from departing the sidelines and being a little more proactive? :)