All Forum Posts by: Will Barnard

I believe you are on the right track choosing RE as the income producing and retirement plan vehicle, however, you are missing out on the power of leverage to start. This is not to say that All Cash is wrong, just to say that your plan does require you to eventually use debt financing for the second or third purchase. Since you are already planning that, why not start out with debt financing on the first as well.
This of course does not mean to over-leverage, but perhaps placing 50% down on two rather than 100% on one may equate to better returns.

As All Cash also pointed out, make sure to include all the other expenses to evaluate your cash flow and thus your ROI.

Another option would be to get a commercial property to start which can produce higher returns and monthly cash flow. I do recommend that you get educated first before jumping in. Sit down with a knowledgeable/reputable financial planner or CPA who has lots of experience in RE to create a plan that fits your risk tolerance/ current goals, and future goals.

Best of luck to you.

Not sure about CPA in Oakland, but I have been with my CPA for over 12 years and he is very well versed in RE investments. He purchases RE investments personally as well so he practices what he preaches. I would be happy to give you his contact info if you choose - email me directly.
He is in So Cal but with technology of today (phone/fax/email/etc), it should not be a problem.

Does it sound ethical to you? I hope not.
Regardless, it is fraud as Josh and Jon have both informed you and not only can the mortgage company call your loan due, they can also have you arrested for fraud.

When investing in RE, get investor loans, be honest, and do not buy if the numbers do not work without you cheating!

I agree with Mr. Watson. Not everybody lives in a location that allows you to invest in RE within a 60 mile radius. For many, that is impossible. What if you live in CA. Even if you pick up a REO of 60% of its value, you still can not get enough for the rent to pay all the expenses let alone have cash flow. You also can not flip it with confidence/low risk as there just are not enough buyers and lending for home buyers is tighter than a drum.
Investing out of state is currently, my only avenue, and is very profitable. Particularly when you build a quality team and area to focus on. Due your due diligence! It is not easy, but it is also not that difficult. It just takes effort, knowledge, and experience.

Good luck to you.

An excellent assessment!

All of my rentals or out of state and property managers are used on all but two of them. If you plan on duing multiple investments in the same area, I suggest you make the effort to interview several and get references. Usually, full service PM charge 8%-10% of collected monthly rents plus a one-time placement fee ranging from 25%-75% of 1st month's rent.
All of this is negotiable as are all the items in the PM agreement. When you have multiple properties in one area, always ask for the "investor's discount". I never pay more than 8%, and never pay for the PM to arrange for repirs/maintenance as that is part of their 8% monthly. Many of them try to stick you with additional expenses. You should never agree to them. The contract between you and the PM is the single most important aspect.

Also, make sure you include verbage in the contract that states you reserve the right to cancel the agreement with 30 days written notice. This allows you an out in the event that you are not satisfied with their services.

Many PM will argue that the contract theu use is the "standard" contract and was written by the best attorneys i the state. That may be true, but it was written on their behalf and not yours.

Get educated on contracts and how to protect yourself. Use an attorney if necessary. Remember a PM can make or brake your investment.

Getting back to the original question, one very beneficial strategy to quit the day job and avoid the credit/lending issue is to use partners. If you have the knowledge and expertise to locate, purchase, and manage properties, find someone with credit and no time or experience and have them get the loans for you. You can make them partners, or simply refi using commercial loans once the original loan is seasoned.
Keep in mind that combining several residential properties into one commercial loan can increase your interest rate and teh loan origination fees are generally higher, but if the numbers still work, then it is an alternative strategy for you.

Just food for thought.

Ryan, Michael, & Jason all make great points. Not only should you have reserves before quitting the 9-5 job, you should have them for each and every investment, (regardless if you work or do REI full time) so during an occurance of an unexpected large or even small expense, you have $ in reserves to fall back on, and not use your cash flow to pay for it.

This is a simple strategy to avoid over-extending oneself in REI. That is probably the most common reason for investors properties to be lost to foreclosure. If you have cash reserves or lines of credit, you will not be forced into a "must sell" situation or lose your cash flow to big ticket captial expenses or even vacancies.

I am not in disagreement with you at all as you stated. In fact, I personally would not spend 25k for additional education on my current investment strategies. All I was saying is that it is not right that so many here ridiculed the man's decision to do so.

As for being bias because I have education for sale, is also incorrect. It is irrelevant as I did not pitch a sale, only came to the defense of one persoan's choice/decision. As I just said, I am actually in agreement with several of you including Tim who stated that we are all tired of the gurus seminars and upselling strategies to milk the unsuspecting! So once again, I agree with you Michael, I just felt that the conversation in this thread became off-topic and was negative in respect to one persoan's decision to spend 25k on education.

As for the possibilities of paying less than 25k for education, it is very true. It does not mean that spending 25k is a poor decision on his part, it is simple his decision and not for us to say he is wrong. End of story.

Best of luck to all who choose to educate themselves rather than jumping in blind.

Michael,
I never attempted to hide the fact that I do have an educational product for sale on my website nor did I attempt to advertise that product in my last post, just to be clear. Regardless of either, what is your point, disclosure? $395 is not even in the same ballpark as 25k, and even if it was, my post was no sales pitch, only to get back to the original subject.

Too many posters here act as if their way is the only way, and if anyone does anything different, they are the recipients of negative slander and ridicule. If the man wants to spend 25k on his education, who is anyone here to tell him different. It is one thing to voice your opinion and give advice (when asked for), and another to act as the all knowing and "slam" others opinions and choices.

This forum can be a valuable source of insight and information, unfortunatley, there is too much back and forth "who's right and who's wrong" dialogue.

Can we please have a positive conversation about the original subject, not only in this thread, but all of them!!!!