All Forum Posts by: Ben Firstenberg

Glad I could help! I'm sure you'll be back at it soon

I almost never say this but I would sell. You said you don't like the neighborhood and cash is a little tight. This doesn't sound like an asset worth betting on. Take your money, weather the storm and move on to the next one. 

Warren Buffett loves saying "if you wouldn't hold for 10 years, you shouldn't hold for 10 minutes". I think that applies

Love what you're doing and think it's a great strategy. 

I'll just add one thing for you to consider. You can live the life you want without paying down all of the debt. If you want to make the investments safer, maybe pay down the loans and then refinance at lower leverage (like maybe 50% LTV). That way you can still leverage your money (which is part of what makes real estate so profitable) but you likely won't be in danger of foreclosure or default. Your payments will be a lot lower, which will juice your cash flow even more.

Debt is only bad if it's for depreciating, non income generating or lifestyle purposes. Debt used for income generating assets is (typically) quite smart!

Cleveland is my hometown and I love it dearly. I hope this jump starts East Cleveland. 

I think the area has a long way to go though. One building is definitely a great start, but it's not going to turn around a part of the city that has high crime and broken down houses in many places. 

I'd pay off the debt first if you can. Student loans and credit card debt are the worst. They'll just keep dragging you down if you let them. 

In your position, it seems like house hacking would be the best play. Reducing or eliminating your monthly rental payment would be huge. Then you can start saving up a lot faster to do your next deals, which could definitely be a BRRRR if that's what appeals to you.

As far as your girlfriend... how would she feel about living with you in a basement in law suite? Or in one unit of a duplex/triplex/quadplex? Done right, you will hardly ever see the other people at the property!

Hey Mike, sounds like you're getting a lot of answers but I'll throw in my two cents, as I've thought about this a lot. 

People sometimes ask me similar questions. My dad actually asked me this a couple months ago. 

I advise people to first think about what it is you WANT and how much effort you're willing to put in to it. 

If your goal is to just get some steady income, you could maybe work with a partner or make some private loans. Or you could invest in a midwestern market where the cap rates are higher. 

If you feel good about your other sources of income and you want to use this money to build wealth, you could invest in some high growth markets (places like Denver, Atlanta, Salt Lake City...)

Or maybe you just want a project that gives you something fun to work on? In which case a flip could be more your speed. 

It all starts with what you want

It depends on what your goal is. 

Do you LIKE working in accounting? Do you want to keep doing it for the near term future? Or do you prefer real estate?

Forgive me if I'm reaching here, but it sounds to me like you're at a sort of crossroads. Once you've completed a 4 year college degree, you've gotten pretty good at following the "system" so to speak. It's been ingrained in you. It sounds like it's calling you to recommit to following it. And there's NOTHING wrong with that. 

On the other hand, you could walk away from the system and pursue the entrepreneurial career that's calling to you. The security and stability of the "system" doesn't exist here, but it's obviously quite rewarding if you're successful. 

Maybe you're not quite ready to take the leap, but you know you do want to. So you stick it out with accounting for a bit while you're learning real estate. Or maybe you find your niche as a real estate CPA (I see people on here looking for CPAs all the time).

I think you have a lot of good choices. From my perspective the only bad choice is doing work you don't really like. 

Hope that helps. I had to make a sort of similar decision myself so maybe I'm projecting a little

I heard once about a guy whose business was to broker hard money loans to flippers. He had connections to a bunch of HNW individuals who would provide the funds and flippers who would provide the deals. He would lend at 15% interest per year, keep 4% as his fee and give 11% returns to the investors. 

Hey Doug,

I'm working with a few clients right now who are interested in a similar strategy. We've found the traditional "live in one half and rent out the other" is a little bit more difficult to accomplish these days but we've had luck pivoting to buying a single family home with an in law suite with separate access. This accomplishes the same thing, but it leaves more of the house available to lease so you can get higher rents and better cash flow. 

Hope that helps. Feel free to reach out if I can help! (Contact info in bio)

I can't answer all of these questions, but I can answer some. 

First, it is possible to form a Delaware/Wyoming LLC and buy outside of those states, people do it all the time. I don't know the exact requirements, but I think you just have to know a lawyer in one of those states.

Second, I believe you don't have to be a citizen to open a bank account, but you might have to be a US resident. You definitely have to be a resident if you're looking to put down just 3.5%, as those loans (FHA loans, they're called) will require you to live at the property for at least a year.

Third, as far as best strategy to start with it depends a little bit on what your goals are and what assets you have. If you have decent cash on hand ($50k+), buying distressed properties and renovating or doing BRRRR them could be really great. If you don't have much money, putting down 3.5%, living in the property and renting out extra rooms or extra units would be a better strategy to get started.

Hope this helps! Please check me on all of this as I'm no expert and don't want to cause any problems for you. Best of luck!