All Forum Posts by: Blake Ramsey

Dani Z. Thanks, that is great advice. I could negotiate the 1% equity for say 4 years of management.

Brent Coombs you are right on this one and I agree it is low but my business partner is really pushing for the third option now. I guess sweetening the deal by raising the rate would be an option.

David Faulkner I like the way you are thinking. However, do you think I am better off using private lending at that rate or just waiting 3-4 months to go 50/50 on another house. Essentially, it's a 4 month loan at 6-8% then.

Seth Johnson That makes sense. What's the market like out there? Could you pool a couple thousand together with a friend, go FHA with 3.5% down (or find a veteran and put 0% down), and start sooner?

Brent Coombs hey Brent, thanks for the post. To clarify, it would not be 10k/year but 10k in total with no negotiated timeframe. So say over 10 years I would average 1k a year. You are right about appreciation but we plan on going 50/50 on a lot more properties so I'm trying to preserve time for those. My job is also pretty demanding and includes a lot of travel. We do all of the analysis together and lean on each other to come to the right decision. Since we are managing this business remotely, I'll admit we pay fair market value for move in ready single family homes. These house tend to attract high quality tenants which has kept management easier. I'm probably talking in circles but perhaps taking on that workload isn't too much. Especially if we got a property management software.

I like your plan! Would you consider building a multifamily to speed up your timeline?

Well I would say that college isn't for everyone. I have learned a ton listening to the BP podcasts. What I would say though is starting with that one property to live in and then renting it out is the fastest way to scale. We keep throwing 20% down on all the properties and it's so much capital. We plan to "house hack" moving forward as much as possible. At 21 your are thinking way ahead of everyone else. Just getting that first how will start the snowball effect. Have you taken the dive into real estate yet?

Hey Seth, Both of us work in tech. He is a project manager at Amazon who is super smart (went Wharton and is heading to HVB in the fall). I went to Rollins College which is a small liberal arts college majoring in Business. I chose business because I had no idea what I wanted to do in life but knew business was applicable to everything. Tech makes a lot of sense for a career because margins are high and every business is dependent on technology to survive. In B2B sales you get high margins (say 6%-10% commissions) plus a nice base which can easily be six figures.

Thanks for the responses! I guess that stands out as the best for me but I'm worried it might not be as fair? I want a long term relationship so is it worth forgoing some profits now to help a buddy and business partner?

To set the stage, my business partner and I sinvested 50/50 on 3 single family homes in Colorado Springs this year at the age of 25 (average purchase price of 230k-240k). He has recently purchased 2 more homes on his own but wants to keep me involved for management because our relationship has been great to this point. Now that he is branching out on his own, what is the best way for us to continue our partnership? We have discussed the following options: 1) calculate percentage ownership annually for the portfolio- somewhat complex to include time value of money and other factors but would allow us tremendous flexibility and partial ownership of each property. 2) 50/50 ownership of the fourth house which I pay back overtime at a 4% interest rate. All profits and expenses are retroactive to the date of purchase in exchange for my management help for further purchases. 3) 1% ownership of his separate portfolio in exchange for 50/50 management. I told him option 3 didn't make sense because let's say he bought 4 houses or ~$1 million in assets, I would only net ~10k with double our current workload and no predetermined timeframe. For all I know, this could be a 30 year commitment. Any thoughts on what would be fair for both of us? Further detail: We both have great jobs (~$200k each), live in cities outside of the state which means we greatly depend on our real estate agent and my parents who are local. We want to continue purchasing many more homes together with the ultimate goal of scaling to large multifamily. The reason he is buying at a faster rate is due to an inheritance and he starts business school in the fall which will make is harder to purchase. This will shift the purchases to my name for 2 years because I will have a job but he will still have inheritance to go 50/50 on purchases. I appreciate any guidance!