All Forum Posts by: Brad Z.

I think everybdoy probably has a little different first deal story but I would recommend starting with a single family and managing it yourself. It may not seem like the most profitable deal in the world but you will learn alot and start to understand the business.

Once your comfortable with that, you can start to look into a little larger properties. I think managing 9 units with your first deal would be alot and if you hire out a PM, they may take advatnage of you if you dont know what things should truely cost.

I could be completely wrong and there may be others that disagree but start small, understand the business (its not all glamarous), build your model, then start to grow.

Why not just use the listing agent in these types of situations? Its going to give you the best chance of getting your offer accepted anyways. If you are wanting a great deal, chances are you are going to be writing a bunch of offers and that can wear an agent out. It may be a little more leg work on your end to keep using listing agents but they will be motived to get both sides of the commision.

Another factor that I like to look for beyond the statistics is re-development driven by the city or local government etc. Look for small things like roads being repaired, new street signs, well maintained common areas, etc.. Try to locate the meeting minutes form the local council and see what they are focusing on. I have even seen some small cities/townships buying and rehabbing single family houses to resell.

Thanks Bryan. I asked because I believe the borrowing provision increases from 50k to 100k if your spouse is on it. I have been researching these for a while but probably wont act on it for another 2-3 years but great info to have.

Its a powerful tool to defer paying taxes and their really is no reason not to do it if you can borrow it back for RE transactions.

I understand the concept of being able to borrow from your solo 401k and pay interest to your plan but are their other benefits from a tax shelter perspective? I am just starting my research on these product.

Also,
i saw that you can borrow 50k as an individual, or 100k as joint (with a spouse). Can you add your spouse to your solo 401k if they have another retirement plan with a current/active employer?

How about borrowing money from him at a typical interest rate that you guys do business at, then have the IR spike by 5% at 8 or 12 months. This will show him your serious about your ability to get in and out. Based on your initial post, I'm confused on if your intent is to keep them and rent or flip to another buyer?

Another option is to disclose other assets you could borrow against in a pinch to pay him off (ex. 401k)

Why not discuss the transaction with a local investor friendly bank? If you can show solid financial, they could potentially refinance the condos for you. You could even look at doing a blanket loan on all 3. You will need to keep in mind that you will likely need to have owned them a year to show a solid track record of rental income.

I refinish hardwood whenever possible. Don't forgot about the hidden costs of shoe mold/baseboard. Its usually very similar to pricing per sq ft when compared with carpet. If you are concerned with wear and tear provide a few large, neutral colored, area rugs for the tenants. They will appreciate it and it will save you some wear and tear.

It seems like retirement is defined differently by everybody that has replied. In my mind retirement means not doing much of anything and thats a long way away for me, not even thinking about it. My goals are built around being financially free of working for somebody else. I am probably close to that but I have set goals higher to ensure I can live and still grow my holdings. Its scary to think that all my profits are not going to pile up for my next purchase.

By the age of 30 (3.5 years from now) I want to be self employed and have NET rents of 10k a month. It looks like my net worth will be in the 1.5M range when I achieve this. I have achieved about 50% of these goals respectively as of now. I will have a good chunk of cash but not a boatload, maybe 100k plus another 150k in 401K. When I get closer to this mark, I will start putting more efforts into locating private investors and networking because conv financing may be out the window.

This may be a great time to read and learn as much as possible about RE investing. You could start to buy positive cash flow property to offset the loss you are currently carrying. It sounds like your local market is not good so managing or buying in another area can present challenges and complexities as well. I would recommend spending as much time learning as possible then make an educated decision on your situation.