All Forum Posts by: Brandt Smith

@J Scott Flipping and buy/hold are two different mindsets. With buy and hold your initial profit is lower but you get it month after month, year after year. Most importantly this income is passive so I get paid for minimal work. Flipping is great for a cash infusion, but it is a job. If I stop flipping I stop earning. Also, the risk in flipping is higher.

Some people want the quick cash. Some people want the long term cash flow. 

And some of us want both. We buy and hold for a few years then sell before the repairs hit, when we can 1031 our profits tax free.

@Thomas Clark real estate investing is pretty safe when done right but there are so many ways to mess it up if your don't know what you are doing. Not valuing the property right when buying, poor landlording, not maintaining your properties, over renovating, market crashes, over leveraging your properties, buying properties that don't have enough cashflow to cover a downturn, etc....All are risks that can be eliminated or mitigated but that takes education and experience.

@Troy Longtine lots of responses based on "pit bulls aren't a bad breed, the owners are the problem" mindset. That is great and probably true. Setting that aside, I won't allow pit bulls for these reasons:

• Insurance companies may not cover you.
• You can be sued if the animal attacks. It is harder to defend if it is considered a "dangerous" breed.
• Pit bull owner tend to be a problem. Some are great but a lot of people are drawn to pit bulls because they are such effective fighters / guard dogs, not because they are great loyal dogs. You don't want that type.
• You can't say yes to this tenant but no to another. That is setting yourself up to be discrimitory.

@Rich Hupper it basically means you want to go into a property with as little of your own money as possible. You significantly increase the return on your money with leverage. In other words, if you have $50k to invest, you can invest in one $50k property in cash, or ten $50k properties with $5k out of pocket. The ten properties will give you a much larger return on your $$$ invested.

As for risk, you are trading risk on your invested money for risk of default. Too much leverage sets you up to fail if the market crashes. 

@Marcel Pean 70% works great at $100k. At higher properties you need to use a lower %, and this is driven by your market.

@Gilbreth Seno I wouldn't unless it is a buy and hold MF. Loans are harder to get (need to be non-recourse). Added cost and redtape. Also, the LLC won't provide that much protection. You will already be protected by your insurance policy (you do have an insurance policy).

@Raeshelle C. you may have to take a step back and spend the next year building a war chest. Bird dog or wholesale deals to earn $$$ that you can then invest.

What about first time homebuyer loans / programs?

Also, if you have the credit to get the loans, a double close can sometimes be done with little or no money out of pocket. It requires the property to be deeply discounted (including repairs). While uncommon, these deals do exist.

You can also partner to provide the money.

@Jon Burns you have to keep yourself out of her personal life and the emotions. This is a business. If she can't pay, you need to evict. Be compassionate as you do it but move her out and put someone in who can pay.

@Michael` Cluer I haven't tried them. It isn't hard to manage a VR, and I can't justify paying 10%+ to a manager.

@James Maness too many variables to answer. What is your market? Class A,B,C,D? What submarket? How many bedrooms / baths per unit? Square footage of each unit?