All Forum Posts by: Carl C.

You are correct that paying off your mortgage early will increase your cashflow. Realistically, long term, you'll probably find that you will make more by holding for a certain period, increasing your income while decreasing your expenses, then selling and reinvesting your proceeds into larger properties. If you plan to just sit and accumulate properties, then by all means, your theory is correct. The plan will limit your opportunities in the future though. Don't feel that you need to just stick with one idea. Your investing career will likely evolve as you learn and grow giving you more options to get to 10k per month. 

The best way to start.... is to start. I work a full time W2 and have run our real estate business after work and on weekends for the last 7 years. Its a lot of work. It is a major time suck. There is very little down time or fun time. It's the reality of the business, especially when you are starting out. We couldn't afford to quit our jobs when we started but we made it a priority to focus on getting the business going. We are now in a position to think about focusing full time on the business in the next two years. Manage your finances to save up for a down payment, then set aside some time to start researching and analyzing deals in your target area. If nothing else start looking at properties on Realtor.com and figure out what your expenses would be and then look at what your rental income should be. Learn the process. At some point you'll find a deal that works within your budget. You will probably be surprised how quickly it comes together when you just start taking steps in the right direction. 

Demo it and start new. This will never look good. 

Your biggest hurdle will be zoning. Many college towns have rules about how many unrelated people can live in one house. I think you'll spend quite a bit on construction and it will end up being a weird house that could be difficult to sell in the long run. Do you rent to college students now? How well do you know the market? Lots to consider here. 

You need to look at what makes the most financial sense. SFR can work well but often times you'll get better cashflow and appreciation with a small multi. One is not necessarily better than the other. It's all about the dollars.

@Joe Villeneuve has the answer on scaling here. Put together a financial model and see what happens when you account for cashflow and appreciation over several years on the properties you own, then sell and use the proceeds to buy something(s) significantly larger. Hold on to that for a few years, make some improvements to a property and do it again. That will speed up scaling rather than just waiting for your ability to save up multiple down payments.

Our first MF was relatively local for us. We went for a value added deal solely because it was a killer location. I don't think I'd personally get into a long distance rehab project. I work in the construction management field for my W2 and I have seen how difficult managing projects can be from a distance. You better really know your contractor or get lucky. 

This is interesting. We were unexpectedly slammed with requests this year for student housing because no one wants to live in dorms this year. This is after we reduced rents because we were worried about finding renters.... 

I'm sure many will disagree with me but for us, we always put down the max that we are comfortable with for down payments. If you can avoid PMI, that's always a good idea. Additionally, pulling money out of a 401k for us is never acceptable. Investing should not risk your future retirement, it should help it.

If your LLC has no track record then you will need to show proof of income for a bank to approve you for a loan. You'll have more flexibility once your LLC has some financial history.