All Forum Posts by: Chance Cooper

So I have been at this rental property thing for a while and my plan has changed on a few occasions based on my life with the Military and family things that were going on. When I first started I always wanted to have 1 home paid for free and clear.

I always felt that was my fall back plan in case I somehow lost everything lol. I grew up in a foster home as a kid so I have always had that lingering around in my head..I don't plan on losing it all, but that was my reserve parachute. Here is my current situation:

House 1 paid for: Rents for $975

House 2 Mortgage of 65k: Cash Flows $475

House 3 Mortgage 152k: Cash Flows $305

Child Care Facility Mortgage 352k: Cash Flows $1200 (My wife and I bought this. She runs the facility and pays my Rental Company $1,200 a month because of the money we laid down for it.)

In addition, I add $1,500 of my own money to the pot every month, which is a grand total of $4,455 a month in cash flow every month. I have about $17k on-hand for reserves. 

I don't know if I should take that $4,455 and save up for house #4 or pay down mortgages. I would start with House #2 and just pay down the 65K if I did start paying down mortgages.

I will retire out of the Army in 7 years. My ultimate goal is to cash flow 10k a month between my rental properties and my Military retirement. I figure I can live comfortably off of 120k a year.

What are your thoughts BP?

Chance

I want to buy about 20 acres of raw land to build on one day. Do any of you know any banks that do this?

We recently sold a commercial piece of land that was not making any money. We sold it and now have a large amount of cash on hand $127k. My current portfolio looks like this:

House 1: Cash Flow $475.00    Current Mortgage owed 67k

House 2: Cash Flow $440.00    Current Mortgage owed 57k

House 3: Cash Flow $330.00    Current Mortgage owed 158k

These were my courses of action COA that I came up with:

COA 1: Pay off house number 2 and increase my cash flow, to $825.00 and would also be debt free on that house. That would leave me with $70,000 cash on hand to either buy another rental, or just keep as reserves.

COA 2: Pay off house number 2 and 3, increase my cash flow to $1700 between both houses. Both houses would be completely paid off, Id sleep well at night. This COA leaves me with only $3,000 in the bank though...

COA 3: Don't pay anything off and just keep saving my money, which I have $127k on hand. Everything would be leveraged. Possibly buy another property when the right time comes up.

Any thoughts would be great.

Chance

@Ericka G. I really don't think there is a right or wrong way to this scenario...I think there is a "Your" way of doing things, and that's the right answer....There will be 50 different people with 50 different ways to skin this cat...but in my humbled opinion...

I would stick with your bread and butter that has gotten you to this point...That formula has not failed you yet... Once your portfolio is really, really high off the ground then go out there and try something you haven't in the past. My investment strategy is just like yours and I have been doing really well so far. Plus, there is no way I would take on a 4 plex (4 more headaches, 4 more different types of people, 4 more phone calls throughout the week) for an extra $375 net income...That juice is just not worth the squeeze, not to mention you have to deal with the bank as well because you don't actually own it...Its in your name...Its yours when you pay it off...

Lay down that cash and own the SFR outright...Plus you will still pocket 20k after you lay down the 50k...

That's what I am doing, once I get about 5 paid for Ill start dabbling in other stuff.

Just wanted some advice from  you guys/gals...I am currently at a point in my rental portfolio where I am not sure what my next move should be. I honestly can't believe that in only 4 short years I am on my 4th property, actually 5 but the 5th is a piece of commercial land that I one day hope to build on...

Currently I have 4 properties and all 4 properties currently have a 6 month reserve fund (Mortgage x 6 months). I have tenants in all the homes and no issues...It took me a little while to evenly disperse my reserves but I got it now. I also have about 4 months of reserves in my savings account for my personal residence/lifestyle...I feel like I am in pretty good shape right now, so what is the next step? Do I just let the cash build up until I get enough money for another down payment on another investment home? Or empty out my personal savings to grab another rental property...???

I have to admit I am kind of out of my comfort zone so any advice would be great. I am in the Military and move around quite a bit, so I think my next step is hiring a property manager so that I can focus on "Working on my company, not in my company" anymore...I think my job now is to grow it. I don't want to lose momentum, I would love to continue my pace.

Any of your thoughts would be great.

Chance

I just looked at both of my neighbors tax payments and they pay roughly $200 a year. I am paying $1200 a year!

When you convert your primary home to a rental property, are the taxes supposed to double? I was paying like 500 a year, now its 1200 a year.

Does this sound right?

If you had a rental house that was free and clear would you refinance it to help you build a child care facility on another piece of property that you own free and clear? The childcare facility would be ran by my wife, she has been in it for sometime now....

The house appraises for about 110k and I could possibly get 70k or so on it. Not sure if I want to refinance it, it took me a long time to finally get it paid for....

What are your thoughts?

I wish to God somebody would have made me read "Rich Dad, Poor Dad" at 18 years old, I made my 11 year old son read it....After high school I joined the Military because I really felt that I had no other doors that were open to me. It worked out, I am 10 years in, 10 more to go and I am retired....But, after learning what I know now from reading on here and reading "Rich Dad, Poor Dad" I had other doors I could have went through...

Its not how much money you make, or what your occupation is, its what you do with that money...I could have easily grabbed two jobs and started off investing in mobile homes right there around my town that I grew up in, and eventually worked my way up to residential housing...Mobile homes are so much more cheaper to get into and they are very popular around my hometown...

I currently have 4 properties and plan on grabbing one more house before I start paying them down. I own one home free and clear and it will help me pay the others off. There is nothing like having some help when you are trying to pay down debt... I would also have ensured that I had plenty of cash reserves for each house before I moved on to the next one. I was so focused on growing my empire that I didn't put anything back and used credit cards for some things (I am out of that debt now). I have now stopped growing and plan on building each account for a good reserve (5-10k) and paying the mortgages off one by one using the snowball effect.

Hope it works out for you!

Chance

In my humbled opinion....There are way more blue collar families out there looking for rentals than there are families with higher incomes, and have good solid careers...I own three rental properties, two of them I paid in the $70k range and they rent for $850 a month...Never had any issue renting them out, actually had people kicking my door down to move in, therefore I could be real selective as to who I picked...

My third rental house is a $170k home, and I rent it for $1100 a month. Ive had more issues and headaches with that house than any other house and would love to just be rid of it...I will stick to the $70-$80k range homes, for me they are cash cows, way easier to pay down, and I have a larger audience to select from. Try paying down a 165k home, its way to exhausting. I am not going to even try...

Chance