All Forum Posts by: Chris Lopez

@Seth Lindaman

I'll avoid looking at tastytrade at the moment - once I start looking at that, 10 hours will pass and I'll have my charts loaded up again!

I'll send you a PM about getting together. Looking forward to it!

@Jonathan Jaime Velarde 

Jonathan Twombly gave you great advice.

I have a personal finance degree. The human psyche and habits are really stressed as part of successful long term investing. One of the reasons I did not pursue a career in financial planning, is because I felt planners play more therapist, than actually giving advice. When the stock market tanked in 2008, everyone was panicking and planners were spending the majority of their time comforting their clients about just riding it out. 

My point? Emotions play a big role in investing! That's awesome you're saving a lot of money. While you're doing that, build up your personal financial plan and your emotional intelligence. 

- Build up an emergency fund of 6 months to 1 year. Consider putting it into a ROTH IRA. You can still access the money with no penality, but there's a bigger psychological barrier of withdrawing the money compared to a savings account.

- You're young. You have time on your side. Don't get caught up in the moment and make a bad deal. Sitting on 50k in the bank for a bit, is a nice feeling. 

- Remember, no matter what, there are always deals!

@Nicholas Lohr I spent 3 months working with a commercial brokerage that specialized in 15-100 unit apartment buildings in SoCal. Getting into 5+ is a totally different world. I was a sponge and learned a fair amount. 

Talk with different banks before getting loans. For a good part of the year, Chase was the best lender for apartment buildings in SoCal. But right around the end of Q3, they really tightened up the loans they were making because they hit their internal benchmark for how much of their portfolio they wanted in SoCal apartments.

How much did you put down for the 4 plex? The deals I saw had investors putting down 25-40% for purchase or refi. It was a lot more than residential loans.

It's all about the numbers too! The way to increase value was to increase rents and minimize expenses. That's all anyone cared about.

@Seth Lindaman Good looking boxer! I have a 1/2 boxer, 1/2 pointer. I love the boxer personality.

What's your strategy with stock options?

I spent a good 2-3 years studying and trading stock options and then on the forex market. I also had good mentors in both. I made money using both with the strategy of you're going to win 50% of the time and lose 50% of the time. Only bet (let's be real... it's a fun form of betting) if there was a 3:1 ratio of the trade going my way. It was all technical and short term.

Trading was my full time job as I had built a good residual income from two businesses.

I made money, but not when you factored the amount of time I invested. Plus, I got so tired of staring at my computer for hours a day. It's hard competing against wall street and all the high frequency traders. The markets are too efficient. 

As you know, real estate is not efficient and is a people business. Relationships are a huge part of making a deal happen. I love the stock market, but my money is 90% S&P 500 low cost index fund and 10% short term bonds - Warren Buffet's recommendation.

My active investing efforts are 100% real estate. 

Anyways - sounds like we have a lot in common. Let me know if you want to grab coffee and talk numbers!

@Nathan Hayes Are you more concerned about liability or just minimizing taxes? Or both?

@Bill S. - His comment is spot on.

I've had various S-Corps and LLC's over the years for non-real estate businesses. They are a pain the *** to setup, maintain, file taxes, pay annual filing fees, etc. Years ago I did an analysis of the amount of income I'd need to generate to make the fees and headaches worthwhile. I can't remember the exact figure, but it was around $70,000. Any income less than that was a waste of time/money.

My biggest concern with real estate is a huge lawsuit that would wipe me out. I can handle a 15k repair. Yes it would suck, but it wouldn't wipe me out like a 800k lawsuit. Even if you have your property in an entity, there's still a chance that the lawyers can "pierce your corporate veil" and go after your personal assets. 

I carry higher than normal liability on the property insurance (500k) and have a million dollar umbrella. As my assets grow, I'll keep bumping up my umbrella. Umbrella's are inexpensive - ~$300/yr. The extra liability insurance on my property was nothing, like $20/yr. It costs me $5 to add a fix and flip to my umbrella. 

To me, it's less money, less headache and more piece of mind. Once my portfolio gets big enough, I'll consider using an entity. As you look at entities, make sure you calculate if the property depreciation will pass through. If it doesn't, that's a lot of free money you're missing out on.

Disclaimer: talk with an expert!

I'll repeat what Bill said - put all your money and focus on making deals happen now!

@Charlsi Kelley Welcome to Bigger Pockets and real estate investing!
If you haven't check out https://www.biggerpockets.com/forums/521-events-an...

It sounds like you're on the track.  A couple of things to keep in mind as you're devouring information:

1) Don't get sucked into high priced ticket items with gurus. Frankly, you can really learn everything you need with free information from Google and BP. There are great networking events and resources that charge modest fees that are worth the time and money.

2) Avoid "paralysis by analysis" - you'll never know everything. There comes a point where learning all the time hits a point of diminishing returns.

I have some experience with real estate investing and am in the process of growing my portfolio and deconstructing the practices of more successful brokers and investors. If you ever have questions, please reach out to me or check out the website in my signature - that's where I'm posting what I'm learning.

@Doug Dillmuth

There's no right or wrong in terms of investing in smaller properties vs one larger property. You can make a lot of money or lose a lot in either one. Consider:

1) What's your comfort zone?  A lot of people are very comfortable buying a single family home or a condo, because it's in their comfort zone rather than putting $250k as a 20% downpayment into a commercial or small rental apartment building.

I'd recommend staying within your comfort zone as you start out.

2) What fits into your personal finances and risk tolerance? What happens WHEN there is a major repair, vacancy, etc? Is it going to cause a domino effect on the rest of your finances and investments? You don't want one bad event to make you lose the property or worse! 

In my 20's I took every risk in the world. Now that I'm in my "mature" mid 30's, I won't do any investments that make me lay awake at night and worry.

Since you're a new investor and have a baby on the way, my recommendation is to stay conservative as you start. Take $50,000 and buy a ~200k property. After closing and it's been rented for 6 months, go buy another property. You'll learn a lot in the first deal about buying property and about yourself. It's much easier to scale up into more investments, than try to back peddle out of a big one.

There are quite a few great investor friendly brokers in the Denver area. Talk with a couple and see who is a good fit. Definitely reach out to Charles Roberts of Your Castle. He's an investor in Denver with a good portfolio and closed hundreds of transactions for investors. In full disclosure, I'm a bit biased because I'm working with him. I'm working with him because he's a good guy, knows his stuff, and is exactly where I want to be 10 years.

If you reach out to me, I can share a couple of case studies of recent deals that investors have purchased off the MLS in the Denver area. Also, I can send you over the spreadsheet that we use to analyze properties.

Chris

@Dylan Eggers - I'm not a lender. I believe your partner can take out a loan without your credit or DTI being a factor, but you can still be on the title.

I've been self employed me entire life and recently moved my corporations from one state to another. I was going to have submit my tax returns and jump through some extra hoops to get qualified for a loan. The loan officer suggested putting everything in my wife's name, since her W-2 income and DTI I covered it. That's what we did to keep things simple.

Minimizing expenses is key! I know a couple "millionaire next doors" who drive to their office in their 10+ year old Civic or Camry, while their employees pull up in nicer and newer cars. I've never owned a car from this millennia. Every year I keep driving my current car, is another ~$5,000 year saved that is put towards stocks or real estate.

@Phillip Bicker Glad to know it wasn't me just losing my mind!

@Shane Baum - Van Ed has a 7 day free trial that allows you to access the content, but not take any of their quizzes. Their exam prep was great - it seemed like half of the exam questions were almost word-for-word identical. Also, I called and asked for a discount. They gave me one! Can't remember how much, but it's money saved. 

@Shane Baum

I took the CO brokers exam in April.

Whatever you do, DO NOT use Real Estate Express (McKissock Company) online website. The teaching and content is horrible. Before taking it, I already had my California salesperson license.

I could not understand or pass their Contracts course. It, along with the other courses, are horribly written. I would re-read the same page a few times and have no clue what I just read. I failed their internal exam 7 (yes 7) times trying to pass the course. That's never happened to me - I'm the exact opposite and am a great test taker. 

I ended up switching to Van Ed and really liked them. Their online course took me two weeks to complete. The online content is solid and their exam prep is great. I passed the CO broker exam with a 93%.