All Forum Posts by: Chris LumLee

Before I bought my rental I had a similar question. I hate this answer but I have to give it here: "It depends."

For me, I was saving for a down payment and the I had to get a new car so I focused for awhile on cutting down the car loan amount. I'd say it was maybe 80/20 (car/down payment savings). But now it's probably closer to 50/50 because I'm far enough ahead on car payments that I'm fine as long as I keep paying the minimum. If it's credit cards on the other hand, pay that sucker off pronto. It does depend on the type of debt you have. Credit cards, student loans. Get rid of them. Car...up to you how quick you want to get rid of it. I'm saving for a second place now so I'm down to about 75/25. But once I pay off my car I'll rip and roar to save all for the house.

So it really depends on how comfortable you are with having the debt and if you're confident you can manage it well. If you're okay with it, then by all means save for the house once you get that bad debt out of the way. Otherwise, if the idea of debt keeps you up at night, then get rid of it all then focus entirely on saving for the investment.

Best of luck to you! 

That's what it comes down to. I'd say tell him that he must be clothed. The nerve of some people I tell ya! hahaha

I agree with the others. Save your money. The first is always the worst in that the first will (generally) require your capital since you're just starting out. I only bought one place so far earlier this year but I'm looking at buying more and adding that additional source of income will only speed up the time to build enough capital for the next place. At least that's my plan.

@Connie G. I think we should set one up. I'm finding a lot of local people here now and think it's a good chance to get to exchange information.

To your first point I say this: don't underestimate the rehab costs. It's good to ballpark it but always have a bit left in the tank. Also what are your other expenses associated with the property?

To your second point, are you saying leveraging the $200K (OPM) and still holding on to your $200K? Depending on what it is you're planning to do overall, I see putting it all into one condo or allocating it could work either way.

Not the greatest of answers, but I hope this at least helps a little.

I'm at a loss of words.

Good grief! I watched the video of this episode and I was amazed at the speed and precision that @Arianne L. had gone through these deals. It definitely motivated me to keep pursuing the dream!

@Kyle Davis,

I suppose it all depends at what point in your investing career you're at. As a newbie with a buy-and-hold rental property, I'm not keeping ANY of the cash flow. Instead, I'm using it first to ensure (in the following order) (1) that I have enough funds to cover capex or whatever other problems or at least mitigate against huge amounts, then (2) ensure that I have enough to cover property taxes, insurance, and a small loan I took out to make the purchase.

After that then I will dedicate the leftover funds to making another purchase/investment.

If you've got a large enough cashflow that you don't "need" to make other investments, then by all means keeping the profit works.

Cheers!

Thanks, @Chris Ayers!

I would think go with the line of credit. I'm no expert, but that's the strategy I'm working on using and that's what I've seen others using. Plus, if you don't use it right away you at least have it on tap for as long as the creditor stipulates to. Best of luck!