All Forum Posts by: Christian Rojmar

@Jonathan Greene Great tip! I will certainly segment areas if I buy small multi-family properties that are not already segmented the way you mention.

@Sam B. I think we are saying the same thing..... I don’t agree with the philosophy of “figure it out” at all. I think you need to take action, but to jump in with no knowledge or understanding and then hope that someone will hold their hand is foolish, especially in today’s market! When market turns, a lot of these guys are going to feel it really bad and the experienced investors will take advantage of the situation.

@Jonathan Greene I am green but shake my head every time I read one of those posts. I also notice how investment properties are flying off the market at prices where there will be negative cash flow and negative equity to start out, even in areas where appreciation is far from certain - makes no sense! Seems to suggest exuberance and a bubble that is about to implode to me, but that is another topic of discussion.

With that said, I have noticed a trend on for example BP's podcast, which is that a fairly large percent of successful investors seems to have begun their investment career by jumping in with two feet first and figuring things out afterwards. I must have heard at least 10 times on the BP podcast (out of maybe 140 podcasts that I have listened to) the guest stating that they "jumped in knowing nothing about real estate and figured it out and learned along the way." These same guests also seem to advice people that want to get started with real estate to do the same thing - that is at least how it comes off to me.

I think the big difference with many of today's newer investors compared to back in the day is what one of my old professors  used to call the Google effect (I realize that term means something else online today). Essentially, he suggested that today's generation tend to be lazy, wanting the quick answer, and prefer to rely on others to help them rather than rolling up their sleeves and work hard to find the answers. By relying on others rather than taking the time to truly understand the problem and figuring out the solution, you will never truly learn and advance.

@Kenny Dahill great ideas! I like the smart home device idea! What would be a reasonable amount for a security deposit in your opinion?

There may already be threads out there on this topic that I have not seen. But what do you find being the best ways to increase rent or generate more income for your SFRs and small MFRs? A few things I can think of at the top of my head is to:

1) Add leasing fee for additional occupants;
2) Offer landscaping services for a fee;
3) Allow for pets and charge pet rent (as long as you have durable materials in home to avoid faster wear and tear);
4) Update hardware in kitchen;
5) Change old light fixtures - make sure you have good light in the home;
6) Update doorknobs;
7) Repaint front door; and
8) Add outlets with USB ports.

I have heard some people mentioning that adding a smart thermostat can help increase rents - anyone have first hand experience?

@Cody Brown Many 401(k)s allow you to take a loan and so it is not necessarily true that you cannot touch the funds until you retire. But be aware that there are certain restrictions and disadvantages with taking a 401(k) loan. For example, there are circumstances when you may have to repay the entire loan in a lump-sum and if you can't, you will be penalized. With that said, real estate is often considered better than saving in a 401(k) due to at least (and I am probably missing certain advantages and disadvantages so do more research):

- Real estate tends to give you more control - You have more control of how you invest the money (location, forced appreciation, rent properties and build long-term passive income, etc.). There are self-directed 401(k)s that allows you more freedom but not utilized by many.. You can also sell real estate at any time or take the cash flow from a rental and use the funds for whatever.

- You can use leverage with real estate

- Tax benefits - both 401(k) and real estate have tax benefits (can defer real estate taxes through 1031 exchange while 401(k) contributions are pre-tax and deferred until withdrawing the money).  But with real estate you have depreciation and interest expense deductions. Can also be tax free for heirs when you pass away while 401k will be paid out and taxed to beneficiaries.

- Rent increases with inflation.

401(k) obviously have the matching contributions which is nice.

It is never a bad idea to diversify rather than putting everything in one asset class. As such, it may make sense to at least take advantage of matching contributions. My wife and I used to max out both of our 401(k)s but after learning about real estate, we now only take advantage of the match - the rest goes towards real estate. We are also likely going to take a loan from the 401(k) accounts for a property in near future.

@Derek McGillicuddy What are your goals? What is the cash flow on the property? Do you expect appreciation to continue going forward? Do you have or think you can find another deal that is better long-term? There is a lot of missing information to give a complete answer! If it cash flows well and you have enough equity, a cash out refi may be the way to go - Have you looked into this?

@Rick Novotny, forgot to tag you...

Congrats! I am looking to acquire some properties in KC/KCMO as well. How has your out-of-state experience been so far (seeing you are from Denver)? I would love to connect sometime.

@John Novu@John Novu what are your goals? Does the 15 year cash flow? Regardless, personally, I prefer the 30 year as it provides more cash flow and you are not the one paying the higher interest rate anyways. Also, getting more cash flow and having a lower monthly payment will help you borrow more money for the next property (if you are planning on buying another investment property). You can always pay extra monthly to shorten the 30 year loan if you want to go that route - but you cannot lengthen the 15 year loan without refinancing. Just my two cents.