All Forum Posts by: CJ M.

@Summer Pepitone

Study REI, join your local REI group, network, pay attention to property prices in the area you're looking to invest in, and learn as much as possible. I started out like you by listening to RDPD. Then I fell into a great book (also on YouTube for free) called The Millionaire Real Estate investor by Gary Keller. It was like a step-by-step guide for real estate investors! After that I found a couple local investors and became close with them. Finally bought my first property a year ago, and now I'm in the process of closing on my 13th one.

@Joshua Shull

Does your rehab include a budget for a continencies? One unexpected expense could kill your return. Also, as another poster askes, are you including your banks closing costs.

Anyway, most people will say 10-15% CoC is good, which I agree, however with this being your first deal, you want to hit a homerun! I would hold out for a better deal.

If you're going to BRRRR, can you find a property for around $30K-$40k and put $10-$20K into it, then pull all of your cash back out during a refi? Just a thought

@Ikaika Farmer

Funny I was just listening to Robert Kiyosaki's "Before You Quit Your Job." I'm at the part where he says "There are many ways a person can go to reach being a millionaire." They are:

1. Inheriting money

2. Marrying for money

3. Being cheap

4. Being a crook

5. Being lucky

6. Becoming a smart entrepreneur

@Randy Bloch

I rounded inflation to 3% and meant using 4% as a goal to do better than inflation.

That's just how I look at it. Meaning if I'm not getting 4%+ I'm not getting a return on my money. Sorry, was typing quickly while in a car, but thanks for clarifying my comments.

@Randy Bloch

Inflation, cost of the dollar depreciating every year

@Polly Feeney

You're welcome. And I should clarify, I use Vanguard for my Roth IRA. It now allows for a $6000 contribution per year. You can use them for mutual funds for a non-Roth IRA account as well, I just haven't yet.

To answer your question about the 90 days (when using Roth IRA funds), it depends. There are a couple things that could happen. For example, if you used say $30K and then missed the deadline, you could only put $6K back in that year (vs. The entire $20). So in essance it would take 5 years to replenish the account.

Also, from my understanding, if that 30K was comprised of contributions AND earnings, you would have to pay taxes on the earnings and an early distribution penalty (similar to if you withdrew 401K $ early).

Hope that helps.

@Polly Feeney

Keep in mind the cost of money is nearly 4% a year. A 2% APR wouldn't excite me. I get your money is liquid, but perhaps consider putting a portion of your cash in mutual fund like Vanguard. My returns have been nearly double-digit consistently, and you can take out your contributions penalty free pretty easily. In fact you can use 100% of your funds pentalty free once every 365 days for real estate so long as you put the money back within 90 days. I used that tactic for a BRRRR property last Fall and it worked great!

@Polly Feeney

Depends on your circumstances, but timing the market imo is counterproductive. There are always good deals out there, so I wouldn't wait on a specific time period. L

Also, where are you holding your cash (savings acct, checking acct, IRA, etc.)? If it's in a savings account, you're losing money on it every month.

@Seth M. Jones

The key is cash flow with little to no money out of pocket. Use leverage but do it wisely. In my case, I didn't have a ton of cash stockpiled, so leverage was the only way I was able to grow quickly. And don't get so caught up in 5% vs 6% vs 7%, etc. APR's. Run your numbers and if the CF works at whatever rate, take the money!

@Sam Lopez

I lived 45 min north of Dallas for a number of years. Dallas is growing north so quickly, I'd recommend looking at the smaller towns of Anna, Sherman, Denison where prices are still reasonable. Property values were skyrocketing in those areas last I checked.