All Forum Posts by: David Ackerman

Hi all. I recently bought my 2nd rental in Raleigh last week. The first rental had an existing tenant. This unit is currently vacant. I used the same agent for both purchases.

When discussing ways to market my 2nd property with my agent, she mentioned MLS is a great way to find tenants. Then, she mentioned that her company (meaning her) could put my property on MLS for 1 month's rent ($1,100). I told her I have to think about it.

Well, now that I am thinking about it, that seems somewhat unfair to me. I have just purchased 2 properties with this agent (and her company) and now they want to charge me for putting my property on MLS.

So, my question is this: Should I approach my agent and say something like this,"I would greatly appreciate if you would put my property on MLS free of charge. I'd be willing to pay you and another agent a few $100 dollars if you find a respectable tenant for me. I plan on buying more properties from you in the future and this would show me that you are looking out for me and my investments"

Well, does anyone think I would be out of line saying that to my agent? Has anyone else done something like this before?

Thnx,

Dave

Hey Joey,

I was thinking of doing a cash-out-refinance. How was the rates on yours? Was it comparable to a 30 year loan for an investor? Or, are the rates a little bit higher? And, how much did they get in closing costs?

Hi all. Here is my current situation

Property 1: A recently purchased SFH in Raleigh. I put 20% down and have a 4.62% mortgage on the other 80%. The property cash flows $200/month. I have $4,000 in reserves for vacancies/repairs/assessments.

Property 2: I am planning on using my HELOC from my home to purchase a 2nd property. The current rate is 2.75%. My goal is to use the HELOC for 2 years and then do a cash-out-refinance.

If I go this route, then my 2nd property will cash-flow $550/month ($6,600/year) if the prime rate stays the same.

So, here is my question: What should I do with this excess cash-flow? My initial plan was to use the extra $6,600/year to pay down the 4.62% mortgage on my 1st property. But, now I am questioning if that is a smart move. Why should I pay off a mortgage that is at historical lows? At 4.62% that is extremely cheap money for an investment property. Would I be better off using that excess money for a down payment on a 3rd property?

THNX,

Dave

Hi all,

I have read most of Jeff Brown's articles on here and on a few other sites. He seems very knowledgeable and purposeful in his strategies.

I was thinking of contacting his investment company to work on a long-term real estate plan. Has anyone else contacted his company? If so, was it helpful and worth the price?

Thnx,

Dave

Thnx Chris.....my business partner lives in Raleigh. He will manage the properties. It just is much easier to get cash flow positive in Raleigh then it is in NYC (But I'm quite sure the appreciation will always be better in NYC)

The reason I asked the question about holding for 20 years is because my partner is convinced that we have to do flipping, and foreclosures, and short sales. I keep telling him that if we have a long-term approach and buy in down real estate cycles and get good prices on each property, then we can do just fine.

So, it is nice to hear stories of people holding for long periods of time. It will help me stay calm and focused, and it will help me explain to my business partner that this is a solid strategy

Hi all. I am just wondering if anyone on this site has held a property for 20 years or more? If so, I'd love your general view on how the 20 years or more has been.

Why am I asking this question? Simple. I am just buying my 1st investment properties down in Raleigh, NC. My goal is too hold these properties for many, many years. However, I totally understand the transient nature of life. The opinions and conclusions a person has today can dramatically change from month to month and year to year.

So, I'd love to hear stories of people who have held onto their properties for long, long periods of time. And, I'd love to hear how they stayed the course through so many different time periods.

Looking forward to hearing some responses,

Thnx,

Dave

thnx for reply Mark

Hi all. I was just wondering if this is a fair way to value the potential return on an investment property. Let me know what you think.

I purchased a $143,000 townhome with 20% down & a 30 year fixed @4.6% right outside Raleigh, NC. My closing costs were about $5,000. My initial investment was around $33,000.

STEP 1: Being extremely conservative, I figured in 1% price appreciation per year for 30 years. So, in 2042, when my loan will be paid off (of course, this only assumes I never pay down my mortgage) I value the town home at $194,658

STEP 2:I calculated the cash flow for 30 years. Right now I am clearing around $200/month. I figure rents will rise over the 30 years. Being extremely conservative, I estimate my average cash flow/month with be $250. If I multiply that by 12 I get $3,000 in cash flow per year. If I multiply $3,000 X 30 years I get $90,000 in cash flow over 30 years.

Now I have to calculate for REPAIRS and VACANCY. I will use 50% of cash flow for REPAIRS and VACANCY. So, now I am left with $45,000 in cash flow after 30 years.

STEP 3:Not including taxes, in 2042, if this scenario plays out, the value of the townhome will be $194,658 + $45,000 =$239,658.

STEP 4:I calculate the total return on my $33,000 investment to be 724% over 30 years ($239,658/$33,000)

**this does not include the potential of pulling out equity to buy more units and it doesn't include the tax benefits.

Does this calculation make sense? Am I looking at this investment in a fair way?

I look forward to hearing comments,

thnx,

Dave

Wow....that is a horrible story about Enron. But, that story says so many different things.

1)You would think a DR. would be smarter then that
2)NEVER EVER put all your eggs in one basket
3)NEVER EVER put all your eggs in one basket
4)Know what you are buying. I bet not one person who owned ENRON stock actually new what that company did. When you buy Coca Cola I would say that most people could explain what they do. But, even with that said, there are no guarentees. There are plenty of stocks that have gone bankrupt that people understood (think GM and Woolworths).

I own both stocks and real estate. For many years i keep flipping in my mind which I like better. Stocks are much easier to buy and to manage. Real estate feels a lot safer but involves much more work.

What do most people think? I'd imagine because this is a real estate site people will say they like real estate better. But, I'm curious if any one on this site will say they prefer owning stocks better then owning real estate.