All Forum Posts by: David C.

Because whenever I think I'm 'missing out' on easy returns, a few visits here give me tales of year-long evictions and squatters.  Amazingly high water bills that must be researched for weeks, etc...

And I remember that either you earn the higher returns by working, or you give them up by paying others to do the property management of buyandholds, or pay general contractors and project managers to run your flips.

And I decide to stick with my easy life, for now...  Maybe when the kids are older I'll have the time and energy to earn those returns.

I sure do enjoy reading about it and I wish only great success to all of you who are willing to take the risks and do the hard work.

Where do you see turnkey 2%?  If you do, how many common expenses are they leaving out?

Yes - its the capital - they add value by rehabbing, placing the tenant and offering property management, they make money on the deal flow.

I'm a tech consultant and network with local technology people.  I've met quite a few successful guys there, some who completely make me feel like small potatoes, its a nice reality check: there are other successful people out there!

The focus of these groups is not to brag about past success - mostly its about fostering a stronger tech community in our local area - and hearing about the new things people are doing.  Having a common, future oriented goal with other successful people is a great experience.

Maybe the REIA is a good place for a real estate person? If not, maybe the chamber of commerce? economic development? find something you are passionate about and volunteer. The leaders in many volunteer and economic development organizations get there from their previous success.

Is there a country club near you?

use her 200k to add an in law suite to your house? 

why can it only cut it in half?   Mine went from 16 down to 2.

the company I used guaranteed they would get it under 4.

Our slab was prepped for a system during construction. 

The fan and install was $800.

Congrats!

@Rusty Thompson who pays the last 10%?

@Joe Villeneuve 

On a financial note. Basic math tells us that if you subtract the amount of cash you put in from the amount you get back, that tells you where you are in income/loss. So a negative number means it costs you (loss), a positive number means you have a profit...and you are ahead.

No, that tells you where you are on cash flow, not income/loss.  Positive cash flow is not the same as profit.  Negative cash flow is not always the same as loss.

Or am I once again starting the Robert Kiyosaki can make up his own words argument?  this feels familiar.  Joe - are you an RK disciple?

@Joe Villeneuve 

I don't think judges set judgement amounts based on your leverage?

This makes no sense to me:

If you paid $100k in cash for a property, you are invested $100k of your money in the property. You lose the property (how about a lawsuit having nothing to do with your property), your out $100k. You leverage the property 75%, and you're only out $25k (minus whatever CF you've had up to that point).

Anyone else here?  Is leverage a valid asset-protection scheme?

@Kevin H. 

First, congrats on being financially responsible and getting yourself in a good position.  

I'd recommend running the numbers on your paid off house as if you were going to buy it as a rental.  Does it meet you goals?  Just because you have no debt on it, does not mean its the right rental for you.  Maybe selling it is the best option?  You could then re-deploy the capital in other properties.

Doing real-estate without leverage is really giving up on one of its primary advantages as an investment. If you are cautious, try to get yourself to a place where you stick to low LTV - borrow only 60%. You can double your exposure and still be in a very low risk situation. Even in the housing bust, few properties lost 50% of their value.

I'm in a similar situation to you, I don't like leverage and I have my primary residence paid off.  My resulting choice is to invest in the stock market and live without leverage.  I focus on my consulting business to bring in more money.  I am well educated about real estate, and I know I'm missing out on an opportunity for diversification, leverage and good returns - but I'm held back by my fear of leverage.

You need to decide: what scares you most:

1. stock market

2. leverage

3. low returns

If you are happy with low returns, do a low-leverage/no-leverage real estate investment.  You'll still do better than your bank account and you won't have to deal with the stock market.

I think you should try to use 'some' leverage, but less leverage than is available at first.