All Forum Posts by: David Grabiner

@Daniel Baker Yes the listing agent will represent the party selling the property, so what they often do is they have their broker or someone else on their team represent you. 

 For us that has been the biggest benefit. We have started getting off market deals because the listing agents know we will buy it and they can get double commission. It might take more time now but I think in the long run it will be beneficial for you.  

Here is an idea, just make the offers yourself. Contact the listing agent and state you are interested in the property and don't have a buyers agent representing you. Then ask them to represent you in the transaction as well, and via email send them your offer and ask them to write it up and present it to the seller. As they are getting both sides of the commission they will have more incentive to get your offer accepted even if it is a low ball offer.  

If you decide to continue with school I would recommend you switch your degree from business to accounting. A generic business management degree is not very helpful in getting a high paying W2 job, because you have no skills and no experience. If you get an accounting degree you will have a skill that will land you a job or even if you don't decided to get a job, accounting/finance skills are very helpful to have when running your own business. 

I think my only useful undergrad classes were accounting, finance, and operations management the rest was pretty much useless fluff.

@Ahmad H. When we started almost 3 years ago we could get 20% COC deals (our actual COC over all our properties in 2016 was 32% of course there will be capex expenses in the future so i just call them 20% COC properties) including property management, we self manage but pay ourselves 10% to do it, straight of the MLS with no repairs needed. It has started to get a little harder but we are still finding them without having to do any marketing ourselves but we got 1 from a wholesaler and all the others have been off market listings that real estate agents bring to us directly because they know we will buy straight from them and not use a buyers agent.

@Gwen Fyfe Sorry I thought you were saying you needed that amount of Net worth in real estate. How to do you balance the two different investment strategies, how do you decide where to invest your money? I'm so un balanced I can't even bring my self to add to my index funds when the returns I'm getting in real estate are so much better. I should clarify I have no earned income so I don't have any tax advantage to use an IRA.

@Gwen Fyfe You can do a lot better in RE investing than than just counting on the 4% rule of net worth. If you invest right you can hit 50K per year with a much smaller net worth than 1.25 Mil. That calculation is for people who have their net worth invested in index funds. Keep buying those multi-families and you will be at 50K sooner than you think.

@Ahmad H.. Very good points. Taxes are hard to determine as depreciation is different for each property and people of different tax brackets. It is very possible to have a property that gives a 13% COC and pay 0 taxes on it because of depreciation especially if the property is highly leveraged. On the other hand it could be 10%.

Yes finding enough deals at a such rates is a challenge the larger you get. However if you assume $200 per door cash flow that is only 120 doors (not accounting for taxes). Not really that high of an amount of doors especially over the course of 10 years. 

@Rabih El-Khoury Yes, most small multifamily rentals in Chattanooga are 1%+ deals. Although it is a smaller market and there are not so many larger multifamily deals around. Also prices have started to go up this year. 

If you invested 120K every year plus all cash flow from your investments and you were able to get a 13% cash on cash return your yearly cash flow at the end of 10 years would be $287,348. which just abouts equals 24K per month. 

Can you get 13% cash on cash return? If yes then you should be able to hit this goal in 10 years. I aim for at least 20% cash on cash return so I think that 13% should be doable.