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All Forum Posts by: David Ripplinger

David Ripplinger has started 13 posts and replied 82 times.

Post: Just finished a trip to Indy

David RipplingerPosted
  • Layton, UT
  • Posts 85
  • Votes 49

I just had a pleasant and useful trip to Indy with my brother, as he and I are preparing to do our first BRRRR. Thanks to everyone who helped with the trip and met with us!

Our goal for this trip was not to find a property. We can do that long distance with the help of the team we are building. Our goal was to develop better relationships with our contacts, have them refer us to other contacts, get to know the neighborhoods a bit better, and get some practice with estimating rehab costs and analyzing deals.

Honing in on the kinds of places we want required lots of back and forth with multiple experienced deal finders, and it helped that we had done some of that with them over the months prior to the trip. That way we could fine tune it during the trip.

During some of our down time, we took a look at some rundown properties on our own so we could see more neighborhoods and practice some of the rehab analysis that others had taught us. We also happened across a subcontractor at a house that was getting finished up, and we got his general contractor's contact info, adding yet another potential contractor to our resources!

Even though we might have been able to start investing long distance without an initial flight out there, we are glad we did it.

@Joe Splitrock Touche, touche. Although there are several uses for high latency data centers, you are correct that there is an abundance of alternative options here on Earth.

For this to work, we would need a few different things:

1. A practical use and need for the land.

2. A way to protect the land.

3. A way to protect ourselves.

The first thought for using the land is residential. But I don't think that's practical in our lifetime. There's still plenty of undeveloped land on Earth, so we aren't running out anytime soon, and to support a large population on Mars I think you'd have to terraform it to some extent, and that technology won't exist in our lifetime. Another use of real estate is harvesting natural resources, but I don't think there's any valuable natural resources on Mars. Manufacturing sites would be impractical because you'd have to sustain a shipping line. There's no way for that shipping line to operate in stealth, and it would be too hard to defend against jealous governments on Earth at our points of ingress and egress. I think our best option for making the land useful is to build data centers. Since they'd be off-world, they could operate free of government oversight. We'd have to build a mostly self sustaining infrastructure of robots that can manage the data centers.

To protect our real estate on Mars against jealous governments and corporations that will eventually realize what we're doing, we'll need an army of drones that have plenty of ammo and good deep learning AI algorithms to respond to threats. We'll want very maneuverable ones, like the quad copter drones. It would be hard to protect against a nuclear strike, so we'd need to operate at just the right amount of profitability and damage that it won't be worth the expense to jealous governments to send large nuclear payloads to Mars. Maybe we can also protect the facilities better by building many of them underground.

To protect ourselves, we'll need to remain anonymous and rent out the real estate on the black market. Then we'll need some kind of business front for money laundering. I hear car washes are quite effective.

Post: primary residential refinance

David RipplingerPosted
  • Layton, UT
  • Posts 85
  • Votes 49

If you feel too busy to start out right now, that's a legitimate concern. But don't try to speculate on appreciation ever. We simply don't know when the next downturn is. Also, if you felt you have enough time to get started now, I'd say that waiting 2 years so you have more money is just 2 years you've lost for BRRRRing or flipping or whatever you plan to do.

If your schedule is indeed too busy right now, that's fine. You don't want to burn yourself out. An alternative option during the time you feel too busy is to invest more passively by lending your money to other investors here on BP. (This is what is often referred to as using private money to fund a deal. You'd be the private money lender.) That way you get to real some of the rewards of real estate investment without doing any of the work whatsoever. It's common for private money lenders to get back 8, 10, 12, or even 16 percent, just depending on the agreement you reach with the investor. Since I'm still new at this and haven't quite done my first deal, I personally don't feel comfortable yet using other people's money. But if this is something you want to try, I know a couple people on BP who I trust and do a great job outlining specific deals to lenders so that they know it's a safe investment. I'd be happy to share their contact info with you if you decide to go that route.

Post: My first post - introduction

David RipplingerPosted
  • Layton, UT
  • Posts 85
  • Votes 49

Welcome!

"What's your name?"

"Jean, but my friends call me Shauna."

"Okay Jean."

(Let's see who names the movie first.)

Post: primary residential refinance

David RipplingerPosted
  • Layton, UT
  • Posts 85
  • Votes 49

Either refinance to get some extra money or get a HELOC (what I'm doing), which is practically the same thing but with more flexibility. Then start investing with your favorite real estate investment method. I'm going to do BRRRR because I want to build a large portfolio of cash flowing rentals as quickly as possible and recycle the same capital over and over.

Post: Financing a BRRRR entirely with a HELOC?

David RipplingerPosted
  • Layton, UT
  • Posts 85
  • Votes 49

Yes, it's wise. I'm about to do it for my first property. The HELOC got funded just a few days ago. Pros are you get started now instead of waiting forever to save money, you have a much lower interest rate than private money or hard money, and you only pay interest when money is actually pulled out, giving you a lot of flexibility. Cons are that yes, it's still interest (if you have regular cash to burn that doesn't cost any interest) and that maybe you'd get a somewhat lower interest rate if you did a cash out refinance on your own home, but even then you'd be spending money on closing costs and wouldn't have nearly as much flexibility. Shop around for interest rates on a HELOC if you haven't set it up already. They can vary a lot from bank to bank and also depends on the terms of it. Also, if you need another appraisal on your home, many banks will pay for the appraisal if you follow through with them.

@Lucas Grassano Oh my goodness, you're right. I missed that. Yeah, interest rate should be way lower than 7 percent.

Ok, I took a look at the reports. A couple of them have HOA listed as a cost, and that's eating a lot into your margins. So, if you're considering a place in an HOA, you'll need an even better rent to value ratio. Also, I'm not sure about this, but I think the 1 percent rule of thumb compares the after repair value, not your all in cost. Somebody else will know better than me.

I'm wondering if the number 1 issue that's making your numbers just come under for cash flow is the total home value. I think if you shopped for homes that instead have an after repair value of only like $100k roughly, you'll see the chunk taken out by monthly mortgage payments is significantly less. Again, if it's hard to find those numbers in your area, you might want to look out of state.

Keep in mind that the 1 percent rule is the low end of this rule of thumb, and it's only a rule of thumb. People usually look for somewhere between 1 percent and 2 percent, and that's just to get a rough idea before plugging in all the numbers. As you are seeing, it's quite possible to find a property that technically meets the 1 percent rule but doesn't quite cash flow.

@Nicholas Anderson Oh dang, my bad. I'll take a look in a little bit. Sorry.