All Forum Posts by: Denver McClure

@Scott Trench Adding to your views on crypto, I'd suggest Web3 and DeFi as reasons to invest in the asset class. Personally, and as an Investment Advisor, I stick to various index funds over individual stocks due to the risk and historical performance between passive indexing and active trading. However, in crypto you could assume that a blockchain that supports Web3, DeFi, and is an industry disruptor would be a viable investment for a small allocation of your portfolio. I'd rather take the volatility and speculation with one crypto over one stock. An example that comes to mind is the Helium blockchain, although there are several more projects that fit that criteria. 

The only category I think your missing is leverage. I believe this is a common category people don't consider when investing. As we know in REI, you can use HELOCs and Cash Out Refi's to access cash (at a cost) to do more deals. Well we can do nearly the exact same thing in our Individual or Joint Taxable accounts. We can continue to invest (ideally dollar cost averaging into Index funds) in those accounts, then utilize a Margin Loan (sometimes called line of credit) to access cash at an even lower rate then HELOCs or hard money lenders can offer. I recently completed an ADU Airbnb renovation just using my Margin Loan at 2% interest, without having to sell any of my ETFs. Good examples of brokerages that offer low cost Margin Loans are Interactive Brokers and M1 Finance. 

You might call this a self-lending strategy. This allows us to build our portfolio, increase our leverage, then utilize that leverage on a rental property for example. It's all about preparing our finances and purchasing power for the next deal!

 All great points @Bob E.! @Stetson T. Stallworth, just want to comment on Bob's 6th recommendation. 

Margin Rates have become very competitive over the last few years. A good comparison can be found here on current rates. I personally use Interactive Brokers myself and for my investment clients who are looking to purchase properties or complete renovations and need access to low cost capital. Happy to help explain this further if needed!

Hey @Jermaine Johnson glad to meet another house hacker in Dallas! I would reach out to @Tyler Hodgson at NXT Mortgage to talk about FHA requirements. He's helped me with my FHA loan, and assists a ton of real estate investors in the area.

Yeah that's pretty good. My cleaner also does guest communications and property escalations. $167 for a 2bed/2bath Airbnb and $67 for my studio apartment Airbnb. 

@Kevin DuBrey If you have an individual or joint taxable account, you can contact your brokerage and discuss getting a Margin Loan or Line of Credit to borrow cash at a low cost against your portfolio. Here's examples from Interactive Brokers. 

Happy to help @Jose Rocha! Yeah a brokerage account usually is the same thing as a individual or joint taxable account. Pretty much it won't be listed as an IRA, 401K, HSA, or anything else that is retirement/health related. Here is a quick comparison on a few Margin Rates right now. Interactive Brokers is where I manage my client funds, obviously their rates are favorable for real estate investors like us :)

Hey @Michael Trueba! One more way you can raise additional cash is if you have an Individual or Joint Taxable account. You can speak with your brokerage and determine if you're eligible for a Margin Line of Credit. Depends on the brokerage, but they may lend up to 50% of your account's value without you needing to sell and stocks, bonds, or ETFs. It's a strategy I've employed personally, and one that I recommend to my investment advisory clients for rental properties. 

Hi @Bailey Rentz! My tip would be to ensure your personal finances are in order before you begin flipping. This could be an emergency fund in cash to cover 3-6 months of a mortgage, or having the ability to access cheap capital to fund your flips! One strategy I've used on a recent flip was to utilize a Margin line of credit on my taxable brokerage account. If you have one, you can borrow a certain % of funds (without selling stocks, etf, bonds, etc) and use that cash for your flip. It's a common strategy I create for my investment advisory clients! Here's an example of some of the rates.

Hey @Jorge Guilson Garcia! Congrats on taking the steps to buy your first rental property! I've acquired quite a few rentals in the Dallas market (check my profile) and would be happy to help provide recommendations on agents, lenders, and tips that will help you both get started. I currently am househacking a duplex in bishop arts with my roommate (also a travel nurse) lol. Let's connect!

Hey @Brian M.! A ton of great advice already on this post. The only thing I wanted to comment on was your $150k on the sidelines in equities and crypto. I would consider a Margin line of credit against your portfolio so you can get cash for a rental down payment without selling your stocks, ETFs, bonds, crypto, etc. It's a strategy I practice myself and one I recommend for my investment advisory clients. Just wanted to make sure you know you have the option to hold onto your current investments while utilizing leverage to enter real estate.