All Forum Posts by: Derek Luttrell

@Caleb Heimsoth the roof and furnace will need replacing in a decade. Outside of that, it's ready to go (inspection was last Friday). 

You're right about the tenants, and that's a huge reason why I chose this property. Maybe some day, but right now I don't feel experienced enough to dive into the world of $50k houses that rent for $5-600. 

How has your experience been in the sub-$80k category? 

@Brandon Roberts I'm from zip 46814. Property taxes are killer in Chicago, so I'm actually becoming more and more interested in using Fort Wayne's lower cost of entry to help me scale. The downside is Chicago is 3 hours away, but it's really helpful that my dad still lives there and is more than happy to be my "boots on the ground." 

@Brandon Roberts it's in Southwest Allen County, zip 46804. Less than a quarter mile from the Jorgensen YMCA. I graduated from Homestead in 2010, and IU in 2014. Lived in Chicago ever since graduating college. 

@Thomas S. I imagined you might have chimed in with something along those lines, and I know you're right, but in this hypothetical situation where I have the max of 10 loans, what other option would there be other than to pay the smallest balance off?

@Caleb Heimsoth how have you pulled off 3 single families by age 23? What price points do you stick to? I assume you've put 20% down on all of them. I didn't have my first $10k saved until I turned 24.

@Scott Kaczmarek those are good points. Nothing makes you do all your homework quite like knowing you'll be writing a $30,000+ personal check. 

@Caleb Heimsoth very cool. My first two are local and are condos here in Chicago. The one I'm under contract on is a SFR in my hometown of Fort Wayne, IN, where my dad still lives.

10-12% CoC with very little money spent in the immediate "repairs" budget is exactly what I look for.

We have similar goals, but I was figuring 10 properties and/or $4000 cash flow at age 30. Once hitting 10, I also plan to focus on debt pay down. To me, if you pay off a property, both your peace of mind and your cash flow increase, without actually having an additional roof, furnace, or tenant to worry about.  

I don't need to make millions on real estate, but if I can be 30 with $4,000 in cash flow and then go work a rewarding $40-50k/year job with low stress and decent benefits, I'm going to really enjoy life. 

@Anthony Gayden I've been curious about borrowing against my own 401k. From what I know, you can borrow 50% of the balance, or $50k, whichever is less. Do you pay yourself back over time, or do you cash out refi after a reno to pay back your 401k immediately? 

@Joe Splitrock I appreciate your post. You're right, not doing a BRRRR almost makes me feel like the other investors are smarter or, like you said, I'm doing things the wrong way. Thank you for the reassurance.

@Nick C. @Craig Curelop thanks, guys. Through my house-hack and income, I've been able to save $5-8,000/month (commissioned sales, so it can vary), so I try to be ready for the next down payment every 6 months. I'm 26 with 3 properties, and my goal is to be at the max of 10 conventional loans at age 30. 

If I'm at 10 properties with an average personal down payment of $30,000/property, I just wanted to make sure it wasn't dumb to have $300,000 of my own savings into the properties, considering the popular opinion seems to be to use the bank and/or other peoples' money to scale. 

Hi Everyone, 

I was wondering if there were people out there who, as the title suggests, simply scale by using their savings--especially those of us with high incomes, and are able to save much more quickly than the average person. 

I am under contract on my third property since July 2017, and it is the third that is more or less move-in ready. I've never done a reno, and so far have only done things like fresh paint, new window treatments, update appliances, little stuff like that. The numbers are working, and I realize there are better numbers through things like major value-adds and the BRRRR strategy, but is it crazy for someone like me who has saved and deployed $60,000 of my own money on down payments in the past nine months to scale this way?

I don't exactly have time to manage contractors, source materials, etc, and I feel like my time is better used to make sure I continue to excel at my W-2. Is this an unintelligent way to go about this? My goals are cash flow through buy-and-hold.