All Forum Posts by: Dmitri L.

Just thinking out loud..

If he lives in the building currently, he may not want to sell - that would mean either moving out or paying rent in a building that he used to own.

However, one interesting twist you could try if he owns the building free and clear - purchase with seller financing, then deduct his rent from the note payment. Essentially he can pay his rent with pre-tax dollars

Alternatively, since he says he's too old to "do anything" with the building, perhaps you can offer to put in sweat equity for a small % ownership of the building? As in managing improvements/rehab/tenants/etc

As the others have mentioned, you need to find out the value of the building first. Don't buy if it isn't really a deal, especially due to emotional attachment!

Just my 2c

-Dmitri "Not a lawyer. Get a lawyer." 100D5Y

@Marco Santarelli - Great advice and really good point about mapping out an acquisition strategy. Here's how I see it playing out at a high level:

• years 1-2: slowly acquire properties based on what my income will permit, while maintaining healthy leverage and cash reserves; accumulate experience and continue my education; expand my network and establish a track record of successful investing
• years 3-5: kick it into high gear and leverage the experience and track record from previous two years, to work at more creative financing options, private money, etc. Of course, if I feel I'm ready for the transition earlier, then no harm done!

@Account Closed - Thanks for the suggestion, and the idea sounds interesting. Although given my goal of creating passive income, putting together a massive organization that I have to manage, and being responsible for other peoples' money in that way, would likely be more stress than it's worth for me personally. If anything, once I grow to that scale and if I want to keep going, I'll get into commercial developments. One of the podcast guests mentioned that putting together a 500K deal takes exactly the same amount of work as a 50K deal, which resonates quite well with me - given the choice I'd rather just work on a few large projects.

@Peace Van - Lease options sound quite interesting also, I will definitely look into the mechanics and see how I can incorporate them into my strategy. The more tools on the belt, the better (as long as you know how to use them!)

Thanks again to everyone who replied up to this point. Getting over 1100 views on my question in a few days is incredible! Viva BP!

Cheers

-Dmitri / 100D5Y

First off, a million thanks to everyone who read and responded to my post. Just the fact that it got over 600 hits in under a day helps me feel I'm on the right track in terms of a goal that will keep me motivated.

@John Rooster - good point about available resources. I should have 40-60k / yr investable from the day job, more in good years. Due to the short timeframe, cashflow from the properties themselves won't be a huge help, though. Will focus on other financing options including private money and partnerships, as my own funds get low.

@JT Spangler - thanks for the link. Yep that's a great article and this was what initially helped to open my eyes to what was possible.

@Troy Fisher - good point on debt pre-payments. I was thinking of using a "waterfall" method of paying off one loan at a time as quickly as possible, then leverage the increased cash-flow to go after the next loans (as mentioned in @@Mark Ferguson 's article). But in the acquisition phase, it would probably be more advantageous to save up the cash thrown off to finance further deals. Significantly more creative financing will have to be a part of it in the later years.

@Brant Richardson, @Greg Zessin - education is definitely a major piece. I've been lurking on BP for some time, listened to all the podcasts and am going through them a second time. Have read half the book on the list, and getting the other half for Christmas. I strongly believe that you never stop learning! But there's a point where you gotta stop reading and start doing. Also planning to attend a class on real estate investing at a local college, and reaching out to as many people as I can to build my network (arguably the most important!)

@Ali Boone - Thanks for the kind words! I greatly enjoy your posts on the blog, and it means alot to hear that from a successful investor!

@Mary B., @Jerry W., - thank you!

@Mark Ferguson - your blog is awesome, and that article on 100 homes in 10 years is what helped me to finally formulate my goal in a tangible way, and believe that it's achievable!

@Steve L. - thanks alot for several concrete and actionable points of feedback, I will definitely keep those in mind. I had not thought about quitting my job sooner. The timing will hopefully be based more on personal factors than financial . Also it's a great safety net to fall back on in case a deal or two goes seriously bad, with significant ability to pay off a loan and get out of a bad deal. Will watch carefully to make sure I know once I hit that point of diminishing returns, where splitting up my time and effort no longer makes sense.

@Troy Fisher, @Steve Foth, @Shaun Reilly, @Steve L. - thank you for pointing out the fact that $100/mo may be too low of a bar. I agree that logically a dollar figure for monthly income, makes more sense than a number of doors. In terms of income, I'll be aiming for 10-20k/mo. I picked "100 doors in 5 years" mostly because it's a very simple and tangible goal, while at the same time being quite agressive and certainly a "stretch". It's something I can both wrap my mind around, and something I can use to push myself forward. Note that the $100 _minimum_ I was referring to is "rent minus 50% expenses, minus mortgage". Technically the 50% "rule" includes vacancy and an allocation for maintenance, including cap-ex items - which I'll set aside as cash reserves, separate from the funds meant for future deals. Major repairs in the initial years would certainly put a damper on things. I'll mitigate this risk as much as possible by trying to avoid deferred maintenance and doing any needed work up front. The day job can also provide some fallback funds for major repairs.

While we're setting stretch goals, I suppose there's no harm in going for a higher minimum cash flow! Let's say minimum $200/mo/door or $500/mo/deal, whichever is higher. So an SFR would be OK at $500/mo, but a quad would have to cashflow $800/mo.

It doesn't roll off the tongue quite as easily though. 100 Doors in 5 Years

Thanks again all for your feedback, and look forward to talking more, real soon!

-Dmitri

Hello All!

I'm hoping to dip into the collective wisdom of BP and get some input on my high-level REI plan, below. Any and all comments, suggestions, and clue-by-four-ing much appreciated!

WHAT

Goal: To own 100 rental units each cash-flowing min $100/mo within five years.

WHEN

2018 = 100 doors

201x = ???

2014 = 3 doors

WHY

• Why? To provide passive income, make full-time work optional, and escape the cubicle.
• Why? To gain financial independence and the freedom to live life on my own terms.
• Why? To be fully dedicated to my family, have time for hobbies and other endeavors, and contribute to the world in a positive way.
• Why? To live a happy life!

HOW

I have no idea how I will go from zero experience to 100 doors in 5 years. However I do know that without a specific stretch goal, simply dabbling in this new field will not get me to where I want to be. This thread therefore serves the triple purpose of committing my thoughts to paper, soliciting feedback from those more experienced, and putting me on the spot in front of the community to commit to my goal - and deliver!

A few rough ideas on strategy:

• I intend to keep my day job for at least the next 5 years. My wife and I make a decent income which should allow us to purchase 3-4 properties a year, as well as re-invest all cash-flow into mortgage payoff and new properties.
• Since I currently live abroad and will have to invest long-distance regardless of location, I have the flexibility to pick my target market based only on the macro trends, financial issues (tax etc.), deals availability, and the quality of the local team I'm able to pull together. This will be the subject of another post.
• Putting together the right team will be a major focus. Agent, inspection, lender, PM, etc.
• Financing will be the other major focus. I want to maximize the first 4 loans that I should be able to get conventionally. Preferably do these with a bank that also does portfolio lending to build a relationship there. Then focus on portfolio loans, private money, and seller financing.
• Deal flow would initially be off MLS, agent, turnkey provider. But branching out quickly into direct marketing, once I've worked out the mechanics and have a solid process for financing and management.
• To maximize the return on time invested, aiming to focus on multi-family properties (2/3/4 units) to allow me to reach my goal with less total transactions (less loans, less overhead, etc). Possibly 1031 to a larger commercial-sized apartment complex in the future.

Well, there it is at a high level. Thanks for reading this far, and if you have any words of wisdom to share, I would be eternally grateful.

Looking forward to connecting with the many great people here, and to the challenges ahead!

-Dmitri (100D/5Y)

Gopal - thank you! Look forward to chatting more on the forums

Ned-san - thanks!! The BP podcasts were super-helpful and I'm hungry to learn even more

Joel - for the first deal I'm thinking 30-50k out of pocket. As far as yield I think the 2% rule is a good rough target to shoot for. That's 24% gross APY more or less

Matt - good to hear, good luck with your first purchase! I'm curious, are you purchasing here in Japan (with US-based lender), or over in the US? What area?

Cheers

-Dmitri

Hi All!

My name is Dmitri, and I'm a new member currently living in Tokyo Japan. I'm originally from Russia, and have lived in France as well as the US growing up (SLC Utah, Upstate NY, and NYC). My day job is in IT (network engineering).

I am quite new to the real estate scene, and found this website by chance. Learning a whole lot from the articles, forums, and podcasts - a great thanks to everyone who contributes to make this an amazing resource!

Investment-wise, I'm planning to start slow with buy and hold properties, learn the ropes, and slowly move to bigger and larger things (multi-family, apartment buildings). The goal is to eventually replace the need for a salary with the mostly-passive rent income. To this end, I'm doing lots of research on how to structure my investments as a business, anything from deal analysis down to hiring out the property management.

Geographically, I am currently split between going full-on remote investing in the US while living in Japan. Or starting out "locally" here - although the reality is that cap rates in Tokyo area are so low due to exorbitant property prices, that within Japan I would still need to invest in other major cities - again, remotely. Japan also poses some issues with language, culture, and less-familiar legal system. I believe there are quite a few opportunities though, especially via foreclosures which are much less well-known than in the US.

I'd love to hear stories of people who have started out their real estate investment by going after "remote" (as in you don't live there / never lived there) markets, and learn from your experience. I'll certainly share my blunders once I start to pull the trigger - hopefully by early next year.

Best Regards,

-Dmitri