All Forum Posts by: Dominick Galinis

I look at business exchanges like relationships. If one party is bringing more to the table than the other, that’s generally an unhealthy relationship. When renting, both parties agree that living in this property is worth X amount of dollars, and the moment they either stop paying me; or if I randomly raise the rent on them, it is unhealthy for either party. So if my tenant cannot pay their rent for an extended period of time, why should I be forced to stay in an unhealthy relationship?

Also, I look at my Lock Screen and see a picture of my baby girl looking at me. And I love people, and my heart goes out to them, but that little girl is way more important to me than any of them.

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Originally posted by @Cameron Braig:

@Dominick Galinis

If you have trouble getting around the 2 year timeline a potential opportunity in the meantime could be syndications.

Being an investor can provide insights and information that can help as you build out your own portfolio. It may not be a fit for your financial goals, but if so it could be a way to gain some experience and insight as you work through a two year timeline. Best of luck and congrats on getting started.

By syndications I’m assuming you mean putting my Money towards it? Or do you mean raising money myself? I’m definitely open to either and would love any insight you might have into getting into them

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“Beards are cooler than mullets so over the top it is”

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Originally posted by @Joe Villeneuve:

Originally posted by @Dominick Galinis:

Originally posted by @Joe Villeneuve:

Originally posted by @Dominick Galinis:

Originally posted by @Joe Villeneuve:

Originally posted by @Dominick Galinis:

Originally posted by @Joe Villeneuve:

Originally posted by @Dominick Galinis:

Originally posted by @Joe Villeneuve:

Originally posted by @Dominick Galinis:

Originally posted by @Joe Villeneuve:

Originally posted by @Dominick Galinis:

@Eric Ching to answer your first question: it's a math equation. Based on your numbers, you're buying a $210K property. Yes, people want high monthly cash flow, but it becomes inefficient with low COC%. So in your case, I expect some people to recommend putting a down payment of 20%-25%.

Is it a good deal? That's up to your goals and this flows into your question about cash flow vs COC%. Do you strictly want a few properties that will cash flow you out of a job? Do you want to build a massive portfolio? What does Eric want? And that will give you the best answer for you. To answer the question directly, it's a blend of both. I would rather get $300/mo cash flow at 12% COC% than what you're getting, but that's MY preference. I would use the extra money to put into more properties to scale quicker.

Lower DP is always best. Your DP, as long as you have Positive CF, is your entire cost. When you spend more cash upfront, with the idea of getting a higher cash flow, all you're doing is paying for that added CF upfront. It's not a gain. You have to recover all of your cash.cost before it becomes a gain, so the more cash you start out spending, the more cash you have to recover, and the longer it takes before a profit is made.

Well yes. From a strict numbers perspective, lower DP always makes the most sense. But that doesn’t necessarily make the most sense if someone’s goal is to only have a few properties with less headaches.

Typically the counter to that is “having more properties is less risk because of vacancy %, etc etc”, which, again is true. But if I didn’t want to pay the mortgage out of pocket if I had a vacancy, it’s not the best option.

Again, from a numbers perspective, spreading out your investments make the most sense, but from a goals/peace of mind perspective, it’s not always the case.

Uhhhh???

The numbers ARE the goals...the ones with $ signs in front. How you get there is up to you, but the most efficient way is spending less cash.

The mistake you're making is assuming you go at this one property at a time. You don't. Every decision to buy should be made on what you know you are doing next, ...and every "next" should be an exponential move. When your decisions give you linear returns, it takes longer, and you actually are involved with more properties....just in a row.

The exponential returns should be based on expansion at every step. Expansion doesn't have to mean more properties at the same time. It just means you are handling, and profiting, with more dollars.

Well, no, they’re not. Because if it was solely about the numbers, there’s other ways to get higher returns for your money in 2021 than real estate. Bitcoin and NFTs, as a popular example, or you can go and buy yourself a bread route and make about 200% on your money. (600% on your money or so, if you get a chip route.)

But, we choose real estate because of the peace of mind, and it falls within most people’s risk tolerance, and you can become financially free through it. And yes, there’s great returns as well. Not everyone wants to be a real estate mogul, and that’s okay. For them the best course of action may be to buy a house at a time.

We're talking about REI,...not BitCoin, etc... I can talk about the problems with each of your alternative options, but that's for a different forum. We're talking about REI here.

Nobody mentioned a goal of being a RE Mogul.

Read closely what I said above. Expansion doesn't have to mean more properties at the same time. Expansion means more dollars to work with at a time, and as far as REI goes, that can mean different and or bigger properties.

Well, yes. We ARE talking about REI, but the point still stands. If the goal was only about the numbers, there's better options out there than REI. And that translates into my point of there's reasons outside of just the numbers that people get into REI. And peoples goals for those reasons varies from person to person.

People feel more peace with no debt at all, and there’s nothing wrong with that. It may be inefficient, but believe it or not, there’s people in the world who don’t care about efficiency

We are talking about REI in this forum...and in this discussion. Your points are valid, outside this conversation. We're not talking about the global world, we're talking about the choice between the ones mentioned using REI. Yes, the outside world influences the decisions inside REI, but this discussion had already made the choice of using REI.

The rest of your comments sound great, sound, and reasonable influences on how and why to get here. However, we are past that, and are making a decision based on the fact we are already here.

People who don't care about the efficient use of their cash, will always be spending more than they should, and complaining about how much things cost...more than others. They will also complain about how long it takes to get to there financial goals, and can't figure out why it takes them longer than others.

There are only two reasons why you get into REI:

1 - To accomplish two financial goals
A - Make enough lump sum profit to pay off all your PERSONAL debt.
B - To have enough cash flow to cover all your monthly bills.

2 - To have fun.

As far as debt is concerned, once you learn the difference between debt and leverage, not all "people out there feel more peace without debt". They do feel more peace with leverage. They understand the difference between cost and expense, the importance of using their cash and not spending their cash, and what the 3 parts of risk are, and how to control it with leverage.

Yes, we are talking about REI on this forum and conversation, but my point still stands. If the point of investing was 100% about the numbers, you shouldn't be here.

Well, no.. we’re not. The purpose of the last question was, “which is better?” So no decision has been made yet.

again, you keep trying to talk about efficiency, but that’s not the discussion. I’m saying there are other things that go into it other than efficiency. Which you seem to keep side stepping.

it sounds to me that you don’t talk to others outside of those who think just like you. because there’s significantly more reasons than the two you listed to get into real estate. It may be why YOU got into real estate, but that doesn’t mean everyone else has.

you are aware that leverage is STILL debt, right? Even if you want to get cute with it, it’s considered good DEBT. Again, not everyone sees the world that narrowmindedly

Simple question for you. How long have you been investing in Real Estate?

Simple question for you, do you believe you know more than Dave Ramsey? I don’t fully subscribe to everything he says, but he’s not wrong when it comes to the mentality behind what I’m saying. I can play the authority game too my guy!

That was a simple question...that got answered...which explains a lot. Thanks.

Was it? I wasn’t aware you had more experience and results than Ramsay. Good for you. But if we’re both being honest, we both know ya don’t.

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@Anthony Feola

@Brandon Rush hit it right on the head. There’s benefits to both, but it just depends on your goals. It’s more efficient to spread your cash out, but to some people they don’t like carrying all of that debt where paying for cash would be more preferable. It just depends on what you want your portfolio to look like and how fast you want to get there

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Hey BP fam,

I’m just curious if I made a mistake of sort here.

I recently left a job that I was at for a few years (wasn’t a good place to be for work/life, etc etc), and since have decided I wanted to be a realtor and still invest in properties. Yes, I understand being a realtor is hard and not quick money and yes, I know that I don’t need to be a realtor in order to do investments. I genuinely want to do both.

now, with the desire to be an investor and realtor, if I remember correctly, I have to have a stable income for 2 years with a 1099 to get a loan.

Outside of creative financing, there's nothing I can really do at this point, is there? Just save for the next couple years and jump in then? Also, if that IS where I'm at, what would YOU do with your money in the interim? Just let it sit or try to put it in say, a REIT or something until I'm ready to buy?

thank you in advance!

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Originally posted by @Joe Splitrock:

@Lauren Akins in my experience many people underestimate how much money they need and overestimate free cash flow.

First of all for living expenses, those costs will generally increase as you age, especially if children are involved. Even besides that medical, dental and vision can be huge expenses. Your health care needs in your 40's, 50's and 60's are huge compared to 20's and 30's. Just getting comparable insurance to your W2 will probably cost you $10K or more per year.

Cash flow is often overestimated because people just subtract mortgage payment from rent. They fail to include all the other operating expenses. CAPEX in particular is underestimated. Over a 20 year period, every major item in a property likely needs to be replaced, flooring and paint even more often. CAPEX is the silent killer of cash flow. On top of that if you want passive income, you may want to hire a property manager, which further cuts cash flow. You want to calculate "free cash flow" which figures in everything.

As you already mentioned, the number of units depends on the deal. There are houses that rent for $5000 and apartments that rent for $500.

Calculating the number of units will require you to work backwards from income. When I started out in 2004, I was making around $60,000. I did some math and figured I could cash flow about $500 a door if the properties were paid off. Working backwards form that, I calculated the need for about 10 houses. Over time had a family, increased my salary and increased my life style. We passed the 10 house mark and our paid off houses are cash flowing over $1200, although we have become bigger fans of leverage over time. I have freedom to retire but continue working and growing my portfolio.

Having a plan for the end game is important, BUT I guarantee you that plan will change and adapt. It is far more important to just keep acquiring properties and worry less about your exact exit number. Take action today to invest. When the time is right to step out of your W2, you will know it. I say this because so many people get so overwhelmed by an exit strategy that they never even get started.

Hey Joe,

I’m sorry for pulling the conversation for a second, but question for you. Am I understanding correctly that you paid off all your properties first? Or what was your general investment plan?

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@Luis Canales

hey Luis, good on you for starting your journey! But like others (such as JD) have mentioned, WHY do you want to do this? It sounds to me like you understand the overall benefits of REI, which is great, but do you understand what the benefits of REI are going to be for LUIS? What do you want out of this man? Is it to retire young? Help retire your parents? Be wealthy? What really speaks to your heart? Because without that, this journey will knock you out. You need something bigger than the generality of it to pull you.

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Originally posted by @Michael Plante:

Originally posted by @Account Closed:

Originally posted by @J Scott:

Originally posted by @Account Closed:

Originally posted by @J Scott:

I did it for several years by flipping between 30-40 houses per year, with net income of about $25-35K each.

On over a million net in one year, how much went to taxes?

A lot! Depending on your state taxes and whether or not you have other depreciation or deductions you can use to offset some of the income, you'll probably end up losing about 30 to 40% of it.

Lol. I just wanted to get that information out there.

That's why I quit flipping. The money was great, the taxes were greater. Alas.

Us being in FL saves us the WA state income tax so a little bit less. What are you at there 5%?

Washington doesnt have state income taxes

2 Votes

All Forum Posts by: Dominick Galinis

Dominick Galinis has started 6 posts and replied 93 times.

Post: Just Sold! 6-unit building in Fort Lauderdale, FL

Post: You will have to do ugly things to get ahead in real estate

Post: Did I make a mistake?

Post: Toilet paper protocol

Post: Monthly Cash Flow vs CoC ROI

Post: $80k in Cash and Ready to make the leap...

Post: Did I make a mistake?

Post: How many units needed before you hit financial freedom, and why?

Post: 18 Year-Old Looking For Once-Lost Motivation

Post: How would you Net $1,000,000 flipping in 12 months?