@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!
@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
@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
@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.
@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.
@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.
@Salvatore Lentini thank you for your responses!
my question is this:
I still need to get my first property, but I want to scale quickly. So I go back and forth about making sure my first property is the right property. How do I “set that aside” and focus on getting the first deal down?
@Omni Casey hey Omni, thanks for sharing. First off, grats on the success! Secondly, you’re an inspiration as a dad, and being one myself, I look forward to teaching my daughter the same things you’re instilling in your kids. Thank you for sharing and congrats!
@Sarah Hoffer congrats!
@Annie Johnson hey Annie! Welcome to BP! I’m in Broward, but would love to connect!