All Forum Posts by: Doug Marsh

Quote from @Leo R.:

Open question for @David Yue and everyone else; why would anyone buy a cashflow negative property?

 Because you think you will get your money back from appreciation.

Hi all,

We are just getting started putting together a plan for real estate investing. We live in the Denver area and own property in Keystone, which we've been renting out with some success. For our next venture we are looking into picking up SFHs, with the emphasis on cash-flow positivity. (Primary home and Keystone property are nice long-term prospects, but we want the next one to be more profitable/self-sustaining in the short term. I get that may take us out of the Denver area.)

I'd love to meet some local investors and pick your brain on what has worked for you. If you are in or near the Tech Center area and would like to connect, let me know.
 

Hi all, 

I lived in Tulsa for a year a few years back. Now that we are in a position to be thinking about real estate investing, we are interested in investing in SFHs in the Tulsa area.

The broad consensus from the BP community seems to be that once you've identified an area where you'd like to invest, the next step is to start building your team: broker, lender, property manager, mentor, etc. Do you all have people you've worked with you can recommend?

Thanks Travis. 

Just to clarify-- the property we bought already is being used as a STR, but the next one we pick up need not be a STR. The more important thing to us is cash flow. The two properties we already have (primary home and STR) are appreciating nicely but cash-flow negative; we want the next venture to be cash flow positive. If the best way to do that is a STR, great; if we are more likely to find that with a SFH and a long-term rental, then we'll do that. 

Quote from @Catie Lawrence:

@Doug Marsh great points made above. We used a HELOC for a flip a few years back - interest rates weren't great on it, so definitely a factor. That being said, if you're buying a STR, that should cash flow more, so you could pay it off faster. But from a calculated risk perspective, maybe only pull half & save up half for the down payment.

Good luck! Where is the STR? Just curious!

STR is at Keystone. It's a 2Bdrm a five-minute walk from the lift. Tons of fun, and while not cash-flow positive the appreciation will make up for it in the long run.

Thanks for the thoughts, all. 

Hi all,

Last year we bought a vacation home near our primary residence in the Denver area. We've been doing short-term rentals with that home, more with the mindset that renting was a means to owning a vacation home than to generate income. But that venture has exceeded expectations, and now we are looking to start picking up properties specifically for the purpose of investing.

Our first question is how to approach the down payment. We could probably save up enough for a 20% down payment, especially on some less expensive properties, within the next year or so. But we also have a HELOC that is totally unused, which we could tap for up to $150k. As much as I don't want to lose more time waiting out the market (losing rent payment and appreciation in the process), using the HELOC will mean we are effectively borrowing for the entire purchase price, increasing interest payments and making it that much harder to stay cash flow positive.

What say you-- wait to build up down reserves for a down payment, or use the HELOC?