All Forum Posts by: Dr. Jordan E Smith

@Michael Swan Very smart! Keeping those reserves seems to be the only way to play it safe in real estate investing. Thank you!

@John Underwood $300-350 seems to be the consensus despite all the other aspects involved. I agree with you on the or why bother part because I really don't like to bank on appreciation. It actually sounds much wiser to find homes under market value and force appreciation in case the market decides to crash again. Great analogy by the way!

Being a chiropractor is a lot of fun but I realized quickly that it leaves very little time for family and travel and I'm not a huge fan of trading my time for money. Like you said, I will feel much more financially free having my money make money for me as well. 

I just read the IRA tip in a book recently I need to look into that more. Thanks so much for the response!

@Steve K. Excellent advice! Thanks for bringing up that topic. It does seem very wise to consider why a house would have much higher cash flow than average in an area, if it did. Just as if a house were 20% under market value, we obviously need to know why, if we can fix it up, and how much it will cost if so. Good point. Just you talking about your A and B units that you enjoy put a smile on my face because I do know that I will prefer properties I genuinely care about. Since it is a "side business" for now, I do have the luxury of time learning how to evaluate properties and waiting for the right deal that suits my families needs. I will remember to keep this in mind if I find a "good deal" that has high CF on paper. Thanks for the helpful response! 

@Anthony R. wow thank you so much for sharing your experiences. It's fun to hear and also helpful. I have heard that several times about the OO loan. We have a very nice living arrangement now though and it would definitely be a sacrifice to go this route but hey, with how quickly the years are going by lately, I think it would be worth it. Like you said, actual assets are what lead to financial freedom.

Thanks so much for all the feedback!

@Robert Herrera That is definitely a good investment in my eyes. I am glad to hear you collect more in rent though to give you more passive monthly income. So any loan that requires a lower downpayment (such as OO) would be worth taking advantage of?

Thanks

@Steve Miller Gotcha thank you. 

Yeah it seems the best way to do it is to finish getting my license and begin doing BPOs in my area and check out listings on the MLS.

I want to be able to recognize a good deal so that once we have our downpayment and fix up cost saved up along with 4 months mortgage/expenses, we can move on it quickly when I hunt one down. 

@Thomas S.

I see what you're saying. Yes perhaps I should have been more clear that I do not even wish to consider appreciation, loan pay down, or tax benefits in the monthly figure. I would consider all costs as accurately as possible though, including saving for repairs and vacancies. 

The figure I was seeking the monthly profit received from rent after paying mortgage, insurance, tax, loan interest, and saving 10% of rent. I assume this is the $150/door you mentioned.. 

Thanks for being specific in your response. 

@Anthony R. Wonderful. 

I definitely do not plan to ultimately do any property management (i will hire) as I'm looking to free up more time and continue to practice, but initially I probably will. 

I'm encouraged to hear you make it sound doable because i am anxious to find a good deal and complete our first purchase. 

We do not currently have a mortgage but we do have a hefty mortgage worth of student loans so we are working to get our DTI down. I'm interested in units that have more steady tenants so were on the hunt for a single family home.

Have any suggestions on the first time buyer opportunities that we should try to take advantage of? Is the Owner occupied loan something we should try to do while we have the option? 

Thanks!

@Brigham Pyron Yes certainly. I have heard 10% of rent is a good figure to set aside for maintenance and vacancy. Maybe 15% for higher turnover units such as multifamily units. Would you agree? I would not wish to make an investment without positive cash flow as this is our entire goal. 

@Christopher Finn I have heard of these rules. Thank you for the links. 

I am very number-oriented and feel the need to sit down and calculate all costs to the closest estimate before considering a deal. Of course I'm brand new to this, but I do see the value of eliminating options that are way outside of the above "tests"

Thanks so much for the response!