All Forum Posts by: Dave Woolley

@Tobias Falzone, @Chris Mason - Yeah I figured my expenses were high but was just following along with advice from BP in making conservative estimates.  Thanks for the advice on taking a longer term perspective and analyzing different scenarios.  I'll definitely do that.  I'm an analysis paralysis type though so need to balance that if I ever want to make the leap! ;-)

@Brent Coombs - My current interest rate is 3.99%

@Anthony Gayden - Yeah I probably could have dumped a lot more more into my 401K but took the approach to only contribute as much as my employer would match and stock the rest as cash so that I could remain liquid.  It's definitely time for me to make some adjustments in my approach!

Thanks again for the replies and advice all!

@Chris Mason, @Brent Coombs, @Dylan Vargus... Thanks for the feedback and encouragement... very much appreciated!

In regards to my calculations... rent for comparables in my area looks to be ~$3850.  My mortgage is $2300/mo, property tax is $808/mo, and insurance is $67/mo... total comes to $3175 which would give me a positive cash flow of $675/mo.  When I add in all of the other expenses via the BP Rental Calculator (vacancy rate 5%, capex 18%, repairs 5%, property management 10%) the total comes to $4427 and results in a negative cash flow of $596.  Does this look like an accurate analysis or am I using inflated numbers?

Thanks again!

Hello BP Community,

First post from a hopefully soon to be real estate investor. Firstly, thanks so much to BP for providing this amazingly informative and collaborative platform for real estate investing… what an awesome community it is!

So I’m working on step 1 of the BP Path to Purchase… putting together my finances, budget, and timeline. Here’s how my things look for me currently…

• -~$100K cash
• -~$70K in 401K
• -Own a house in Silicon Valley (4bd 2ba - SJ Cambrian area) that I purchased for $499K in 2003 (now valued at ~$1M). Current mortgage balance is $456K.
• -Other than the mortgage on the house I have no debt and credit score of ~830.
• -I currently work full-time and my annual savings is ~$10K.

My goal in getting into real estate is to merely replace my income so that I can live off passive income and quit my job. The approach I've mainly been considering is BRRRR with multi-family (duplex, triplex, fourplex) and I was envisioning putting $50K down as 20% on a $250K property, spending another $20K to rehab, then living in one of the units and renting the others. This seems pretty straight forward. My quandary involves what to do with my current primary residence. I was planning on holding on to it and rent it out (~$3850/mo) but unfortunately when I run the numbers via the BP Rental Calculator there is a pretty big negative cash flow (~$600/mo) so that would obviously be a pretty bad investment decision. I'm guessing most REI folks would say ditch the property but I am constantly being told by family, friends, and randoms that I should NOT sell my house… main reasoning being that owning a house is like gold in silicon valley and that I would not be able to afford to buy back in if I decided to move back. The alternate option I came up with was to remain in my primary residence and rent out the spare rooms to get more cash flow coming my way. I'd be interested in hearing others thoughts and perspectives if anyone has any.

Thanks in advance for any feedback!

-Dave