All Forum Posts by: Emily And Eric Erickson

I can't speak to the VT market. In Tucson, I pass on anything with less than $600/month cash flow. All deals are made on how you buy which includes the cash flow projections. 

Quite a bit to unpack there. 

Building anything new (duplex, SFH etc) is a unique project that has a large learning curve that requires lots of time and money. And that doesn't even include the land purchase before any of that is possible which is another skill set

Buying existing cuts all of that time/cost out but then you are at the mercy of what is currently available

In general, all tax advantages require you to hold the property for at least a year. 

Recommend you keep searching the BP forums until you find a strategy that aligns with your preferences

STR regulations are mainly driven by the specific HOA that the house is in. Each HOA have their own bylaws found in the CC&R's and typically the newer the neighborhood, the more strict the STR rules are. So you can have a house with no CC&R's and STR rules all the way to not allowed at all.

You will need to drill down to more specific area to give a more detailed answer

In general, duplexes are NOT in areas that people want to go to vacation. Usually found in mixed neighborhoods with apartment complexes and lower income areas. Not in Class A neighborhoods where STR do better in

STR is a combination of real estate and the hospitality industry. More money for more work

Keep posting questions and searching for related questions you have on BP to find the model that closest matches your preferences. There are no wrong answers in real estate, just bad fits. 

Julia 

There are tactics and then there are end goals. 

I love real estate and am actively looking to build my portfolio for myself and with partners, most with 20% down, 30 year mortgages. 

However, my end goal is to have all of these investments with NO leverage. All paid off. True financial freedom without having to worry about making a mortgage payment. 

And the first property I want paid off is my home. It is not an investment property, it is my sanctuary. 

If you love where you live, why put that at risk and into the hopper with all of your other investments? Paying your house off may make you MORE money than an investment by lowering your monthly bills, thus making financial freedom even easier. 

If you don't love where you live, why not sell, release the the equity to invest and find something that you do love, making it a win-win?

My end goal doesn't have to be yours but don't confuse them with investing tactics. 

Matt

You may want to take a step back and consider if there is a better strategy then the one you are currently chasing. If your plan is to keep adding real estate that you are actively managing, you are by definition adding a new job on top of the one you have and your wife has every reason to be concerned. 

Real estate is a great strategy as everyone on BP can attest. But is also work, especially if you are on the active management side. I actually left my corporate job 6 years ago because I DIDN'T have the time to really immerse myself in real estate and do it at a high level. That isn't the answer for everyone but it was the only answer that allowed me to protect my family time while pursuing my end goal. 

I have a partner who has never even seen any of the seven houses he owns. He works full time and is happy to just be the money investor, get his quarterly reports and checks and spend the rest of the time with his family. 

It is all a question of what is the true constraint and highest value. Both of us are happy with our decision and neither is wrong. Recommend doing some searches on BP and seeing what passive income options make sense for your specific situation. 

Zach

Biggest thing that jumps out in your post is emphasis on the sales price and amount invested and not a lot of detail on the cashflow numbers even though your stated goal is cashflow long term

This is a common trap, especially when making the jump from a retail buyer to an investor. Retail buyers only look at the list price and obsess on how much their house has gone up on Zillow. This is an appreciation focus and is entirely market driven. Great in a strong market, painful in a market that doesn't appreciate (think Midwest). 

As an investor, it is all about the cash flow. Active real estate investors are currently getting 15-20% cash on cash returns right now in many markets and that doesn't include any backend appreciation estimates. Every deal you look at you need to forecast what your monthly cash flow to see how quickly you will get your down payment back so you can go do it again. 

In my market, I don't look at anything that doesn't cash flow at least $750 per month. To get to $10K per month, you would need just over 13 of these type of properties which in 7 years would be just 2 a year - totally doable. You have a great goal, time to execute the plan. 

John,

Two answers to your question. 

The first, if you don't want to go down the syndication road and want to have actual properties that you control, you will need a great partner to handle the day-to-day operations of your portfolio. That can be the traditional property management role where you manage the property manager and not the individual properties. The main downside to this path is how the property manager gets paid and how profitable each property is to you are not always aligned

The other option is to do a partnership where you are the capital investor and your partner finds and manages the actual deals. Full disclosure, this is the model I use for myself and my capital investors. You give up some equity in this model and you gain a lot more time back since you are not having to manage the manager anymore as no day to day decisions are being pushed to you for final approval. 

The second answer to your question is yes. If you have the 20% down for each property, you can find lenders who will fund more than 3-4 properties. It may not be the same lender for all 20+ properties but with the right mortgage broker and investor friendly program, there are plenty of lenders happy to help. I currently have a partner who has 7 mortgages on 7 different investment properties not including his own personal residence and is saving up for his 8th down payment to put another property into portfolio with the goal to buy 1 property every quarter. He uses real estate to balance out his fixed income side of his overall financial portfolio while maintaining a strong position in stocks as well. Works great for him and can for you too. 

 Congrats on the completed deal. Details on cash flow / rent levels would be great extra's to help round out the example

 Agree - definitely get some more quotes on other lenders who should have a shorter seasoning period. Technically it is not a refi but a new conventional mortgage that is replacing the hard money loan.