All Forum Posts by: Fernando E.

 @Wale Lawal great tips, I've been careful on the location, I intend to fly out and look at the market before I spent hundreds of thousand of dollars, I can spend $500 on a ticket and hotel. Thank you for the response!

 @Ryan Kelly I think that's a great strategy to reduce the rate risk. Curious on rates on a seller financing, typically how much points is the delta between the bank rates and the seller financing rates. E.g. If the current bank rate is 6.5%, what will you expect a seller financing rate will be?  IF that's a dumb question apologies as I have never done a seller financing before. Thanks for the response

@Nathan Gesner I can imagine the feeding frenzy with emotional buyers, I was about to turn into that as we were looking into price cuts in Austin Texas. I took a step back and look at the macro economic condition, also the analysis made by Patrick Bet David in the housing market is controversial but reasonable, made me take a pause.  As a very experienced investor, what will you consider as a good deal for those that are just starting up i.e. have less than 3 house portfolio? Thanks for the response.

@Eric Yu Our first SFR was negative as well in Elk Grove, CA we sold it Q3 this year after holding for 3 years. We were negative about $300-500 a month, in hindsight it was not a great deal but the appreciation saved us and allowed us to get a good return. The area was developing and the community was good. The first deal is not always a home run but it did allowed us to learn. Curious, what is your exit strategy for a negative cash flow property? Also how do you fund the negative cash flow? Thanks for the response

Agreed with the 2 gents on the duplex, also make sure you have a few months cash reserves. 

I had some experience with hard money loan on a deal that fell through out of state so I have some idea on how that works. However, for my next deal, I will go conventional route 20-25% down. Plain and simple. I'll get creative as my portfolio grow.

Hi BP,

It's been a while since I posted, hope everyone is managing well despite the bad macro economic condition

Wanted to get your insight on your investing strategy in this recession, are you buying or holding cash to wait out the recession?

I'll start, I was helping family to hunt down a good property in Austin Texas, SFR, close to the tech hubs, got pre-approved and started searching. We ended up slowing down in the search as the interest rates continue to rise and the deals are no longer working - cash flow negative. For my own investing, I was looking for property in the bay area SF, looking for price cuts but numbers still don't work here unless I sell my SFR to buy a bigger house where I can build an ADU and house hack.

Historically, the shortest recession ends in 6 months, the longest a few year ala great depression. Hopeful that it ends within 1-2 years. I think the Fed will continue hiking the rate to control inflation and destroy consumer demand. I plan to continue educating myself listening to BP, find some creative way to reach my investing goal, saving cash and getting ready. How about you, what's your game plan?  Thanks and good luck! 

Hey @Rick Petersen first I love that you know your why, for family and generational wealth. This why will give you the fire when the hype and excitement of real estate investing is gone and you’re facing headwinds. Awesome.

Regarding the deal, I’ve been reading up and attended both @Brandon Turner and @David Greene books and webinar and I think you haven’t factored in the condition of the property, it’s location - neighborhood, both are crucial in multi family investments as the amount of work needed to  operationalize and achieve positive  pure cash flow between a C/D vs A/B property is significant. Also I would probably start with small Multi get my feet wet, also lower risk, lower down payment so even if issues arise you’re not over exposed that you lose your peace. Health first of body & mind. Slow & steady. Learning as you go. Good luck, you’ll do great with that why. Apply risk management & get a good team. 

Thanks @Account Closed great insight! I sent you a connection request, I'm performing some due diligence for multi family in Las Vegas, Reno Nevada and also Florida.

@Ju Feng good luck in your search! 

Thanks @Eric Fernwood for sharing this, its very helpful.