All Forum Posts by: Ian Covington

 This makes total sense. Congrats on leaving the W-2 race. I'm probably one of the few who really enjoys my W-2 job. I work from anywhere with internet access and get paid well for it, so I'm not trying to replace it...yet. I see it as fuel to throw on the real estate investing fire that I am building. Once I feel it is really going, I may let the W-2 go. You are right about the milestones as well. Out of curiosity, did you end up cashing out old retirement plans to use towards real estate?

At what number of units, or other specific point, did your real estate investment vehicle transform from something you felt you were pushing, into some thing that you were driving? When did it change from something your primary income mostly funded, into something that could sustain and grow on its own, and that you could certainly accelerate with ease? 

I imagine it is somewhere between 5 and 10 units, depending on factors such as initial deal purchase, rent increases, etc. The math behind the logic is 7 units @ $300 net a month, will produce $25,200.00 in a year. $25K will purchase another unit where I invest. At those rates, it would gain 1 unit a year without additional funding, and only become faster with each unit purchased. 

Multifamily investors can chime in as well. I am aware that going from a ~20 unit to a ~120 unit makes a huge difference because of scale, on site staff, etc. I'm curious as to when that 'look at it go' moment happened for everyone who invests. What are the milestones?

Thanks,

Ian

I'd say that it has't changed my current situation dramatically yet, but it added tool to be leverage for incredible change. I see the light, I see the way, etc. The finish line is constantly stretched to the limit against me with real estate. I determine when and if the tape breaks.

 Practical responses are to be expected in a community such as this!

Seeking Arrangement.... While I'm not currently looking to settle down, I enjoy traveling to #1 enjoy other cities, #2 scope real estate, #3 enjoy said cities with intelligent female company on short notice without the typical dating hoops to jump through just to be able to have true quality time with a great lady. Yes, there's broke college girls on there looking for a guy to pay her regularly, but, there are also business women, doctors, etc, who also realize the need to trim the fat. They don't want money, they want time with a mentor and want to meet business minded people with goals that fundamentally align. They are potentially partners in more than business.

Core positions are up front when asked. The ladies you will find are far more transparent and honest than anywhere else. They seem to understand the bottom line. This is not to say that it can't be found via other methods, but as someone who travels to major cities for fun/business on the weekends, the system efficiently connects me to incredible women. It is not a dating game, it is a relationship. Discretion is key. Find winners.

Gorden and Austen beat me too the datacenter announcement. It only brings 100 jobs, so it isn't a big deal. I'm surprised that nobody mentioned the FBI HQ headed to the arsenal. ( I skimmed so I might be incorrect)  It should be bringing at least 5k jobs, in addition to the 4k that the new automotive plant is bringing. There's also another datacenter bringing jobs, and it isn't under facebooks fake DC name to hide the news. If I had to throw EARLY money somewhere in the Huntsvegas metro, it would be Madison, and more specifically between wall Triana, and Zierdt roads. This area south of 565 is the site for the new minor league baseball stadium, along with a shopping district. Convenient for all the new nerds (I am one).

When it comes to lending, it is fairly common knowledge that properties with greater than 4 units will most likely require a commercial loan. Properties with less than 5 units are usually qualified for typical residential loans. In the lending realm, the line is drawn between the 4th and 5th units. The discussion I'd like to start is, does any of this standard apply when moving into the zoning and taxing? Might there even be differences between a single family home, 2-4 units, and  5+ units in those areas? I'm looking for any and all information on the topic that I should be aware of as I move closer to a first 4-Plex purchase. Thanks in advance!

Once you've determined a city, I'd recommend calling property managers and getting their POV since they are the boots on the ground and it is free. If they can't provide details that give you a warm fuzzy on where to buy, move to the next one. The information you are looking for is out there. Find one that gives you more info than you asked for and info that is very specific. Start picking his/her brain! This is a good indicator they know their market well and will probably be a great manager. They can give you the detailed information on a market that says one street is a gold mine vs. the next street that is a war zone. They can give you info such as why 2/3s in one rent range rent far faster than another rent range but only on the south side of highway X, that is a winner. They should be able to provide vacancy stats, etc. Also, ask if any of the properties they manage are for sale. This can be an inside lead to property that is for sale, but not officially.

If it were me, I'd put in enough so that match at least meets the standard 10 percent saved. 401ks count when it comes to financing real estate, It gives you another option for cash flow streams, they are a bit more liquid than home equity, and you can leverage your contribution rate in order to avoid higher tax brackets. Remember, you can always pull the 401k out later

For funding investments outside of the 401k, I'd focus on reducing personal spending in order to reach those goals faster.

As an option to build funds when you are in that weird stage of not having enough to do anything with, you can invest it in high quality dividend stocks in normal brokerage accounts. This can help you "load the gun" a bit faster. Rather than having the cash just sitting there, let it earn before converting it into another investment. I did this and it worked out great for my first two properties and I plan to continue until I reach an income rate that I have enough to invest without collecting dividends and capital gains. As an example, I put about $9.5k in ATT and VZ and pulled it out upon being under contract with cap gains + dividends that came out to about $1100. I used Robinhood for this because it is commission free and you can buy it one share at a time if you want. Sure I will have to pay taxes, but it still beats letting it rot in the bank. The disclaimer is I spent about 2 years of self study in stock market investing. I knew the money was made before the purchase. If mastered, it can be a great way to keep your cash in constant motion. 

I'm an IT engineer and I enjoy what I do but, but I desire to achieve and build more. My initial plan is to create enough passive income to replace my current income (and keep growing it) so I can use my time to turn ideas into products that I can sell to the masses. The nice thing about it is I can fail almost infinitely and still live quite well with the passive income. The drive behind it all is to put myself in a position that I can influence at a large scale. I truly enjoy giving back and/or educating.