All Forum Posts by: Ingrid Nagy

If you buy for cash flow the future of the housing market will never severely impact you as people always need a place to live, whether we are in a downswing or an upswing. I was taught years ago that the real estate cycle is generally a 20 yr cycle. If you look back historically we crashed in 1988? and again in 2008. If we never come back up your risk is minimal and your return is minimal until a recovery where you sell or your debts are paid off and cash flow increases dramatically. Flipping can work the same way as long as you invest with your head and are mentally prepared to either carry that house or lease out the house and cover your debts until there is a change - i.e. decision time. No analyst in the world can give a concrete time line prediction of when this will occur. History however tells us it will return.

For every person that profits in real estate there is generally someone that loses. It is still a gamble but a gamble that usually pays off to those that remember the cycle. If you plan for the long-term but take advantage of the short-term advantages when they present themselves I feel you cannot lose. I've watched many very savvy investors through the years buy up like crazy on short term financing hoping to flip for profits only to see them fall. I've also seen several old timers become millionaires by taking the tried and true road.

Eddie, Jon explains it perfectly and this is the old tried-true method of buy-hold wealth creation. Its done over time but with little or no cash outlay on your part but it takes time. Buying with cash, rehabbing with cash and leasing out works just as well. You still have to earn the $$ to buy it, wait for your $$ to be paid back and then you have your great cash flow. The old method works for people who don't have the upfront cash but want the same/similar result. The old method provides greater opportunity I believe but also greater risk.

I own 54 but started with only one 22 yrs ago at 25 years old (now you know how old I am LOL). I was hoping to pass them on to my kids. Kids don't seem to have any interest so I am currently pondering what my next move will be.

Rich, like Tim, I have those traveling dreams too!! You have achieved the success in business and joy in life that many of us hope for and you are a model and an example of what we could become.

I was simply trying to bring a sense of reality to this topic. I have great respect for someone who can go from a full time job to becoming a full time investor in less than 2 years. All methods lead to the same dream becoming real - the ability to become financially independent and live a good life.

I have to agree with Rich. I live about 45 min out of NYC and I estimate it would run me about $3000 a month. When I move to FL I estimate about $1500 a month. My kids are 15,16 and 17 so I can't make the move for a few years.

I'm not pushing the buy-hold strategy on anyone here, just my own personal experience. Some of my friends used to laugh and call me the slumlord. They tried to get me into the buy, rehab, flip game or buy, rehab, hold. Told me they were making money hand over fist. They said I was doing it all wrong. Sometimes I questioned myself. Those same friends are now either in foreclosure or bankruptcy. They made the money and they raised their standard of living like the train would never stop. Some of their hold properties are sitting empty and they can't even meet the debt service.

Point being this: real estate investment, no matter what method, still carries a degree of risk. Invest wisely and save a little for the unexpected.

It took me 20 yrs to do RE full time and not by choice-forced 2 yrs ago by a layoff. I was a buy-hold buyer. The process for me has been a slow one because a) my objective was not cash flow but future appreciation for retirement and b) I had no initial cash investment outlay (OPM). I never took a look at my true cash flow during the years. I lived off my salary and when I had extra money I invested in another property. In reality my cash flow does run about $100 per door. This does not seem like a lot of money after 20 years but for the moment it replaces my salary. A return of $5400 a month is a good return on an investment of zero dollars but the true next egg is in the values today which will provide a comfortable retirement I would not have been able to achieve.

I had a fire in a 6 family 15 yrs ago. The insurance gave me piece of mind as the loss of rental income provision kicked in and I was able to rebuild and have income to continue making my mortgage payments. I agree that in multi's it is much more important to have coverage than a SFR.

My old boss is a firm believer that insurance is not necessary. He insured his buildings that had mortgages but kept a $50K deductible. All others had no fire coverage at all. I think it boils down to what level of risk you are comfortable with.

I don't like paying the premiums but I do like the having peace of mind.

I see it from a different standpoint. Being from NJ anything selling for $13,000 a door seems like a steal. If you see no income tenants or low income tenants in there it's not condemned, I'm sure it probably has heat, hot water and is liveable. Being old (1929) it has its own set of problems I'm sure but old structures are solidly built and unique in their own way - look at my photos of a building from 1910 and you'll understand.
Depending upon the location there are tons of assistance programs out there (thanks to the Obama administration) that offer landlords grants and low interest loans to improve low income housing. The weatherization programs available include contributions towards replacement windows, new heating systems, new roofs, etc. Many of these programs pay 75% of the cost with the owner contributing 25%. The only catch is that you agree to lease to low income tenants.

hmmmm..........I guess it depends on the spouse. Mine was helpful/cooperative at times but combative at others.... didn't like me being the head of the operation. You have to admit - every team must have a leader right? The unnecessary competitiveness was one aspect that led to the failure of the marriage.

Now what advice would you give to me in a similar situation? My tenant's grease fire occurred 3 weeks ago in a 4 story bldg-21 yr old cooking french fries in 71 yr old grandma's rent subsidized unit. Deductible is $5000 so obviously not worth going thru ins. My losses: $300 electrician, $50 stove hood, $160 hall fire extinguisher recharge, cabinet replacement above stove to be determined as I'm not fixing anything in this unit until she leaves on January 31. Latest costs $1200 for bed bug extermination because with smoke bed bugs spread from her unit to two more. One would say I can't prove where bed bugs originated from but the City won't accept that one-say its my responsibility to get rid of them. This is the worst tenant I have ever had in 20 yrs and I can't wait for her to leave. They are poor and have no tenant insurance. Such grief she has caused through the years - yet a part of me feels badly for her. Its a two-edged sword.