All Forum Posts by: Isiah Ferguson

@Chinmay J. Thank you sir, for your feedback. Yeah owning free and clear properties VS loans are different 2 different business models. As I study more, ill just have to figure the approach best fits what I want too accomplished. 

Me & my fiancé made the  "mistake" and cash out on a duplex for 95k and 4k in repairs back in November 2016. Our monthly cash flow has been great at 1,020 per month which calculates about maybe 13% ROI yearly after taxes and insurance. Our main focused was cash flow at the time but I think we have the concept of REI wrong a little I'm not sure. The more I educate myself in this game leveraging is starting to make more and more sense for the simple facts of appreciation, cash flow, OPM/banks, & taxes. With leveraging, lower cash flow per door after expenses doesn't quite make sense to me yet when the goal is to acquire enough cash flow too cover your expenses etc. Appreciation isn't always guaranteed and I had the same issues with bank too. No one wanted to lend me money because I didnt have a W2 job at the time because I got injured playing professional sports and I was receiving workers comps but I knew I wanted to build in this business. Leveraging is a little scary but I think if the numbers are correct at purchase and expenses are calculated correctly, and with reserves, you can protect yourself. I also think it ball down too your exit strategy, worry less about cash flow at the moment and build your business. The cash flow and appreciation will come if you buy right from the beginning then you can enjoy cash flow later as you scale up and this is why I'm looking to do a cash out refinance and get my money back. We still figuring things out because having a property free and clear feels so much better than having mortgages I bet but I think we have to look at This as a business that has to be grown. idk I'm still a newbie but thats how what I see now.

Also we're renting for $1,100 a month. what can be the exit strategy for this with our banks issues at the moment  ? any seggestion 

@Ericka G. I completely understand your matter of doing all cash deals. Me & my fiancé make the same "mistake" and cash out on a duplex for 95k and 4k in repairs back in November 2016. Our monthly cash flow has been great at 1,020 per month which calculates about maybe 13% ROI yearly after taxes and insurance. Our main focused was cash flow at the time but I think we have the concept of REI wrong a little I'm not sure. The more I educate myself in this game leveraging is starting to make more and more sense for the simple facts of appreciation, cash flow, OPM/banks, & taxes. With leveraging, lower cash flow per door after expenses doesn't quite make sense to me yet when the goal is to acquire enough cash flow too cover your expenses etc. Appreciation isn't always guaranteed and I had the same issues with bank too. No one wanted to lend me money because I didnt have a W2 job at the time because I got injured playing professional sports and I was receiving workers comps but I knew I wanted to build in this business. Leveraging is a little scary but I think if the numbers are correct at purchase and expenses are calculated correctly, and with reserves, you can protect yourself. I also think it ball down too your exit strategy, worry less about cash flow at the moment and build your business. The cash flow and appreciation will come if you buy right from the beginning then you can enjoy cash flow later as you scale up and this is why I'm looking to do a cash out refinance and get my money back. We still figuring things out because having a property free and clear feels so much better than having mortgages I bet but I think we have to look at This as a business that has to be grown. idk I'm still a newbie but thats how what I see now. what you think @Ralph R.

Wow. I'm so overwhelmed with you guys responses. I'm happy I can spark conversation with you guys. All this information is definitely has help me moving forward. This REI game is very diverse and everyone has their own approach. I have a lot too consider as a newbie. Business is business and of course the numbers has to be right. I will take this and learn.

@Linda S. Thank you. I know exactly what you mean. Maybe I'm naive but these are the type of environment I come from personally. There's a somewhat difference between a war zone and a D class neighborhood. Growing up my family was on section 8, food stamps etc. That's all we had at the time and how we survived. I feel like this game can be a headache from each class. You make think you got a good tenant but they're bad general speaking. All people from D class neighborhoods aren't bad people. Too me it made be less of a risky because I come from that culture and I somewhat understand what's happening. I know how to distinguish and have a sense of the drug dealer and his crazy girlfriend compared too the mom and dad who goes to work and pay bills to make ends meet. This Game Is diversified and everybody has their way of doing things. I just hear a lot of negativity about this class. I just want learn the good side of things with bad from an experience investor and make decisions from there. Thanks again everyone, you are appreciated.

I thank you guys for the feedback. I appreciate it. I think it's just a different approach to think about for me moving forward. 

@Steve Kontos Thank you and you've made a very valid point. I think having a solid team in place is crucial. I also understand the appreciation aspect is limited. I see with very low purchase prices the ROI can be really high. I think with a great system in place for the tenants to follow how can you lose ? I also think it will be a great learning tool because as I hear, you will deal with almost every problem real estate has too offer. How would I know it's not for me to handle if I don't try. Idk just curious.

@Will Barnard That's true but what's the good thing about it ? Can this be a great learning experience, can I learn a lot about REI dealing with D class neighborhoods, would it help in any way ? I love to see the positive side of things.

Hey, BP family. I've notice as a new investor that it seem like everyone is trying too avoid D class hood. I hear a lot of negativity about it. Is their any upside with theses neighborhoods ? What's on the positive end of things ? 

Wow this is similar to my story. You have a lot to consider here. I'm new here to BP as well, I've only been browsing the site for about 2 weeks now. I recently brought a property off zillow with cash. I brought at retail price which was a mistake because I didn't understand the rule of thumb when it comes to appreciation/forced appreciation. If I can do it all over I wouldn't of brought the property nor pay all cash. But keep in mind this game is a learning curve. Knowing what I know now I would've leverage my money and only put down 25% if that. Watch the neighborhood where you purchase. Cash flow and appreciation should be considered. Also cash flow and free and clear cash are different. There's a lot of different things you need to consider. Also what I've learned more often you'll get a better ROI when you leaverge compared to to being all cash in if the numbers are right. Just be patient educate, and watching the podcast on here. I'm still a newbie but that's my advice.