All Forum Posts by: Jake Kellerhals

@Brandon Turner , there ya go. Just listened to a podcast today that encouraged us to post a profile pic, so it was already on my list for tonight!

I paid $135k for a property brining in $1,875 per month and it's been great. A lot of it depends on your financing (as you said) but the potential is there. It looks like you pay utilities though? We do not on our building and that is certainly another variable.

Our property that is similar to this performs well, but is also our worst property from a numbers standpoint. So I think you CAN do better, but I'd buy this one and then find your better one and buy it too!

Sounds like you need to get with a real estate agent and tell them what you are looking for.... right after you speak with a mortgage broker so you can find out how much you can borrow. From there it will get much easier as you narrow down your options.

I agree that buying a duplex or triplex sounds like a good option for you. You should buy something that you can live in while the other units rent covers your mortgage payment. You get to live for free while also building equity. When you get out of school you can either sell it, refinance it or keep it until you get your own place, then rent out the unit you lived in and put extra money in your pocket each month.

As for getting a few thousand per month, that will probably take you a while with rentals. To get the kind of money you are going to need more than one property and get pretty good deals on the buy. Your safest bet would be to find GREAT deals and wholesale them to experienced investors for a few thousand (3-5) per deal. Do one of those per month and you have met your goals, and you'll learn a lot along the way!

Cash flow is king. If you want to pay it off early, you can in the months that everything goes smoothly and you have the extra money. The months that a water heater goes out or you have a vacancy, you have the flexibility of a lower payment.

The other factor is your financial discipline. IF you'll take that extra cash flow and save it for the next investment, you certainly should. As another poster noted, you could take the money and pay extra on your principal, but that only provides a modest return of 4-5% (depending on your interest rate). You should be able to get a MUCH higher return on that money by rolling it into your next property!

I've just recently taken the plunge myself. Here's my "plan":

- I saved a years worth of expenses

- I have my real estate license and should be able to cover my living expenses through commissions

- Flipping/long term rentals for long term wealth building

Thanks Zac. I think you're making a good move getting your license, I only did it to be the agent on our deals, but it has turned into much more than that for me. I'm going to close on 20 properties my first year, and that was doing real estate part time. I was able to sock that money away and use it to help fund our flips. More than that though, it has kept me "in the loop" and given me great tools to get comps and other data. I'm licensed in TN and GA, but no plans to do so in AL. Perhaps one day I'll have a referral for you!

Hello bigger pockets! My name is Jake, I'm located in NW GA/ Chattanooga, TN. I'm 32, married and have 2 children, ages 8 and 4. As of one year ago I am a licensed real estate agent, and I just recently quit my day job to work on real estate full time.

I began investing in real estate about 6 years ago when I couldn't sell my first house and decided to keep it and rent it out. A short time later I purchased a duplex using owner financing, and thus I was introduced to the world of alternative financing. I still have both of these properties today and they cash flow pretty well.

My real estate investing really took off a year and half ago, in the beginning of 2012. I had a friend that had been discussing investing in real estate with me for some time, and we both came up with enough money to purchase a nice triplex that had gone into foreclosure. We had enough money to purchase it and then have a small reserve fund, but that was it. I had met another guy about 6 months before this and he and I immediately hit it off. We had been bouncing business ideas off one another for some time, so I decided to pitch the idea to him of joining or real estate venture. He agreed, and with his funds we figured we could afford to close on the triplex and then purchase a duplex to go with it. We all agreed that we wouldn't touch the cash flow, just keep it in the account to go towards our next purchase.

This is where the story gets interesting (I promise!). One partner had worked for a guy that had sold his business recently. He happened to mention what we were doing, and this former-boss was very interested. He didn't want to invest his money in the stock market, didn't want to keep it in a CD, and didn't want to manage real estate, although he knew it was a great place to put his money. He proposed writing mortgages for us if we could find below-market deals that he felt comfortable with. He would write 15 year FIXED notes and only require us to put 10% down! We happened to find a builder that had over-leveraged himself and was losing a bunch of duplexes that he had built only 8 years earlier. Each unit was a 3/2 with about 1100 sqft, and the rents were $575 per unit. We were able to negotiate the price down to $66k, which meant we only had to put $6k down per duplex. We bought 8 of them and realized over 50% return on our cash the first year, not including the principal payments!

About 6 months ago we flipped our first house, a textbook deal that we bought for 61k, put 17k into and then sold in 2 weeks for 114k. Our mortgage-guy did 100% loan on the purchase price, we put up the rehab money and managed the project and he took a $5,000 "pre-payment penelty" on the note. We took those profits and purchased 8 more units that cash flow about $1,500 per month and put about $7k in the bank.

We currently have 27 units, cash flow $5k-$6k per month and are finishing our second flip this weekend. Our third flip is under contract and we will get started on it the first of September.

I came across BP from the podcast, I've loved listening to them as I drive around town! Keep up the good work, and I can't wait to learn from everyone here!