All Forum Posts by: Account Closed

I hear you there. I've seen a few webinars where Brandon uses the BiggerPockets tools to analyze properties, and he always just plugs in a ballpark repair cost from experience. I'm guessing he goes back later (when he's actually putting together an offer) and nails down those repairs some more. Or maybe he just does the same types of repairs over and over and already has that information down.

When I analyze deals, I ballpark it first to see if I'm even in the right universe, then start getting better numbers if it makes the cut. That way, I spend the advertised 5 minutes on 90% of the properties I look at, then I do a deep dive on the rest.

@Scott Trench - I might just take you up on that beer offer sometime. ;) Thanks for your input (and thanks to everyone else who's chimed in as well!).

@Shiloh Lundahl - In fact I did ask for the fastest way possible. What you're describing sounds essentially like the BRRRR strategy, which I'm definitely considering.

@Jay Helms - Thanks for the advice. When you were forming partnerships, what did you bring to the table? I currently have no real estate experience outside of research, so I'm trying to figure out what value I can provide to a potential partner.

@Brent Coombs - Yep, I'm convinced that the way to real, lasting wealth through real estate is buy-and-hold, which takes time. That said, I'm trying to apply some Grant Cardone 10X thinking to my situation to see what I can do to accelerate the process.

@Brent Coombs - My next step is to save up for a 3.5% FHA down payment on a small multiplex to house hack. I want to convert my wasted rent into loan paydown ASAP.

Paying off the variable-rate debt, then using cashflow to pay down the fixed-rate debt makes a lot of sense to me. Suppose that my debts were paid off. Where would you go from there? In my area, 20% down on a SFR or small multiplex could be $60k, which is a year of saving at our current rate (not even including closing costs). Adding one or two units per year is slower than I’d like.

Just to clarify, I don’t intend for this to be a “tell me what to do so I don’t have to think about it” kind of post. I’m just interested in hearing what investors with more experience think about the options available. Hopefully other new investors will be able to benefit from that input as well.

Goal: Generate at least $2,500 net per month outside of my job and my wife's job.

Current Location: I live in a suburb or Portland, Oregon, where SFRs and small multiplexes are currently going for around $300k. (Of course, this wildly varies with specific location, condition, etc. I'm just using this number to illustrate that homes aren't $80k here, nor are they $700k.)

Occupation: My wife works within minutes (on foot) of where we live and loves her job. I can work from anywhere with an Internet connection. Her telecommuting options are very limited, and she has no desire to leave her current job.

Current Financial State:

• Saving $5k per month to put towards investments or extra debt payments
• Have around $110k in fixed-rated debt (all 6.5% interest or less)
• Have around $40k in variable-rate debt (currently at 7.95%)

The Million 2.5 Thousand Dollar Per Month Question: If you were in my shoes, how would you reach my goal as quickly as possible?

We started out following some advice from Scott Trench's book, Set For Life. We moved to within walking distance of my wife's office to eliminate a 75-minute one-way commute, along with about $400 per month in gas money. We've got one car that we paid for in cash that gets 35-ish mpg. We've always been frugal, so our non-debt expenses are pretty minimal.

We moved into an apartment so that we could start reaping the new location benefits as quickly as possible, but we're actively looking for a small multiplex to house hack in order to further reduce expenses and get started on our investment journey.

But after that, things get much less certain for me. We could focus on paying off consumer debt (either all or just the variable-rate stuff), we could house hack another multiplex, we could start looking for SFRs, we could invest out of state in turnkey properties. We could do any number of things.

So what would you do?

From what I've read, the fix-and-flip strategy is primarily used to acquire capital, whereas buy-and-hold is mainly used to build wealth. So which strategy you go with depends on your current position and what your goals are.

As for if there's still room to do it, Brandon Turner recently said in a webinar that you can't find great deals anymore. You have to make great deals. So no, it's unlikely that you'll be able to just grab any old property off the MLS and flip it, but if you look for other opportunities (direct mail and other off-market methods, and maybe the occasional special MLS listing) and get the seller to agree to the price that makes your numbers work, it's definitely still possible.

I'm watching a video by Brandon Turner called How I Quickly Analyze a Rental Property for Cash Flow, and as he's filling out the BiggerPockets buy and hold calculator values (specifically, the repair costs), he says "we can always change these numbers later depending on what we find out [about the property]" (around 5:21 in the video, for reference).

Suppose the numbers appear to work out, so I submit an offer based on my first-pass estimates. I'd then go check out the property, make any adjustments to my offer, and resubmit if the seller counters. Suppose we then reach an agreement and accept an offer, then I discover unforeseen issues during the inspection.

I know I can back out of the deal (at the expense of my earnest money) if I added an inspection clause to the offer, but is it acceptable to stay in the deal and reduce my offer at that stage, even though we've already reached an agreement? Is that a common practice?