All Forum Posts by: Jamel Hamka

Not sure if this helps but I have several vacation rental properties. The closest to your area is in Mooresville downtown area. Here's one of them listed on Airbnb: https://www.airbnb.com/rooms/3.... We can obviously work around them as needed. 

@Landon Bleau

Great question. There’s a math answer and a behavior answer. If we were simple computers with no emotions than using “leverage” to buy rentals even at the beginning makes sense. But finances is more than just math. It’s behavior and I have found personally that using debt is similar to using an addictive drug. It’s easy to start and hard to quit. I decided to stop playing the banks game and decided to simply pay cash for everything. Once I made that decision and I wanted to get in real estate I cut our budget down. I doubled down on my W2 and worked as much as I could to increase my wealth. With having no debt it didn’t take long to save the $70,000 I needed to buy my first rental. The first one is the most difficult by far. But I decided I would rather own 5 paid for rental properties than 50 with leverage. Oddly enough my first home was a foreclosure that was owned by one of the biggest investors in my town that slowly lost all of his rental properties from over leveraging in 2007-2008. He still owns around 60 homes in my town and lives in the house across from my rental. He is known to be a very successful investor in my town still but the truth is that he is “all hat and no cattle” as they say in TX. He gets equity and as soon as he can he refinances and buys another property. I’ve seen what leverage does. It works for some people. Debt free investing works for almost all people. It’s slow but it works...especially if your younger. The snowball grows incredibly fast and we have projected between our rent income and buying more and more houses to be needing to buy hundreds of homes a year to keep up with cash flow. In 30 years conservative estimates takes us into the 10 figures. It works. It may not get you 10 figures but easily does 7.

This is not going to be a popular post because I am going to talk about debt free investing. That means never using debt or private lending for real estate. First, let me state that I don’t believe Dave Ramsey is the only way and it’s morally wrong to use debt all the time. But I want this to show in a very practical way that not using debt and actually using his plan works and works especially in the long haul.

Secondly, this plan only works if you subscribe to the entire baby steps. If you don’t know what that is than you need to Google it. That means living on a zero based budget (no credit cards...debit cards and cash), paying off debts, not over buying personal residence (15 year fixed rate mortgage that payment is no more than 25% take home pay), having an emergency fund and aggressively getting out of debt including home. It also means not buying a rental property until you have paid off home and all debt. This plan does not work well if you don’t commit to the entire plan.

With all that said please consider this option by looking at our story. We completed “Baby Step 7” around 7 years ago. That means we paid off our mortgage after several years of going up the steps. We then took all the money we were paying in mortgage and debts and began to save for a rental property. We bought our first home around 6 years ago all cash. We paid to renovate it and put a renter in it. All the cash flow from the rent went into buying another property. We took our money saved with the rent and in around a year we bought our second property with cash and renovated and rented it. We did this over and over again. We did work faster than most because our personal business grew and we were able to put more cash in it personally every year but I would rather own 5 rentals paid to for than 50 with debt. Thankfully we didn’t have just one choice. We have been doing this consistently for 6 years and currently have 36 paid for properties generating just at $50,000 in rent per month

@Dave Spooner Sorry for the delay. Don’t check it often. We subscribe to and follow the Dave Ramsey plan. We have been on “Baby Step 7” for around 7-8 years. That means we live on a real zero dollar budget, have zero debt (including no mortgage) and save aggressively. Since we have no debt we were able to save up for our first rental in cash. All these homes were purchased over around 6 years using rent and personal money saved through my business. It takes a lot of time to do cash but the overall rewards are much greater. No interest pod ever and 100% of our cap rate is reinvested. We are projected to be earning more money in rent than we are putting in personally in around 3 years. In 30 years keeping the same rate, we are looking at having hundreds of millions a year in rent with over $3 billion in assets....conservatively. The plan works but it takes patience, discipline and a commitment not to use debt.

Investment Info:

Single-family residence buy & hold investment in Statesville.

Purchase price: $1,633,625
Cash invested: $3,027,416

This is a combination of 32 doors we have purchased in cash and renovated in cash. True Cap rate is currently 14.41%

What made you interested in investing in this type of deal?

1. Great Location- being long term holds having an area that was good was most important
2. Good layout- all SFH have either a true Masterbedroom/bathroom or the ability to create
3. Great CapRate- 1% rule bare minimum. Cap rate after repairs, vacancy, taxes, and insurance avg over 14%

How did you find this deal and how did you negotiate it?

Wholesalers, MLS, Foreclosures

How did you finance this deal?

All Cash

How did you add value to the deal?

Complete Renovation. All homes have average incredible equity even though we didn't buy to flip.

What was the outcome?

Since we hold every house and pay cash we have incredible cash flow to buy more properties

Lessons learned? Challenges?

Just recently learned how to buy from wholesalers. Wish I learned that earlier. Learned with experience to screen tenants better. Find a few paint colors and use on every rental. Do not get cute. Find good contractors

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Have my own license so I purchased myself and had no lenders.

I know. This may be unpopular but we decided that we would rather own 5 rentals in cash than 50 rentals with debt. Sorry if it's not popular but we've been doing this for years and after building our personal home (with cash), we now are able to take all the profit from our rentals and current income and pour it into the business. Since we have all cash the return is unreal and the growth can be astronomical. Every year we will have more and more money to pour into it as we don't take any money home but reinvest it to buy more homes.

I simply wanted to introduce myself and my company (Mak Rentals). I'm new to BP and have been listening to the podcast. I've been doing real estate investing for around 6 years and currently have a portfolio of around 30 rental properties (15 Airbnb's) in the greater Charlotte area (Statesville, Troutman, Mooresville, Mt. Holly). We are unique in that we only pay cash we raise and do not look for outside money or debt of any kind (Dave Ramsey Financial Coach). But have learned a lot and looking forward to connecting with those investing. Interested in continuing to buy SFH's that are distressed but am also looking at multi-family & apartment complexes. Always needing to connect with more contractors. I have 15 homes right now needing complete renovations and don't have enough good crews. Anyways, just wanted to introduce ourselves and look forward to connecting more.