All Forum Posts by: Jeff Ronningen

@Roy Gottesdiener. One way to break down $150K/yr income is to divide average cash flow per door and determine how many doors you need. 150K per yr is 12.5K per mo. At $250 per mo positive cash flow per door you need 50. At $125 per door you need 100.

There’s no easy formula to get there. You need to buy properties which you can successfully operate. Buy at a good price, find value add, minimize expenses, maximize income. Cash on cash return becomes important to stretch that $250K. You may need to do some flips to stair step up.

Don’t go in too big at first. You’ll learn lessons along the way and they can be expensive.

@Svetlana Ivanova. Don’t drop health insurance. A serious illness or accident could wipe you out. Your life insurance seems way high. Look up definition of term vs. while life. Te is basically just life insurance with the coverage and premium locked in for a predetermined term. Whole life is term + coverage and premium doesn’t terminate + investment savings. Separate your life insurance from your savings and investing.

@Nathan Killebrew. Relationships are important. You don’t want to achieve great financial success only to realize you’ve sacrificed important relationships. Your true friends will support you and respect your time. People who don’t respect your time and who try exert negative influence are the ones you can do without.

@Bill Brandt. You nailed it. Many people are attempting explain why, others are relating stories of wonderful pit bulls. But look at the data. The insurance companies don’t call out this breed for no reason. Pit bulls are far and away the most life threatening breed.

@Russell Brazil. Just looked it up, you’re correct

@Jeffrey Trudeau. I'm pretty certain FHA would treat them as separate loans and separate transactions. As such you would have to buy one and your brother the other for both to be financed owner occupied. Ask around and find a mortgage lender who knows what they're doing.

@Rickard Risberg. Find an investor you can do work for and learn from them. Gain knowledge in all aspects evaluating and maintaining property - structural, electric, plumbing, etc. Bank as much money as possible. You won’t be able to get a loan unless you use a co-signer at a bank or borrow from family or friends. You might be able to identify properties for an investor to purchase and get a fee. But I’d start by learning to be a handyman. That knowledge will be valuable as you step up to the big leagues.

@Michael Thurston. Personally I give very little consideration to resale value. Different people in different markets with different business models may factor this heavier. I’ve seen many comments on threads recently that talk about appreciation like it’s a sure thing. I think that’s dangerous. Many people have gone bust in real estate and history has shown that some of the strongest markets fall the hardest. The long timers who rode out the last downturn, which for real estate especially was severe, had enough cash flow and liquidity to ride it out.

@Kyle Shankin. Either your CPA is wrong or I’ve got a problem. I’m doing a 1031. I’ve sold the property and proceeds are being held by a 1031 intermediary. The property to be purchased is under contract. My scenario violates the trade requirement you asked about. I’m working through my attorney, which I highly recommend doing if you attempt a 1031, and I’m confident it’s being handled within the rules.

@Janet Torres. Interview the agent you don’t know. Prepare some open ended questions to get them talking. Do your own research first (I assume you have). See if the 27 years and knowledge of the area provide anything useful for you, they may or may not. Ask about the population trends in the neighborhood and impact on housing going forward. Ask about the tenant population you’ll be drawing from. Ask about the housing stock in the area and common issues to look for. If it’s older you may deal with boilers,casement windows, outdated electric, outdated plumbing, etc. Someone who really knows the market would have useful insights. If the agent can’t come up with anything useful you didn’t already know, you’re decision is easy. Trusted friend.