All Forum Posts by: Jeff Ronningen

The harsh reality is the market had spoken. Sometimes investors make money, sometimes they learn lessons. Rarely do both happen on the same deal. This might be a cut-your-loss and learn-your-lesson situation situation.

My goals are similar. I started with the end game and worked backwards. How much REI income is needed to make the jump? What’s attainable and what’s the floor for cash flow per month per door? How many doors needed? How many doors can be acquired per year? Which markets (local, in-state, out-of-state) and which type of properties (sfr, 2-4 unit, commercial, mix) will meet the criteria? Answering these questions will help build the road map.

The discussion on the thread about which breeds are prone to violent behavior is largely irrelevant. The most important thing on the thread is the insurance company’s policy. Whether it’s based on actual claim and financial impact data, or a bias against certain breeds, anything that can void a policy opens the policy holder up to losing everything. That should be the primary consideration. If your carrier doesn’t allow it the decision is made.

If a person has debts I’d invest in paying those. Credit cards first then car payment. If no debts I’d look for MFR with FHA loan to house hack. Could possibly borrow $150k or more.

I’ve borrowed against 401k and used HELOC. However I view those as short term vehicles to raise funds for REI. I don’t like having them outstanding for a long time. 401K loan has high payment due to short term so it hurts cash flow. For HELOC you need to understand if the lender has the ability to call the loan. I don’t like that exposure. As far as % LTV, if you have ARMs and you’re getting commercial, non-conforming loans you also need to understand the lender’s ability to call the loan or change terms. Leverage equals risk. Leverage is probably the main reason people go broke in this business. Risk tolerance is a personal matter which varies based on age, net worth, etc. If you’re young, you have time to recover from losing it all. If your net worth is low, why not risk losing it all if it’s not much? If you want to learn from someone else’s mistakes with leverage, read about Dave Ramsey. I believe he has personal experience with this which he readily shares with the public.

Dump that loser.

If you buy a dumpy condo which no one wants to rent you’ll be negative.

It depends. In my market most of the MFR stock is older than that. For older properties you need to consider plumbing, electric, roof, etc. Stay with what you know. Lessons aren’t cheap.

Justin, do more research to determine market rent. Why would you think $1000 is too high when you actually rented it for that much and a real estate professional said $1200. Next time it’s up for rent advertise at $1200 and see what happens. You’ll know within a couple days based on response. I don’t like the room add on idea. Not sure you can borrow much non owner occupied cash out refi. You didn’t say what market value is. Your cash flow isn’t bad, work on maximizing that, save up, then buy the next one.

No, your strategy does not make sense. I suggest you learn to do a more detailed financial analysis and set criteria for minimum returns before you make a bad investment and learn the hard way. As a friend who is a former golf pro and bookie told me, “lessons aren’t cheap”.