All Forum Posts by: Jason Krawitz

Agreed. Rent is too low to make a good investment for renting . Actually I’d find another job and keep trying to funnel extra money into side projects in real estate . Your not ready to be sipping pina coladas on a remote beach yet lol don’t get in over your head

Don't count on surviving long without a w2. I would suggest you do nothing until you find another job. You will need it to qualify for financing and 275K is not enough to generate the income fast enough to survive. You will not make it in investing without leverage.

Once you are reemployed sell the rental, rent is too low to qualify as a investment.....negative cash flow is a bad way to start.

I would sell the $275K house that rents for a measly 1595 and buy 5 $50K houses that rent for $800/month

With $4000/month rental income you are on the way.

 First suggestion, is to take the cash you have...and take one full "conservative" year's worth of expenses out.  Set it aside to be used exclusively for those "bills".

Take the rest, and invest it in flips.

Reinvest the profit from those flips into more flips.

Once your "seed" money is large enough, continue to flip it...but spend ONLY the profit from those flips on cash flow properties.

Repeat....

I would do 2 things , first find out the licensing to become a contractor . Second I would look to do a flip . 

Becoming a general contractor , you line up subs and do work for homeowners and maybe flippers . ( you are using their money , getting deposits , lots of other discussions about that )  At the same time you now have subs and when a deal comes by you are already connected for your flip .

Hey Jason,

I was lucky enough to be laid off from my job in 2010. Turned out to be the best thing that ever happened to me. At this point I make nearly monthly what I made yearly then. I too had been doing some buy and hold investing while I worked there starting in 2006.. and I felt a layoff coming on long before it actually happened and started saving all my pennies. It took about a year or year and a half longer for me to get laid off than I anticipated. I survived two or three rounds of layoffs before the one that got me. That gave me some additional time to save cash. Now it was time to figure out what to do with myself.

After a lot of studying and a number of dry runs I picked up a property at trustees sale, and had a friend committed to buying it almost immediately, before I had even finished evicting the current occupants. As soon as they were out, we closed and I made something like $20k (and I had actually given my buddy a great deal). Not life changing but enough to let me know that there was something there. It was proof of concept. I did a bunch more deals over the next couple of years, moving up to two or three at a time, but at that point I was doing most of the work myself.. which assured the profitability of each deal but put a pretty low cap on the number of deals I could handle at a time. It was clear it was time to start stepping away from the hammer and nails part of the business. 

Hiring out all the labor greatly increased the number of deals I could handle, and I pushed it up to 6-7 at a time. Comparing the 7-8% net return I was getting on rental properties VS the 25%+ annualized returns I was seeing from the flips convinced me it was finally time to bring the money home and roll it into the business. I had been reluctant to put all my eggs in one basket, but the returns were just so much higher doing the flips that I just couldn't watch my capital languish like that anymore. I also finally had real confidence that I knew what I was doing. Divesting myself of all my rentals gave me the capacity to do about 11-12 deals at a time, and I started feeling like I was really making money.

I don't know if this will last forever (it certainly isn't getting any easier), but I'm in a much better financial position to weather whatever comes now than I would have been had I just grabbed another menial job and relied on the small amount of passive income that my rentals were providing. If I do want to go back to rentals, I have a heck of a lot more cash to buy them now (and I probably will again at some point when I don't want to be quite so active and / or want to diversify).