All Forum Posts by: Jonathan Yeh

Depending on your connections and market.... Good labor is hard to come by and either expensive or you have an existing relationship.

Funding is also more difficult to secure for new construction even more so for investments vs primary.

This is an interesting thread.  I just sold my company and I want to take the earnings and invest in real estate.  I am 30 and have done the stock market for years.  I don't see myself flipping houses and I want to be more passive than that.  I know there are lots of REITs and other syndications.  I also am debating buying my own properties just to rent.  Lots of choices.

@Jonathan Yeh

Depends on what the sum is. Is it a million? If so I’d probably put 200k down on a $1M apartment type spot, cash flow somewhere in the 10k/month ballpark, set up my kids education fund, pay off my primary (because if it’s $1M then what’s 200k) and then probably sit on $300-$400k so when the bottom falls out again, I will be ready to scoop up properties.

If it’s $50k, then I may just pick up a junker, rehab it, refinance it and recycle my cash to another property.

Fun to think about though. But - the faster (in my opinion) you can get to a bigger multi family property, the faster you can build. Go exponentially as they say. Not laterally. Im 3 years in my own journey. Started with a SFR, then another. And another. And another. And another. And then a triplex. The triplex has one tax bill. One roof. One lawn. But throws off 3 rents. My goal going forward is to grow to more doors under one roof. It just seems more efficient.

Good luck!

@Jonathan Yeh

Option 3 is the closest I would do. From my research, the wealthiest investor know how to use leverage well, if you have $100K you could buy a primary home for you & your family but you would be looking to build that capital back up to invest in any rental property. It makes more sense to me to spread that $100k over multiple assets that would pay for your primary residence over time.

E.g. You find a home that cost $100K, you buy it cost. You still have taxes and your monthly expenses that you have to “work for” to pay, and if you so happen to loss that source of income you can still loss that “debt free” home for not paying taxes on it.

If you found a rental that cost $100K you can “invest” it, typically putting 20% down (which is $20k) that would allow your money to come back with friends plus you still have $80k to do it serval times and that would pay for your primary home. Cashflow 101 teaches you that once your “passive income” exceeds you “total expenses “ you don’t have to work for money 💵.

The ultimate goal is to produce passive income with the least amount capital to invest in multiple investments. Formulate your plan on weather to invest in SFR and/or multiple units, some REITS to produce interim cash flow to fund upcoming opportunities. Make your cash flow work for you. Multi-units will provide greater economies of scale. Keep in mind the other goal is to minimize your tax payouts through a legal entity. Pay yourself a meager salary from operating your entity of investments, then take dividend distributions to reduce your taxable income. Your income from your salary will be taxed at a higher rate than the dividends. So get a very good Lawyer and Account working with your goals. Good luck!

@Jonathan Yeh Wow!  You sparked quite a convo.  1. Yes, PM me.  2. If you don't understand something (ie. syndications, etc), ask "how can i...".  Research... Ask questions!... Network :)

Lots of options. Pay down debt? Leverage and make more cash flow? Depends on your goals. I have worked with a lot of investors who have used a large lump sum to create a large cash flow position through multi family investing...then they use this new cash flow to pay down debts and live via passive income which allows you to accomplish both. Plus you are building equity that will increase over time and grow that nest egg vs just simply paying down debt. Happy to go over some scenarios if you want to discuss specifics! Good luck!

@Jonathan Yeh  If you need resources to learn about syndication, there are some great books and pocasts:

podcasts:
Apartment Building Investing with Michael Blank

Old Capital Real Estate

Wheelbarrow Profits with Jake and Gino

Books:

Best Ever Apartment Syndication Book - Joe Fairless

Investing in Duplexes, Triplexes and Quads - Larry Loftis (not syndication, but small MF)

I'm always happy to chat with you too to help point you in the right direction.  Send me a message or email!