All Forum Posts by: Jonathan Yeh

I did come into a fairly large some of money.

First I paid off all of my debt, then I had some invested in the stock market, I used some to finish my degree that I was already going to school for and now I just recently purchased my first fix and flip property. 

Pretty sure the correct answer is VEGAS.   And put in on all on black! Best and most secure way to double your money.  jkjk

@Jonathan Yeh If you have a clean slate so to speak with a large lump sum, I would leverage the heck out of other people's money (and time, network, credit, etc.)

1. I would purchase a primary that I could househack. I like the idea of a 4-plex. If numbers make sense to use an FHA loan, then do so. If not, I would put down what I needed to remove the PMI. (If you use FHA lending, I would also move every 2 years to add another 4-plex to your portfolio). You could also do live-in flipping and trade up every 2 years to harvest the capital gains tax-free as well.

2. In tandem with number 1, I would set aside reserves and accelerate paydown of my consumer debt so I could qualify for the best financing.

3. Depending on how large the sum was, I would take ~$100K and start building a BRRRR or BRRRR-key portfolio to throw off income to eliminate my consumer debt, bolster my reserves and cover my expenses so I could hit financial independence and make work optional.

4.  If I have funds over this (say ~$500K+), I would then invest in conservative syndications (MF, MHP, AL, SS) that preserve capital, kick off a monthly cashflow of 7-9%, aim to double my capital in 5 years, and gives me all of the tax benefits as a pass-through.  

I would then use the income from #3 to invest more in #4, and the capital harvest from #4 to invest more in #4 until I'm financially free and go do something I passionately love!  

PM me if you have Q's!

@Jonathan Yeh

Ok let's explain why you don't pay off a 30 yr mortgage with a fixed rate. I'm not sure about inflation in Canada compared to the US but if you owe 100k on a 30yr fixed at a decent rate and someone is paying that off for you let them! The value of the dollar is rapidly dropping. Think of it on an extreme level where the value of the dollar drops 50% you could easily acquire the amount of dollars to pay the mortgage since the debt has never changed . The average income 30 years ago was 30k now it's 60k. People didn't start making more we just lost the buying power of the dollar. We haven't done anything to slow down inflation, if anything it's speeding up. So why pay off the debt today with your valuable dollars when 20 years you could be sweeping the money off the street and taking it to the bank. I do agree that if you're close to retirement it's not a bad idea to have a few paid off properties instead of a dozen leveraged ones to just cashflow your lifestyle.

I would go with option 2 if it is as househacking. to me it would be worth it even if the other payment doesn't cover the mortgage completely if it is in a area or size that I really need it to be and it makes sense financially

I'd go with option 2 with a few adjustments. First, I'd do a 203K loan and get some equity out of that place. Get a roommate and start house hacking to eliminate a housing payment. Then I'd BRRRR with the rest of the money.

@Jonathan Yeh - I would start out house hacking if you don't already. That will give you the largest return on your money without a question and you don't need a whole lot up front. It will be good "training wheels" as you foray into real estate investing. 

With whatever is left over, I would BRRRR single family homes and like @Joe Villeneuve said use it over and over again to build your net worth and your passive cash flow. 

To be honest I'm not entirely sure. There's piece of mind owning something tangible. Perhaps go through the process of forming an LLC for whatever you decide to get into. Set up a bank account and operate through the company. The connections made along the way can avoid a lot of speed bumps when opportunity strikes. I just received the paper work for my first LLC a few days ago but wished I would've done it much earlier.

Again, take my advice with a grain of salt. I know I'm still naive. The only concrete advice I could give your friend is too seek the LLC. Definitely speeds up the learning curve and builds the team.

How large a sum? What is your address? You  keep it under the mattress, right?

J/K. A lot depends on your goals.

I might take it and retire to Margaritaville. ;>)

@Jonathan Yeh

Just starting out myself but in that situation I would:

Network but keep quite about your resources

Keep my guard up

Educate myself about syndications

Learn how to vet a good deal in said market

Find a killer opportunity in your new circle that’s about to collapse due to funding.

Swoop in with a small percentage of of your resources.

Learn from the boat load of mistakes.

Uses those lessons to knock the next one out of the park.

Perhaps I’m regurgitating dozens of optimistic books but seems like you’re already headed in the right direction.

Oh and not get into the stock market.