All Forum Posts by: Jordan Decuir

@Zachary Jensen

Congrat’s on the first property! There are lots of great perspectives here so far. I fully agree that it is smart of landlords to treat great tenants as if they are worth their weight in gold. But, if this great tenant has been conditioned to accept annual 3-5% rent increases, why would you disrupt that, especially in a period of high inflation?

Also, perhaps consider hiring a good property manager to handle the interactions and everything with the tenant. I assume that and your wife likely would rather not spend your time working for close to minimum wage self managing. Especially if yall each have full-time jobs of your own already. Also, having a property manager may help to create some walls between you and the tenant who are already only separated from you by a wall. I’ve self managed and I’ve employed a property manager...I MUCH prefer employing a property manager. This is obviously heavily influenced by my personal situation however, and everyone is different. .

@Justin G.

Nice. From what sources are you pulling their data to know who to reach out to?

@Justin G.

How are you sourcing these owners to go directly to?

@Dylan Bohannon

Congrats! I’ll be doing the same thing early next year so “we’re in this together” lol

Keep in mind that whatever leases are in place when you buy the property will stay in effect when you buy it... i.e. the leases will automatically transfer with a transfer of ownership. There are likely several reasons to keep this in mind.

In terms of financing questions, in my experience, @Andrew Postell is a very knowledgable, patient, and helpful lender who is also an investor who may be able to help with any questions you have.

@Samuel Medina

Conventional wisdom would probably say that, all else being held equal, the more units you can get, the better as you will likely tap into greater economies of scale....resulting in a lower cost structure...and a higher return on your investment. Plus, management would likely be simpler if all of the units are concentrated in one geographic area. If you wanted to go even bigger, you could probably even consider putting up a portion or all of your $100k, and partnering or syndicating with other investors to access even greater economies of scale.

I think the biggest question to be answered is probably the most important one....what is your goal with the investment?

I'd like to discuss with a knowledgable lender the ins and outs of using an FHA loan on an owner-occupied duplex (possibly tri- or fourplex as well). In a sense, this would be a sort of pre-qualification discussion although I would not be able to pull the trigger until January 2022 at the earliest. Has anyone worked with a lender in this regard that has proven to be very knowledgeable and helpful on this type of loan specifically?

@Wesley Mullen

In most cases, I’d suggest continuing to contribute to a 401k with a company match, which yours does have. Not only are you getting the company match, but there are two other things that I haven’t really seen mentioned here yet. One, each dollar that you contribute to the 401k is sheltered from income tax in the year in which you contribute. This can be a significant tax savings because that savings is at your marginal (top) tax rate. If I had to guess, this is somewhere in the 20’s% range for most people. Also, most 401k plans come with the ability for participants to borrow from their account very easily at very-low interest rates. And the interest that is paid back on this “loan” is paid back into your own account. So, effectively you would be making the “loan” payments (principal and interest) back into your own account. Just my thoughts on this subject.

@Scott Westlake

The BP community has had some great suggestions here so far. I notice that you say that you would love to do a fix and flip. If this is the case, then a private lender or hard money lender could definitely be an option for you as they would be more concerned with how good the deal is that you’re fixing and flipping (if you find a great deal) than they would about your personal financial or employment situation. I think the HMLs get a bad rap, but can be of real value in instances where someone with a little cash and a lot of know-how can use private or hard money lender funds to bridge the financing gap on a great fix and flip. Best of luck to you!

@Irasa Downing

First let me say that I am in no way a tax expert...I generally despise all taxes in any form lol. But, the reserves that you set aside for future CAPEX and/or maintenance/repair expenses cannot be deducted from the property's cash flow. Once those funds are actually expended, then they will be a deduction from the property's cash flow.

@Jonathan Shnoravorian

Yep. It is taxed but the depreciation will, in many cases, cause an SFR to show a loss on paper, per the IRS' rules. In this case, there would be tax on the cash flow. This is likely what those folks are referring to when they say the cash flow isn't taxed.