All Forum Posts by: Jordan Sutherland

Hey guys, I would love to hear some opinions on my personal finances. I'm a 23 year old fireman in Texas. I make a decent salary and my wife is able to stay home with our two kids. We are able to live confortably because we have no debt ( besides our home and our two rental properties), but we still have to stick to a budget to make ends meet. We just got into real estate investing last year and I would like to keep the ball rolling.  We have about $40k in the bank and in moderately aggressive mutual funds not in retirement accounts. We are expecting our third child in June and my wife says she needs a new car to accommodate our whole family. She currently drives a 2008 impala that could hold our whole family, but would be very inconvenient with 2 babies and a 6 year old in the small back seat. My car is even smaller than hers. My wife wants a used SUV in the $15,000-$20,000 price range.I told her that she should keep her current car, because it will help with our long term financial goals, but she is adamant in getting something newer and bigger. I feel like we are doing very well for our age, but I feel like if we spend too much money on cars and other liabilities it will severely compromise our financial future. The money we would spend on a car could be used as a down payment on  another rental property in my local market.  Even a small car payment of $300/month will not fit in our budget at all, as  our income is nothing to brag about. What do you guys think we should do? Make my wife happy and get the car or try to remain frugal in our personal finances and continue growing our investment portfolio? Thanks for any input!!

@Austin Hughes One was last October and one was in February.

I'm in Lubbock and I'm pretty new to REI, but the two times that I have had vacancies, I have only used Craigslist. I literally got so many responses last time that I had to delete the ad after only 24 hours. People would just not stop calling me, many of which were college students. I got my places rented within the week and got to pick and choose carefully who I put in my properties. And I might add that the tenants that I did select are exceptional tenants.

You aren't the first out of town investor to ask about this property on BP. I've looked at the property and was slightly afraid to be there. The area it's in is declining, and in my opinion, will never be a desirable place to live, even for lower income people. It's definately a D property. The numbers look unreal and maybe if you put some money into it for renovations, etc. It wouldn't be all that bad. The problem is that almost every building on the street and nearby blocks are all run down. It is not a place I would feel comfortable going to at night, even with a gun. Units that are occupied in the area are most likely occupied by very undesirable tenants. I think it's a very risky purchase, but it could make someone some good money.  Who knows? But I will tell you, there's a reason why that fourplex has been on the market for so long.

        My wife and I are a little torn on our next steps in our financial future and I would like to hear some opinions from some fellow investors here on BP.  Feel free to share your thoughts!          

        So two years ago, my wife and I were 21 an we made a leap and purchased our first and current home. Our home is a  1650 square foot 3/2/2 house in a good neighborhood in Lubbock, TX. When we bought it, it was exactly what we were looking for. It fit perfect in our budget and provided plenty of space for us and our 3 year old son at the time. We were proud first time homeowners and couldn't have been happier.                                                                          

     Fast forward two years to now, and things have changed quite a bit. We our 23 years old and our income remains relatively the same. I work for the fire department and my wife cuts hair part time. We make enough to live comfortably, but sometimes it can get a little tight. We purchased our first two rental properties with money I have been saving since working in high school. I have always been very frugal, even when it seemed there was no need to be. Our rentals are doing great and we are saving all the cash flow, and I am eager to grow my buy and hold real estate portfolio. But like I said, things have changed a little bit. Now, my son is 5, and I have a 7 month old daughter!  Oh, and on top of that, we are expecting our third child next year (Which is still a secret to our friends and family)! Now our beautiful 1650 square foot 3 bedroom home is beginning to seem a lot smaller than it did when we purchased it. Of course, we are very blessed to be in our current situation, and very grateful. We do however, have some big decisions to make in the future. I don't normally talk to people about my personal finances, but since I don't personally know any of you it makes me feel more comfortable for some reason.  My wife and I have $40,000 in equity in our home and a total of $30,000 in liquid assets (cash and mutual funds).

So here is what my wife and I want to financially accomplish in 2017:

1. Purchase a larger home that we will feel more comfortable raising our family in. We think our price range would be about $170,000-$200,000.

2. Acquire our third rental property. Possible price range could be anywhere from $75,000-$120,000 hypothetically speaking.

3. Still live within our means and have a good emergency fund in place.

I would love to hear everyone's thoughts on the matter. Should we sell our house and upgrade to a bigger house? Should we keep our home and grind it out for a few years and save as much as we can, while building our rental portfolio? Should we keep our current home as a rental and use our savings for a down payment on a new home for us? (By the way, would we be able to find financing to do so?) Or maybe we should do something totally different? I don't know, you tell me! My wife and I just don't know what we should do. Thanks for taking the time to read this and all input is greatly appreciated!

Not at all James. I found out that a family friend does a little bit of private lending and got both properties financed with him. My wife and I have a decent income, i'm a firefighter and she is a cosmetologist and we had been saving money for a while and had been keeping it in mutual funds. After learning about REI we decided to take a good portion of that and invest it in real estate. With the private lender, we only had to put 10% of the purchase price down on each property, but were actually still given a very good interest rate. We are pretty leveraged, but each purchase had some built in equity and has potential for decent appreciation and will cash flow well. Also the loans allow us to pay them off early, make minimum payment for 30 years, or refinance if we choose. This leaves us some options in the future. We could've went through a bank, but obviously we would've had to put more money down. This way, our interest rate is a tad bit higher, but the properties will still cash flow well and we had enough money left over to have a good sized emergency fund in place, in case of any big unexpected expenses. At my age, I have no problem been well leveraged, as long as I have money in the bank and cahflowing properties.

Thanks for the replies guys! Dakoda, I would first recommend "The Ultimate Beginner's Guide to Real Estate Investing" by BP's Josh Dorkin, which is free on BP or Amazon.  Secondly I would recommend "The Book on Rental Propert Investing" by Brandon Turner. Thirdly, for buy and hold investors, I would recommend "The Book on Managing Rental Properties" by Brandon Turner. You can get the two Brandon Turner books at a good price directly from BP or Amazon. They are worth their weight in gold. There are also several other books out there that are very helpful, but I personnally found these to be the most beneficial to myself. Also, I enjoy listening to or watching all of the BP podcasts every week. There is a wealth of information given out for free each week from Josh, Brandon, and their weekly guests, and they always seem to keep it very entertaining as well.

Hey guys, I'm a new investor in Lubbock, TX!   I'm 23 years old and I started learning about real estate investing about four months ago and I decided to focus on buy and hold investing based on my skill set. I puchased my own home about a year and a half ago and purchased a duplex in July that is currenty rented out. The duplex has been treating me well with good cashflow. Today, I closed on my second property, a single family residence. I got the property for $95,000 and had the seller pay for all wanted repairs before closing. I've been advertising the property online for the past week and already had a few families put in rental applications for $1100 monthly rent. After closing on my first property and reading Brandon Turner's books, I gained confidence in real estate investing! I will hopefully have my third rental unit rented out by next week. I just wanted to let all the other newbies know that with all the great info available on BP, I have been able to start my real estate investing career successfully (so far) and I can't wait to aquire my next rental. It IS possible for beginners to start building wealth with real estate. For all you other newbies out there, you can do it! And once you get over the first hump and get your first property everything will get easier and fall into place. I can't thank the BP community enough for all of the shared wisdom! Good luck out there and God bless!

Hi Grace!  I'm a new investor, but I have lived in Lubbock my whole life. That specific neighborhood is definately one of the least desirable in the city, although there may be some decent rental properties in the area. Some streets in that neighborhood are okay, and some parts of the area are like a war zone. I looked into purchasing a fourplex and a duplex in the area, and when I actually saw it in person, I was almost scared to even be there. I'm sure these properties will cashflow, but will provide some serious headache to the owner, even if the property is not self managed. Also, this area is one that I would say has a far less than average chance of appreciating compared to the reat of Lubbock. With all that said, there may be some deals to be had in area, but it might be a little risky. Feel welcome to PM me if you want to discuss it in further detail.