All Forum Posts by: Julie A.

Quote from @Evan Polaski:

 As of today, I have spent every dollar I have GROSSED from this property in the recent renovation.  Admittedly, I am getting $1800/mo rent and almost everything except foundation, brick and windows are brand new, but my average cash on cash is negative.

 Thank you for providing such fantastic detail. What made you decide to do the $100K renovation rather than sell?

Quote from @Joe Villeneuve:

Quote from @Jordan Moorhead:

@Julie A. I think that's a little high but not crazy

Correct.  I measure my deals based on numbers with $$$$ in front.  For me, it comes down to 2 things:

1 - How long it will take to recover my cost.  Not the property cost, but MY cost.  This can only be achieved from cash flow.

2 - How long it will take, using a 5% appreciation per year, for the appreciated equity to equal the original equity I paid for...which was the DP.

Once both of these events occur, it doesn't matter in what order, is when I sell the property...before I start losing money.  This is the maximum my money will be worth in that particular property.

 Thanks for clarifying what you're looking for in a deal. This helps a lot! So for #2, you want to double your down payment in equity, and you want to determine how long that will take @ 5% appreciation. Do I have that right?

Quote from @JD Martin:

Quote from @Julie A.:

@JD Martin I imagine you can do additional refis to get more cash out since you have so much equity. Is there something stopping you from doing that now?

 Yes. My local market has gotten so high that there is virtually nothing worth buying that will provide me the returns that I would be looking for in exchange for the effort of adding additional houses to my portfolio at this time. I have no interest in changing markets or managing at a distance, so opportunities at this time are extremely limited. If that changes in the future - and I imagine it may at some point - then I will most likely harvest some of that equity to add more homes to the mix. I have a pretty specific vision of what my portfolio will and should look like, and I'm happy with my choices thus far. I am perfectly aware that I could be expanding my wealth significantly by harvesting and buying more properties, but all of that is a trade off in time and effort that I'm not willing to make at this time. 

I think it's great that you have a set of criteria that you stick to rather than go with the whims of the market. I do plan investing OOS, because I don't have another option. So a big factor in success will be which market I choose.

@Rodney Sums what tool(s) do you use to do portfolio-level planning & analysis? Same question for @Tony Kim

Great responses, @Larry Turowski. And yes @Greg Franck, Cap Rate is a better metric for what I'm talking about. However, it is only useful for my purposes until I get financing. For forced appreciation, I did mean 20% appreciation above cost (price + rehab). I won't be investing in California, you can bet on that! The strategy I'm going after is principally based on cash flow through long term rentals and doesn't require 5% per year appreciation. However, I would eventually like enough equity (say, 20 years from now), that I could eventually liquidate and move toward more passive investments such as private lending.

@JD Martin I imagine you can do additional refis to get more cash out since you have so much equity. Is there something stopping you from doing that now?

Makes sense, @JD Martin. When you say 30% leveraged, does that mean you have 70% equity, or the other way around. If it's the former, that seems to be a very conservative position. :) Another thought I had was to do all cash deals in order to move more quickly (thus more likely to be accepted), and then later do a cash out refi once it's rented.

@JD Martin Thank you for all those details. The reason why I'm looking at CoC is that I want to know what the picture would look like if I did all cash deals (as one extreme). The question is -- how much of the rental income could I funnel into new deals, on top of $ that comes in from my W-2. If I could achieve 9%, it would enable me to reach my long term goals. That said, I also want to run some scenarios where I'm 80% leveraged to compare. Do you have any advice on how to compare an all-cash vs. leveraged portfolio in terms of growth & income?

Thank you @Nick Cooley! Very helpful. I'm pleasantly surprised that BRRRR works in Denver. You must be a very good deal finder. :)

I'm working on a 10 year portfolio plan for buy & hold rentals (SFR or Multifamily). I can reach my goals if I can hit 9% CoC return (on average). My secondary goal is 20% forced appreciation and 5% market appreciation. Experienced folks: have you been able to achieve these numbers consistently? If so, where? How did you finance it and what types of properties?