All Forum Posts by: Keith John

Hi Sandy! I am an investor here in Chesterton. I, too, read Napoleon Hill's 'Think and Grow Rich'. Great call to action for those who are passionate and have a definite purpose. I like the idea of starting a mastermind group, as you suggested and we are only twenty minutes away. My wife and I are both passionate about investing, and would welcome the opportunity to meet with you and discuss. Let me know!

@Pete Perez

Thank you Pete! You know...a funny thing happened just about an hour ago. My wife and I were driving to look at a SFR that would make a great rental. As we were debating the potential rent, location and HOA concerns, my wife said "Well, if the worst case scenario played out, we could always move in to this place and sell ours". It's amazing how far she has come with the "emotional attachment" to our current home! LOL Maybe the House Hack is not completely out of the question, and I wouldn't even have to use the scare tactic you mentioned above! ;) I have to give my wife much credit, as I think she is even more determined to get this business off of the ground than I am...quite the reversal. She is listening to podcasts and audio books about real estate nearly every day now.

Thanks Matt! Best of luck!

@Matt Geerts

Hey Matt. Perhaps I should clarify something...we don't use any of the cash flow to literally put towards our personal mortgage. What enters the business, stays in the business for covering capex, repairs and vacancy, as-well-as capital for future investments. When I refer to cash flow, it is exactly as you defined above..."cash that is left over after all expenses (real and expected) are subtracted from the income". This property, after all expenses (duplex mortgage, utilities, lawn care, snow removal) are paid and percentages set aside for capex (2%), repairs (10%) and vacancy (5%), cash flows nicely. Since this is our first investment, we still perform our own property management. I hope this brings clarity.

@Matt Geerts

Hey Matt! Thanks for bringing me back to this post. I do have several updates, so here goes:

Regarding the house hack...my wife still isn't comfortable with the idea, even though now is probably the best time to sell due to property values continuing to increase, and at an all-time high since we have owned the property. Although I have not entirely abandoned the idea, we have agreed to take a different approach to reaching our REI goals. Compromise is the best solution.

Last October we purchased a duplex we found in July after analyzing the heck out of it. A big shout out to the Bigger Pockets team for creating the calculators! Although there are a significant number of duplex rentals in our town, this one was unique. It is located conveniently close to grocery stores, major interstates and the downtown area; much closer than most. It has attached garages and separate laundry rooms for each side. Given the location, the curb appeal and the amenities, we have had no real difficulty in renting it out. We finished rehab on one unit in November and rented it out immediately. The other unit was finished in early January and rented in February. The property cash flows nicely and although it won't cover our mortgage, it certainly covers a good portion. This makes the house hack dilemma much less of a dilemma!

Our next move appears to be purchasing a quad with a partner. We are still evaluating the partnership and we have many details to work out, but it looks promising.

I vote Chesterton...but I'm bias. Good luck on finding that flip. Let me know if you need anything.

Welcome Michael! I live in Chesterton and we just bought out first duplex for buy and hold income property. My wife has expressed interest in doing a flip as well. Maybe we can get together for lunch and discuss some time. Best of luck on your flip!

@Shane H.

We have equity in our home and I hadn't really considered using that to help offset the down payment. Great idea and thank you! I will run those numbers. I would also like to refinance our current home from a 15 year to a 30 to reduce our monthly payment, and it might be the right time to ask about the HELOC.

@Vincent Crane

Unfortunately, the majority of the real estate investment deals around my area have low rental rates with fairly high prices, so it is unfavorable unless you can land a really good deal. The best property I have found so far would only cash flow about $250. I would need several deals at that rate to completely offset my current mortgage. Using the 2% rule as a guideline, I wouldn't touch anything I have found so far. Typical yield is 1%. Might have to expand the borders!

@Edward B....I like the idea of the 5/1 or 3/1 ARM if unloading the house, but are you obligated to keep the house a certain period of time after refinancing? As for the equity in the house for a HELOC, if I sold it, we should be able to get more cash from the transaction than I could borrow through the HELOC (80% LTV I believe?). Wouldn't it make more sense to just dump the house and take the cash to reinvest? Thank you for all of the advice BTW!