All Forum Posts by: Ken Naim

@Jeremy Bailey Sounds like you are ready to scale up. As others have said a cash out refinance will provide you with a down payment for let's say an 8-10 unit building while still cashflowing. A straight sale might allow you to purchase 12-16 units. More of unknown but it'll depend on your goals. Do you want to own more investment real estate? Do you pefer small multifamily or want to scale to large multifamily/commercial? Do want to remain an active real estate investor or possibly go passive with syndications?

Right now you are making money and your propery can be paid off in less than 5 years and I'm sure you worked hard to get to this point and you probably got a good/great ROI but your ROE, return on equity, is not that high at the moment. I recommend that you make your money(equity) work harder.

I had eight paid off single family houses with decent cash flow and was happy until i realized my ROE was 4%. I sold all of them and bought a commercial property.

@Jeffrey R. White if your going to be a full time flipper then your time is better spent flipping. If your a full time contractor and going to build that business and your flipping is just a side business/investment then doing your own is good way to save money. It sounds like the second option is for you at this time, by building your portfolio with sweat equity.

@Senia E Cuevas I'm looking forward to hearing good news from you in the future from this or another property.

@Cristopher Agosto thank you I'm looking for materials at the moment, kitchen cabinets and countertops, backsplash, wall tile for bathroom, lighting fixtures, and closet organization. I have a GC for the major work.

@Senia E Cuevas Remember a good decision today is better than a great decision tomorrow. Once you have 80% of the information its time to make the decision. You can never be 100% sure as the unexpected will happen. Even if this investment doesn't give you the best results, you'll have taken action, got an education, earned experience, build equity, tax deductions, potential appreciation which all have value. The optimal return may have to wait till your second purchase

@Mehul Patel Hi Mehul, sounds like a great deal with a lot of work on your part to create equity and value. Good luck and keep ip the good work

@Jackson Hartman Congratulations and good luck. Let us know how the short term rentals work out for you.

@Jacob Stokes I've walked into showings where I'm putting together a mental list of a dozen major items that'll need work and when walking out I'll overhear another couple saying it is in move in condition.

Not every seller or buyer sees the true condition. Some sellers may need more than 168 days to come to this realization or never.

Some may not be truly interested to sell while others will wait for that naive buyer with a conventional loan.

If this were aninvestment property then I'd just move on to the next one. Since it is for family and if they truly love it and they don't like anything else then it is an emotional purchase and could be worth paying a bit more.

I bought a house for my parents and paid 30k more for it than I would have as an investor for this reason. Thier happiness was worth it.

@Jacob Stokes Hi Jacob, in a sellers market like in my area at the moment, cash doesn't mean much as there are many qualified buyers, closings ate happing quickly and few buyers are having their loans rejected due to lax standards returning. Also certain neighborhoods cash is more regular or almost standard like 55+ neighborhoods in my area.

Sometimes cash has worked against me as the seller thinks if you have that much cash you can pay more.

If this was a buyers market it would be very different.

@Wayne Bolen Hi Wayne, i did this when i first started real estate investing and needed to build my working capital and it helped. Real estate can provide much better returns than your 401k if done well and many corporate 401ks are laden with poor fund choices and expense ratios. Once your real estate is cash flowing well you set up various retirement vehicles to catch up retirement savings if needed.