All Forum Posts by: Kenneth Kussman

Is the house an investment property or your primary residence

@Kenneth Kussman congrats on getting yourself into such a good position. As was mentioned by @Richard Sherman your income is going to be a huge part of getting started, and you should do whatever you can to build up those savings. It is much MUCH easier to go from 5 units to 10 than to get from 1 to 2. Whatever you can do to get your next step to be more a leap is great, even if it takes time. Don't feel like you need to be pulling the trigger on a deal every other day, be patient. 

As Richard said, the other main thing you should be focusing on NOW is your strategy. You don't have to do the same type of REI forever, and there will come a time when having a diversified REI portfolio will be a very good idea, but don't muddy the waters by trying to plan for 15 years from now. Have a serious convo with yourself (and your spouse/partner if applicable) about what it is you want out of your investments. You already have the clear goal of $1m in equity by the end of 2019, so you need to work backward from there to determine next steps.

@Kenneth Kussman Your biggest asset is your income and the brain that you have which allowed you to make it.  I have more than one...but they are in order of importance.

1. Cut your lifestyle.  You should be aiming for 60% or higher savings rate to free up cash to plow into investments to get the train running.

2. Decide the path you want to take.  Is it SFHs or is it Multifamily etc.  I am a buy and hold guy, so this is biased, but your income will make you VERY bankable if you are able to save capital for down payments and that will allow you to scale using the cheapest source of leverage which are bank loans.

3. The method is less important than time in the market and you working to improve the property (like what you did to get the equity in the home you have. SFH, multi, storage it does not matter, what matters is getting a coherent system and understanding how value is created.

NOI= NOI = Total Income – (Vacancy Losses + Total Operating Expenses)

NOI/Value(price)= Cap Rate

Which also means that CHANGE in NOI / Cap Rate gets us INCREASE in value. That is your power.

You make money (capital appreciation which can be taken as INCREASED cash flow OR by taking capital out (refinance, 1031 etc) through increases NOI by either increasing revenue or decreasing expenses (ideally both.) That is the active business side of Buy and Hold. TIME will also increase your revenue as well as rents increase (assuming competent management and a normal area where rents are increasing.)

@Kenneth Kussman I suggest getting clear on exactly what area of RE you want to invest in. From there you can find events, coaches, webinars, local events, etc to join or be apart of.