All Forum Posts by: Khaled El Dorry

@Mike Schorah I thought his assessment of the three possible scenarios were pretty helpful

1) default ( highly unlikely)

2) hyperinflation (buy assets/RE)

3) raise taxes (buy RE)

And if the price of things plumit it's an opportunity to buy at discount and increase your returns.

That was the punch line for me.

@David Jarboe David - I own 9 doors exclusively all turnkey (Florida and Ohio). The Florida experience has been good the Ohio experience is average but still not bad. I’m looking to expand another 20 doors via the same route. DM me if you need some names and details.

@Tyler Lloyd did you do an inspection on the property? What kind of condition is it in?

Also how much is insurance?

Take rent and subtract the following

Expected vacancy as % of rent (property management company in area can give you reasonable number)

Repair and maintenance as % of rent (thus need to know condition of major assets in house such as roof, furnace, etc..)

Property management as % of rent if you are using one

Mortgage, interest, tax and insurance

If all that meets your criteria then you should feel good about it.

@Marcella Hoard I don't think there is a right or wrong answer here. I know MF is lower cost per door, can force appreciation and scales infinitely better but I'm extremely risk averse and want the ability to sell any of my SFH if I needed to for any reason. They all cash flow well enough for me as I'm a W2er for the foreseeable future and I need that money 10-15 years down the road. I also don't like these 5-10 balloon rates for MF when interest rates are that low as I don't like doing 3-5 year projects and plan to hold and take care of my properties for a long time. If and when I chose to hang up my W2 then a MF will make a ton more sense than the SFH's I own.

I think the argument of “what’s better” is such a low level thinking argument as what matters most is where you are and what you want to do.

@Cruz Gartner when you say pure cash is that after you withhold some money for vacancies and repairs or before?

@Grant Doyle can you afford to live in it for a while on a FHA loan? You only need to put 3-5% down I think. House hacking is not my thing but I'm sure you can do that

@Daniel Dietz awesome stuff - thank you Dan. Appreciate the insights.

Good day BP - how have most of you gone about legally protecting your assets from lawsuits and liabilities? My research lead me to trusts/LLC combos in Nevada as the "standard" way but before I plunge in I would like to get some feedback.

My situation is 7 doors all financed with standard 30 year fixed loans and I’m less than 3 years into all loans. Plan is to keep them and pay them off or 1031 exchange them up at some point. That part is TBD.

Thank you

@Deryck C. If you are still growing save the cash and reinvest it. The moment you stop accumulating properties and have hit “your number” then I would look at payoffs. So for example if you own 5 properties and want to get to 20 I would put that cash to buying more properties until you hit the 20 then start aggressively paying off your lowest loan and take the cash out of that and do the next one. That’s my plan at least.

There are others who say keep the leverage and go bigger which is not a bad strategy either but it’s not for me. I want to pay them off and live off the cash flow and get rid of the debt. So just like everything in RE what do you want to do?

@Dona D. Another option is offer a multi year lease so the expectations are set. I personally refinanced this year and was able to drop each mortgage around $150/door and chose to keep rent flat because of COVID and kept 2/3 tenants from going elsewhere. Sometimes it’s ok not to raise rent unless you have a reason to (tax or insurance hike, PM fees going up, etc..). But as multiple people said you don’t have to explain it either when you decide to raise rent.